FCPA Illustrative Red Flags List

AuthorDavid A. Steiger
Pages471-472
Appendix H
FCPA Illustrative Red Flags List
471
•
A government ofcial recommends that the company hire a specic
person or company to act as a contractor, supplier, or partner. The
ofcial may be seeking to enrich himself or herself through kickbacks
received from a favored third party.
• A third party requests, without reasonable explanation, fees, commis-
sions, or discounts that are much greater than what is typical. A request
for unusually high compensation may indicate that part of the fee will
be used for improper payments.
•
A third party proposes to be paid a large contingency fee if, for example,
a government contract is awarded or a favorable regulatory change is
achieved. This type of compensation structure can create an incentive
for the third party to make an improper payment in order to achieve
a favorable result.
• A third party requests that payments be made to another party, or to
a third country or offshore bank account, or other unusual nancial
arrangements.
• There are unusual payment patterns or nancial arrangements.
• A third party requests to be paid in cash for services that are typically
paid by bank transfer or other noncash means.
• A third party (including a JV partner) refuses to certify that it will not
take any action in furtherance of an improper payment. All third par-
ties that do business with the company should be prepared to give this
standard commercial assurance.
• A third party has a reputation for paying bribes.
Steiger_TransBorders_20140625_09-05_FinalPass.indd 471 6/26/14 9:21 AM

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