31 Days to a More Effective Compliance Program - Introduction to 3rd Party Risk Management

Thomas Fox
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Over the month of July, I will consider the risk management of third-parties in an operationalized compliance program. As every compliance practitioner is aware, third-parties still present the highest risk under the FCPA. You must assess whether the company has a business rationale for needing the third party in the transaction, and the risks posed by third-parties, including their reputations and relationships, if any, with foreign government officials. You should ensure that contract terms with third parties specifically describe See more +
Over the month of July, I will consider the risk management of third-parties in an operationalized compliance program. As every compliance practitioner is aware, third-parties still present the highest risk under the FCPA. You must assess whether the company has a business rationale for needing the third party in the transaction, and the risks posed by third-parties, including their reputations and relationships, if any, with foreign government officials. You should ensure that contract terms with third parties specifically describe the services to be performed, the third party is actually performing the work, and that its compensation is commensurate with the work being provided in that industry and geographical region. Finally you must engage in ongoing monitoring of the third-party relationships, through updated due diligence, training, audits, and/or annual compliance certifications by the third party.

Three key takeaways:

1. Use the full five-step process for third-party management.

2. Make sure you have Business Development involvement and buy-in.

3. Operationalize all steps going forward by including business unit representatives. See less -

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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