The U.S. Department of Justice’s Evaluation of Corporate Compliance Programs, Prong 10, “Third Party Management,” asks, “What was the business justification for the use of the third party in question?” This question is one of the most basic tools to operationalize a compliance program and should form the basis of companies’ third-party risk management processes.
It is common sense that companies should have a business justification to hire or use a third party and—if that third party is in the sales chain of the international business—it is important to understand why companies need to have that specific third party representing them. This concept is enshrined in the 2012 FCPA Guidance, which says “companies should have an understanding of the business justification for including the third party in the transaction. Among other things, the company should understand the role of and need for the third party and ensure that the contract terms specifically describe the services to be performed.”
