Third-Party Risk Management

Discuss third-party issues and trends impacting today's organizations.

Michael Volkov
Learning from Enforcement Actions: SBM Offshore and Compliance Allies
Last month, two former executives at SBM Offshore, a Dutch oil and gas services company, Anthony “Tony” Mace and Robert Zubiate, pleaded guilty to conspiracy to violate the FCPA for their roles in a scheme to bribe foreign government officials in Brazil, Angola, and Equatorial Guinea. The company has paid a combined worldwide total in criminal penalties in excess of $475 million related to these corrupt schemes. Mace and Zubiate engaged in a number of questionable activities, including authorizing the company to split payments to SBM’s Brazilian intermediary (paying a portion of the intermediary’s commission to an account in Brazil and another portion of the agent’s commission to accounts in Switzerland held in the name of shell companies); failing to identify the ultimate recipients of the authorized payments (shell companies owned by government officials); and utilizing a third party agent to pay bribes to foreign officials in exchange for those officials’ assisting SBM with winning bids. What are some controls that your company has in place to avoid this type of activity? Third party due diligence is critical, and we have also seen clients require third party checking account verification, particularly in high-risk transactions. How have you leveraged your working relationship with the accounting function to maintain compliance?
Michael Volkov
Michael Volkov
Learning from Enforcement Actions: SBM Offshore and Compliance Allies
Last month, two former executives at SBM Offshore, a Dutch oil and gas services company, Anthony “Tony” Mace and Robert Zubiate, pleaded guilty to conspiracy to violate the FCPA for their roles in a scheme to bribe foreign government officials in Brazil, Angola, and Equatorial Guinea. The company has paid a combined worldwide total in criminal penalties in excess of $475 million related to these corrupt schemes. Mace and Zubiate engaged in a number of questionable activities, including authorizing the company to split payments to SBM’s Brazilian intermediary (paying a portion of the intermediary’s commission to an account in Brazil and another portion of the agent’s commission to accounts in Switzerland held in the name of shell companies); failing to identify the ultimate recipients of the authorized payments (shell companies owned by government officials); and utilizing a third party agent to pay bribes to foreign officials in exchange for those officials’ assisting SBM with winning bids. What are some controls that your company has in place to avoid this type of activity? Third party due diligence is critical, and we have also seen clients require third party checking account verification, particularly in high-risk transactions. How have you leveraged your working relationship with the accounting function to maintain compliance?
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Nirupama Pillai
Third Party Risk Resolution
Hello everyone. Just wanted to gather some best practices around third party risk management. Once you obtain results from your screening and some red flags are indicated, who in the company takes the final call on whether this is an acceptable risk and how is this typically documented? Thanks in advance.
Nirupama Pillai
Nirupama Pillai
Third Party Risk Resolution
Hello everyone. Just wanted to gather some best practices around third party risk management. Once you obtain results from your screening and some red flags are indicated, who in the company takes the final call on whether this is an acceptable risk and how is this typically documented? Thanks in advance.
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