ICC Anti-corruption Third Party Due Diligence: A Guide for Small- and Medium-sized Enterprises

SMEs are often on the receiving end of burdensome due diligence procedures of large multi-national companies. These requirements can be overwhelming and often companies feel they do not have sufficient resources to meet them.This Guide aims to address these concerns and inspire Small and Medium size Enterprises (SMEs) to engage in due diligence by creating achievable and manageable due diligence goals.

Following the Guide a company can: 

Know and have confidence in their counterparties;

• Through such knowledge and confidence meet the conditions for responsible investment;- Avoid prosecution/reputational/financial damage from being implicated in an anti-corruption issue;
• Develop an ethical brand;
• Provide assurance to business partners, in particular larger organisations that they are an ethical company.

SMEs must also develop robust anti-corruption ethics and compliance procedures to ensure they minimise the risk of corruption and adhere to international anti-corruption standards . Understandably, many SMEs are overwhelmed by the extensive international anti-corruption legislation and the complex ethics and compliance procedures in place in larger, multi-national companies. However, ethics and compliance does not necessarily need to be on a grand scale and supported by a dedicated legal department. There are manageable ways in which smaller companies can protect themselves by better managing corruption risks. A key element to a simple but effective ethics and compliance programme is due diligence.

This is the focus of this Guide which sets out what due diligence is, why it is necessary, when it is necessary and how it can be implemented to protect a company from the risk of corruption as much as possible.

It provides practical advice on how SMEs can cost-effectively conduct due diligence on third parties they engage to perform services on their behalf. It focuses on corruption risks associated with engaging third party suppliers, contractors and consultants in an international and domestic setting and how those risks can be managed.

This tool will also assist SMEs create an effective due diligence procedure that fits into an overall ethics and compliance programme. For SMEs that do not have any ethics and compliance procedures in place, it can be considered a good starting point. The Guide can be used by any SME, of any size (even very small companies) or industry and it can be adapted so that the due diligence programme is tailored to the specifics needs and industry in which the company operates.

Adoption of this Guide by SMEs will provide reassurance to prospective customers and can be used as evidence of an overall compliance commitment; the commercial benefits of which should not be underestimated.