The Justice Department Evaluation of Corporate Compliance Programs states:

“Appropriate Controls – What was the business rationale for the use of the third parties in question: What mechanisms have existed to ensure that the contract terms specifically described the services to be performed, that the payment terms are appropriate, that the described contractual work is performed, and that compensation is commensurate with the services rendered?” 

It’s a given that companies should incorporate compliance terms and conditions into their contracts with third parties, beginning with a template, which should be used as a starting point for negotiations. The advantages of such a template are several, including: (1) the contract language is tested against real events; (2) the contract language assists the company in managing its compliance risks; (3) the contract language fits into a series of related contracts; (4) the contract language is straightforward to administer, and (5) the contract language helps to manage the expectations of both contracting parties regarding anti-bribery and anti-corruption.

While many are under the assumption that it won’t be an easy task to secure a third-party agreement with such conditions, that might not be the case, especially if the company in question asserts from the start that it is non-negotiable. When faced with just such a situation on non-commercial terms, many third parties will back down. It’s important to remember that while there may be some flexibility, the Justice Department requires the minimum compliance terms and conditions.

Most importantly, management should make sure to inform them that it’s in everyone’s best interest; when third parties agree to such terms, they can then use that as a market differentiator—which can make all the difference.

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