Dan Shallman is quoted in Corporate Counsel regarding the uptick in anti-corruption enforcement. Mr. Shallman says, “We’ve seen an uptick in major infrastructure projects and those are generally in the developing world, which has the highest corruption risks. There’s risk around every corner in one of these projects.”
The savviest companies have developed internal compliance programs and robust internal compliance structures as part of a systematic approach to dealing with and minimizing their third-party risks, which are “coming from every direction.” He adds, “What the best companies do is they’ll have an intake procedure … for approval of contracts that are then scored based on different risk factors and put into different buckets based on those scores. More and more are using data analytics to identify potentially problematic vendors and invoices and payments. That’s something we’re going to continue to see more of.”
If a company ends up on the DOJ’s corruption radar, prosecutors are going to want to know about the compliance efforts and procedures that were in place to prevent wrongdoing and address issues after they arose. And they’re going to “put a premium on early detection and early reporting,” according to Shallman. “The questions prosecutors are asking is that we understand that things can happen, but what did you do to prevent them from happening? How good was your compliance program?” he said. “The second part of it is what did you do when you found out? Those are the two sides of the coin that law enforcement is going to look at in deciding how to treat a company.”
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