Due diligence in the face of transnational corruption

As a result of the international agreements signed by Colombia, Law 1778 was issued in 2016 through which rules on the liability of legal persons for acts of transnational corruption and other provisions in the fight against corruption known as the Anti-Bribery Law were issued, by virtue of which some measures are regulated and promoted to prevent bribery conducts and acts of corruption that may be adopted by the companies and that would also constitute a mitigation of the sanctions that could eventually be imposed by the Superintendence of Companies for cases of bribery or transnational corruption. Among such measures are the implementation of business ethics programs and the development of an adequate due diligence process.

It is with respect to the latter measure that we will comment on in this paper, since much has been said about the importance of corporate due diligence for the purpose of business divestiture or related to the so-called know your client (KYC) in financial service providers. In the face of cases of transnational bribery and acts of corruption, due diligence processes take on major importance, since they help reduce the risk of the company's internal and external clients incurring in bribery offenses and, in the event that such filters are overcome, as previously indicated, they help mitigate the penalties that may be imposed on the company.

From this perspective, due diligence should be aimed at providing the legal entity that prepares it with the necessary elements to identify and assess the risks of transnational bribery and corruption, and provide confidence to society that its contractors and/or suppliers or consortium members do not incur or perform acts of corruption, and that they have adopted the necessary measures to prevent them, since in practice it has been seen that contractors can be used to make and conceal payments related to bribes to foreign public servants in the context of international business or transactions.

Thus, the scope of due diligence should be established for each specific case, depending on different factors, such as, but not limited to: (i) the geographic location; (ii) the industry sector; (iii) information and reputation of the person with whom the contract would be entered into; (iv) the amount of the contracts; (v) the public entities involved in the operation directly or indirectly, among others. Due diligence should be carried out by employees, or third parties specialized in these types of tasks, and should be performed on a regular basis (depending on the duration of the business relationship between the parties). For such purposes, it may be helpful to consult the Global Corruption Perceptions Index published annually by the non-governmental organization Transparency International.

It is worth mentioning that due diligence is a highly suitable mechanism for the prevention and mitigation of the risk of transnational bribery and other acts of corruption, but it is not the only one, this should be accompanied by the implementation of business ethics programs, development of internal audit policies, promotion of transparency, the inclusion of contractual clauses of declarations and guarantees and the possibility of auditing third parties or entities with which it will have business relationship.

The sanctions regulated in the Anti-Bribery Law establish fines of up to two hundred thousand (200,000) legal monthly minimum wages in force, inability to contract with the state for up to 20 years, publication of the sanction in the media and prohibition to receive incentives from the State for five years.

Thanks to business globalization, companies tend to internationalize their activities, which implies for them to maintain commercial and/or legal relations with entities from different countries. This is why governments have adopted measures to ensure that international business or transactions are carried out in a framework of transparency, since, as stated by the Organization for Economic Cooperation and Development (OECD), corruption, in its different forms, can undermine confidence in governments, companies and markets.