You need to know with whom you’re doing business.

At Nardello & Co., we tailor bespoke strategies to ensure that our clients avoid potential landmines, thus preventing damaging engagements.

Third-party agents and intermediaries can often be a double-edged sword. While they provide the local expertise and know-how that enable a company to reduce its overall investment in a particular market, thereby maximizing its opportunities, third-party intermediaries can also increase a company’s exposure to the FCPA and other anti-corruption legislation, particularly in jurisdictions where graft or state ownership are prevalent.

Knowledge is power.

Ensuring that intermediaries comply with local and international laws as well as your company’s own code of conduct can be challenging.

We have significant experience in helping clients assess and monitor their exposure to third parties—whether they be sales agents, distributors, legal advisors, customs brokers, or consultants—and then in designing and implementing tailored due diligence programs to mitigate risks.

Issues that typically need to be considered when formulating a third-party’s due diligence program are:

• The type of business involved: Certain businesses, such as those in the defense industry, have greater interaction with government and regulatory authorities, which might lead to an increased risk exposure to bribery or other improper behavior.
• The jurisdiction involved: The jurisdiction where you are doing business is a perceived risk factor. For example, some countries, almost always in emerging markets, are associated with a higher risk of corruption, political instability, and reputational issues.
• The availability of public records: The quality or lack of publicly available information about companies and individuals can create uncertainty regarding with whom you are really doing business. In such cases, background information may need to be gathered through trusted human intelligence sources to pierce the corporate veil.

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