Analysis of corruption risks. Conducting anti-corruption audit

Today, anti-corruption audit is an obligatory component of the general due diligence procedure for many Ukrainian companies. This is due to both the counteragents’ requirements and the desire of the company itself to find and eliminate corruption risks inside the business. 

Some companies practice conducting internal anti-corruption checks on a regular basis in order to eliminate possible risks or violations within the company and bring the activities in line with the requirements of potential counteragents.

VigoLex offers to find out in which cases a company may need to conduct an anti-corruption audit and how to do it. 

Voluntary anti-corruption audit

When conducting regular anti-corruption audits, VigoLex recommends that companies adhere to the following rules: 

  • involve external lawyers and attorneys in the audit to ensure its maximum thoroughness and objectivity; 
  • conduct the audit in a manner of limited awareness of it in order to minimize opposition from staff members and increase its effectiveness; 
  • assign confidentiality to the information on the audit results; 
  • if necessary, initiate an extrajudicial or judicial proceeding based on the audit results. 

Anti-corruption audit upon acquiring a business

One of the most common reasons for conducting anti-corruption audits in Ukrainian companies is the receipt of the relevant request from a counteragent. Foreign companies that are subject to the US Foreign Corrupt Practices Act (FCPA) or the UK Bribery Act (UKBA) may require anti-corruption audit before acquiring an asset or a business. 

Such audit can be conducted before or after the conclusion of contract.

Anti-corruption audit prior the conclusion of contract

A buyer who is interested in this audit may face opposition from managers or members of the seller’s team. Such opposition can reveal itself in difficulties in preparing questions or documents for documentary audit, developing questions for interviews with owners, managers or members of the seller’s team, etc. 

Before the conclusion of contract upon an anti-corruption audit VigoLex recommends to:

  • conduct it personally, and not online; 
  • study in detail the specifics of the seller’s business in order to understand potential corruption risks; 
  • involve in the audit those staff members and managers of the seller who are not interested in the audit results. 

Anti-corruption audit after the conclusion of contract

In such case, VigoLex recommends using all the advantages associated with the contract: 

  • use the access to confidential information and documentation; 
  • engage loyal staff members in the audit; 
  • encourage staff members to participate in the audit. 

Anti-corruption audit of politically exposed persons (РЕР)

In addition, VigoLex attorneys have experience of working with politically exposed persons, the so-called PEP, in respect of whom an anti-corruption audit can be initiated by the authorized state authorities. In such case, our attorneys can represent the PEP’s interests during the anti-corruption audit in order to prevent violation of the rights of a politically exposed person and minimize the risks to his or her honor, dignity and business reputation. 

Anti-corruption audit: services of lawyers and attorneys

VigoLex team provides its clients with the services for conducting or providing legal support for anti-corruption audits. We help our clients comply with national and transnational anti-corruption laws. 

VigoLex services during anti-corruption audits include: 

  • conducting a comprehensive internal audit of the company; 
  • organizing corporate investigations; 
  • development of anti-corruption policies and procedures for the company; 
  • conducting trainings for staff members; 
  • representing the company interests within the framework of extrajudicial and judicial resolution of disputes; 
  • legal support for the dismissal of staff members and top managers of the company. 
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