International Business: Revisit the Risks

If your company operates abroad, it needs to be aware of laws that are likely tougher than those in Canada when it comes to the liability of fraud.

Corruptions and bribery are among the laser focused topics covered by very tough legislation in, for example, Britain and Spain. Here are some measures your company should consider putting into place to tackle those two specific crimes and avoid stiff penalties. In the contemporary marketplace, it is no longer enough to claim that payments were necessary because that’s the way they do business there. Monitor all activity. Be certain your business can demonstrate to a court’s satisfaction that it had the necessary procedures in place to block criminal activity. Be able to show that your business monitors the activities of employees, enforces its code of conduct and anti-corruption policies, and tracks, reports and stops corruption in its tracks.

On top of that, a company must have:

• The mechanisms necessary to track all payments made in the course of business.
• A sustained track record of handling any discrepancies or explicit violations efficiently and effectively.

Understand the risks. Consult with your attorney and accountant to conduct a risk assessment focusing on the:

• Effectiveness of your company’s anti-bribery training and education programs.
• Risks inherent in each country and region where your organization does business. Find out about the best practices used by businesses with similar operations.
• Size, frequency, nature and risks of your company’s transactions.
• Extent to which the business hires third parties to sell or deliver its products or services.
• Ability of the organization to monitor, investigate and report potential violations of the Spanish law, the Bribery Act and the Corruption of Foreign Public Officials Ac

Invest in education. All employees, as well as suppliers and contractors, should be expected to read and commit to your business’s code of conduct. The code should be clear about the company’s stand against corruption. Education and training materials should contain sufficient information on the legal and corporate consequences of bribery and other forms of corruption.

Consider adding another step to the process when vetting and approving vendors and other third parties. They should be aware of the scope and potential liability under the British and Spanish law. The best way to be sure vendors and third parties have read and understand the company’s code is to test them. The testing process should be designed to show that they understand the elements of bribery, know how to report suspicious activity and are clear what breaking the law can mean to them as individuals, to their companies and to your business.

Managers should take advantage of every opportunity to set the tone. For example, when training sales people, revisit corruption laws and explain how they affect their duties. Real-world examples and role-playing can be extremely effective

Consult with your attorneys about international fraud laws and have your legal counsel review your company’s practices and governance procedures.