Third-Party Risk Management:
Anti-bribery and corruption (ABAC) is a global movement to disrupt bribery and corruption, particularly within procurement practices and supply chains. Legislation such as the Foreign Corrupt Practices Act (FCPA), the UK Bribery Act and Spain II are designed to provide protection against these financial crimes and companies can be held accountable for the actions of their third parties.
Companies can be held responsible for illegal actions of their third-parties whether they are aware of them, or not. Due to this, ABAC Compliance programs need to extend beyond the enterprise and also include appropriate due diligence and controls for the third-parties that the organization does business with. This includes agents, brokers and consultants and other third-party intermediaries.
About 90% of all US FCPA cases between 1977 and 2019 involved third-party intermediaries. Yet, only 13% of companies manage ABAC risks within their Third-Party Risk Management (TPRM) program. This gap can result in huge monetary losses to a company; in 2020, over $5.8 billion in global monetary sanctions were imposed by regulators on entity groups in FCPA-related investigations.
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