The recently released Foreign Corrupt Practices Act (FCPA) Guidance makes clear that one of the ten hallmarks of an effective compliance program is around mergers and acquisitions (M&A), in both the pre and post-acquisition context. A company that does not perform adequate FCPA due diligence prior to a merger or acquisition may face both legal and business risks. Perhaps, most commonly, inadequate due diligence can allow a course of bribery to continue – with all the attendant harms to a business’s profitability and reputation, as well as potential civil and criminal liability. In contrast, companies that conduct effective FCPA due diligence on their acquisition targets are able to evaluate more accurately each target’s value and negotiate for the costs of the bribery to be borne by the target. But equally important is that if a company engages in the suggested actions, they will go a long way towards insulating, or at least lessening, the risk of FCPA liability going forward.

Contributors: Hiperos
Categories: Whitepaper
SRC Type: Change Management, Sourcing, Strategy, Talent Management