Aquisitions In Emerging Markets Also Pose As A Significant Corruption And Bribery Threat

Aquisitions In Emerging Markets Also Pose As A Significant Corruption And Bribery Threat

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Emerging markets can offer growth to companies but can also bring more #corruption & #bribery risk. @sourceintel

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Monday, September 14, 2015 - 2:00pm

CONTENT: Article

For any sized company, stepping into an emerging market is tempting and can offer many open-ended opportunities. Of course, just like any opportunity, there are its risks and when expanding into emerging markets, there are greater possibilities of corruption and bribery risk, more so then markets that are already established. So the question always remains, how do you move forward and address FCPA Risks in emerging global markets and is the risk more when dealing with acquisitions that involve government contracts?

“Whether the potential buyer is a corporation or a private equity firm, they do not want to deal with a reputation issue. This regulatory roadblock is increasingly hard to avoid since everyday business functions in all industries, from building warehouses to exporting goods, typically involve government touch points,”

All companies are in the business of growing and making money, and some of those growth opportunities seem too good to pass up, but the underlying risks can cause major problems both financially and publicly. Whether it is through product entry in new markets or acquisitions, due diligence needs to be done and made very clearly that efforts are being taken to ensure that no issues if corruption and bribery are taking place.

In an article in the Wall Street Journal, it offers some interesting ways on how to address FCPA risk when dealing with acquisitions in emerging markets. The concept here is really to find, thoroughly, and address risks that can become potential bombshells in the future. Which is why issues that arise from acquiring new business in other parts of the world, in these “emerging markets” can be very risky.

Ultimately, making sure you do your due diligence is key for any business. Controlling what your partner or future acquisition may have done in the past is out of your control, but finding these issues and addressing them so they do not happen again is key and will be a priority of the merger. Working with external parties to help identify and handle these type of issue can greatly reduce your risk and have you ready for any possible corruption and bribery issue. To learn more, be sure to download a guide to FCPA.

CATEGORY: Education