Corruption Due Diligence For Domestic Acquisitions

Due diligence for bribery and corruption is routine for cross-border transactions. According to a forensic accountant writing in the FCPA Blog, the same rigor should apply to domestic transactions for the same reason – the specter of successor liability. In the U. S., successor liability can apply if the acquirer assumes the liability, if the transaction is a fraudulent attempt to evade liability and in a number of other scenarios. The term “domestic” shouldn’t lull anyone into a false sense of security on M&A, or even asset acquisitions. If a U.S. acquirer is considering a deal with a U.S. based target company it should still inquire about business activities that occur outside the U.S. and involve dealing with foreign government officials. The same caution applies to domestic transactions in countries with laws similar to the FCPA.