China’s investigation into bribery at GSK in 2013 marked a potential new era in Chinese anti-corruption enforcement. Notably, the Chinese government alleged that GSK used its relationships with local travel agencies to facilitate bribery – both to provide government officials with improper benefits and to host “conferences” that were used to generate pools of cash that could later be used for bribes. GSK is not alone. According to anti-corruption experts, in China and many other countries, travel agency fraud is part of a growing “industry” designed to help employees and subsidiaries evade company and legal regulations. As regulators become more familiar with these types of schemes, it is likely that travel agency relationships will come under stricter government scrutiny. To assist companies in strengthening their compliance programs with regard to the use of travel agents, the Anti-Corruption Report is publishing a three-part series on identifying and preventing corruption involving travel agents. This, the second article in the series, outlines industries that are at particular risk for travel agent-related corruption schemes, explains why travel agency fraud is so difficult to detect and provides three steps for strengthening company control over travel agents. The first article
detailed how travel agency fraud is accomplished and examined the motivations underlying such fraud. The third article will provide five concrete suggestions for preventing and detecting such fraud. See also “Seven Lessons from China’s Bribery Investigation of GlaxoSmithKline
” (Aug. 7, 2013).