31 Days to a More Effective Compliance Program -The business rationale

Thomas Fox
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The 2020 Update stated, “Prosecutors should also assess whether the company knows the business rationale for needing the third party in the transaction, and the risks posed by third-party partners, including the third-party partners’ reputations and relationships, if any, with foreign officials.” This standard articulates one of the most basic tools to operationalize your compliance program and should form the basis of your third-party risk management process. Indeed this is viewed as an internal control with the 2020 Update going on See more +
The 2020 Update stated, “Prosecutors should also assess whether the company knows the business rationale for needing the third party in the transaction, and the risks posed by third-party partners, including the third-party partners’ reputations and relationships, if any, with foreign officials.” This standard articulates one of the most basic tools to operationalize your compliance program and should form the basis of your third-party risk management process. Indeed this is viewed as an internal control with the 2020 Update going on to pose the following question, “How does the company ensure there is an appropriate business rationale for the use of third parties?”

Three key takeaways:

You should always have a business reason for using a third-party which is articulated by the business folks, not compliance.

A Relationship Manager is the key going forward in operationalizing your compliance program through the life of the third-party relationship with your company.

Always remember to “Document, Document, and Document”. 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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