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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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The spread of COVID-19 has disrupted global supply chains in nearly every industry. Many companies have scrambled to find alternative sources of supply, while other companies have entered new industries and have begun to manufacture masks, personal protective equipment, and even medical ventilators. In addition to the manufacturing and business challenges caused by COVID-19, bringing on new and untested supply chain partners brings with it significant compliance risks that should not be ignored.

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The U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act (2010) each require that companies take steps to ensure that suppliers and other third parties with which they do business are not making corrupt payments on their behalf. Typically, these issues can be prevented by conducting due diligence on these suppliers, business partners and other third parties; however, this process often takes weeks or even months. During supply shortages and disruptions caused by the new coronavirus, it may be tempting for companies to override controls or internal processes for those suppliers that are promising delivery of much-needed goods. Last week, however, two high-ranking officials from the Justice Department made clear that the United States will continue to enforce the anti-corruption laws, notwithstanding the supply challenges caused by the pandemic. Companies, therefore, must assume that they will be held to the same expectations when vetting new suppliers and sourcing new goods.

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Although the same anti-corruption rules continue to apply, U.S. and most foreign laws require a company to utilize a risk-based compliance program for vetting suppliers and other third parties. When bringing on new suppliers during the pandemic, this means that companies should have a plan that is designed to assess supplier risk in the current environment. This may differ from, or be an accelerated version of, a company’s ordinary risk assessment or diligence process, but it is important that the company have a documented plan that is designed to assess risk for its own circumstances and business. In developing its COVID‑19 compliance plan, companies should consider:

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Thompson Hine’s attorneys have significant experience in advising clients on the implementation of compliance programs and in conducting investigations and due diligence on potential third-party business partners. Utilizing a flat-fee or other alternative fee arrangement, we can assist your company in an expedited review of potential new suppliers and in developing a defensible COVID-19 compliance program that protects your company from the business, regulatory, and legal risks associated with supply chain disruptions in the pandemic.

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Matthew D. Ridings Certified Compliance and Ethics Professional <a href="mailto:Matt.Ridings@ThompsonHine.com">Matt.Ridings@ThompsonHine.com</a> 216.566.5561

Joan Meyer <a href="mailto:Joan.Meyer@ThompsonHine.com">Joan.Meyer@ThompsonHine.com</a> 202.263.4115

Thompson Hine’s multidisciplinary COVID-19 Task Force is monitoring the latest developments and guidance from public health officials and assessing the potential impacts on our clients and their businesses. The <a href="https://www.thompsonhine.com/services/covid-19-task-force" target="_blank" rel="noopener">COVID-19 Task Force page</a> on our website provides a centralized location for recent publications, webinars, articles and resources that you may find helpful.

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

https://admin.thompsonhine.com/wp-content/uploads/2022/04/COVID-19_Update_-_Supply_Chain_Disruptions_Bring_Compliance_Risks_to_the_Forefront.pdf

Supply Chain Disruptions Bring Compliance Risks to the Forefront

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