Understanding and Mitigating Sub-Party Risk

It is well-understood that third-party misconduct can give rise to liability under the FCPA and the U.K. Bribery Act (UKBA), but an additional nuance has recently caught regulators’ attention – increasingly, third parties are themselves engaging third parties, often referred to as “sub-agents,” “sub-contractors” or “sub-parties.” In a guest article, Kirkland & Ellis partner Abdus Samad Pardesi, with the assistance of summer associate Noor-ul-ain S. Hasan, highlight the statutory and guidance framework relating to sub-parties under both the FCPA and UKBA, analyze enforcement actions relating to sub-parties and provide strategies for companies to mitigate sub-party risks. See the Anti-Corruption Report’s three-part series on in-house perspectives on third-party due diligence: “Right-Sizing and Risk Ranking” (May 24, 2017); “Information Gathering” (Jun. 7, 2017); and “Red Flags and Follow-Up” (Jun. 21, 2017).

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