Legal bosses at UK-based multinationals are failing to conduct basic bribery and corruption checks on third-party contractors, a City law firm has claimed. According to a report by international firm Hogan Lovells, initial checks, due diligence and face-to-face interviews before appointing contractors are rare.
The report, ‘Steering the course: navigating third party bribery and corruption risk’, says using third parties poses one of the biggest risks of being held liable for bribery and corruption. However adequate checks on contractors are not being carried out.
The results follow interviews with 604 chief compliance officers and heads of legal at pharmaceutical, transport, and technology companies based in the UK, US, Asia, France and Germany.
Of those jurisdictions, the UK was the weakest region with 50% of respondents failing to regularly risk assess third parties.
Crispin Rapinet, global head of investigations, white collar and fraud at the firm, said third parties can be useful commercially but could also pose a risk when they act in a company’s name.
‘If you don’t have the right checks in place your company can be held liable if your third party bribes for your benefit,’ he said.
He added: ‘Regulators and enforcement agencies are sharpening their focus and corporates are increasingly facing enforcement actions such as criminal exposure for individuals and the company, and reputational damage.’