With the increasing frequency and expanding scope of enforcement globally, companies should devote adequate attention to anti-corruption due-diligence of third parties they engage or acquire. The value of due diligence is multifaceted. It provides early warning signs or “red flags” that a particular third party may create unmanageable risk. It also satisfies an element of an effective anti-corruption compliance program from the perspective of government enforcement agencies. Additionally, effective due diligence may mitigate potential penalties. If a company faces allegations of misconduct for the acts of third parties it has engaged, its demonstration of adequate due diligence and supporting documentation may significantly offset potential penalties.
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