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Corruption: Is Compliance a Priority?

July 29, 2013
Categories: Anti-corruption

The recent bribery investigation of GlaxoSmithKline’s Chinese operations is likely to give companies a heightened sense of urgency about their compliance efforts.

For the first time, China is cracking down on corruption in the pharmaceutical industry and demonstrating that it is serious about anti-corruption enforcement. The case is attracting global attention as this action is the first bribery investigation China has launched against a foreign company. As part of the investigation, China’s investigative body detained two foreign nationals and is visiting the offices of other non-Chinese multinational companies in China, as part of what some are calling an industry sweep.

The Importance of Extending Practices to Third Parties

Although GSK implemented procedures in many of its business units, its unit in China had not implemented such procedures. Conducting not only due diligence, but also, assessments, training, and ongoing collaboration to improve practices with your suppliers and business partners is important for mitigating compliance risks across global operations.

The GSK investigation is a reminder that anti-corruption enforcement is a global concern that extends beyond FCPA compliance. Today countries as diverse as Vietnam, Ukraine, India, China, Russia, the U.S. and Brazil are all agreeing to and signing on to The United Nations Convention against Corruption (UNCAC), which has been ratified by 166 parties. Brazil recently passed legislation in line with these global compliance guidelines which, for the first time, makes companies liable for corrupt activities taking place locally or abroad.

It doesn’t stop there. The G20 has strong anti-corruption initiatives and the Organization for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions establishes legally binding standards to criminalize corporate bribery of foreign public officials. The 39 signatory countries are responsible for two-thirds of world exports and three-quarters of foreign investment.

The bottom line: there is little tolerance for corruption across the world and companies need to be diligent about implementing strong compliance programs internally and with external third parties.

CREATe Anti-Corruption Resources on our website:

  • Anti-Corruption Guidelines: links and insight into top international anti-corruption guidelines. Available in English, Chinese and Brazilian Portuguese.

 

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