The failure to conduct anti-bribery and anti-corruption due diligence can lead to severe legal and financial consequences, as well as reputational damages. For buyers, ABAC due diligence can be especially critical because, under principles of successor liability, a buyer may be held liable for pre-closing bribery and corruption violations by the target. However, it is not straightforward to find out the ABAC issues, eg. kickbacks paid in cash. Could you share how to effectively conduct ABAC DD, are there any best practices, tools or expenses?
I agree that ABAC DD is one of the most complex ones. However, there are specialists that can do this and it is best to use them. Nonetheless, you can some special tools like Worldcheck. They help to do some initial scanning. Also, Google search may help under the news tab.
I believe there are firms specialized in this aspect and they can be engaged to perform ABAC DD. It sounds like part of the legal DD process or it could also be mitigated by certain clauses in the transaction documents. In addition, ABAC clearance would have also been done at the KYC stage, employing tools such as Worldcheck and Google search.
it’s true that there are specialized firms who can be hired to conduct ABAC DD. However, one of their main limitations is that they don’t operate in all districts/countries. For cross-border deals, ABAC issues will become more problematic.