Case Study – Africa
As part of its emerging market business development plans, a European manufacturing company with a strong US presence was looking to expand its distribution network to sub-Saharan Africa and had identified a number of potential partners. Having identified weaknesses in its existing FCPA compliance programme, the company engaged Billiter to work in conjunction with its external FCPA Counsel to design a due diligence programme to ensure it was fully compliant with the anti-bribery provisions of the FCPA.
Billiter conducted Enhanced Due Diligence (EDD) on two potential distributors which were focused on initially detecting any FCPA “red flags”. We focused on identifying the ultimate beneficial owners of the distributors, examining their activities, reputations and political connections. Local source enquires were undertaken to identify any substantiated information suggesting that any had been linked to corruption in the past or had close links to any political Politically Exposed Persons (PEPs), government ministries or State owned companies.
Billiter’s investigation found that one distributor was a well-respected and successful company in its sector and had been in operation for over ten years. While many other companies in its sector had been linked to local government officials, the company’s shareholding structure showed it to be owned by two successful local entrepreneurs with no links to PEPs. A site visit showed its offices were based in the city’s commercial district and were well staffed. Checks on the second distributor immediately identified a complex ownership structure which showed it to be owned by a family close to several senior civil servants in the Department of Labour. It had only one contract, which was with a government ministry to supply goods to a State owned company. A site visit indicated that the company had no tangible offices and was registered to the address of a local law firm.