Third party due diligence: Time to change the Federal Sentencing Guidelines?

Third party due diligence: Time to change the Federal Sentencing Guidelines?

Joe Murphy – Compliance & Ethics Professional – January/February 2013

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I believe the Federal Sentencing Guidelines provide an excellent template for an effective compliance program, but this does not take away from the need for them to evolve over time. One issue that is scarcely addressed in the Guidelines is third parties and agents. Specifically, the word “agents” is used only twice; once in item 4(B) listing who should be trained (“as appropriate”) and once in item 5(C) noting that reporting systems should be available to third parties.

But over time, the role of third par- ties in compliance efforts has grown substantially, especially with increased focus on foreign corruption. Experience shows that in foreign corruption, third parties present great risks that need to be addressed in the compli- ance program. Nor is this risk limited to foreign corruption; in today’s economy, third parties play an integral role in many businesses and thus represent a compliance risk.

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