Darshak S. Dholakia
Washington, D.C. +1 202 261 3467
International business transactions can be subject to intense scrutiny due to the broad scope of the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, in addition to other similar anti-corruption measures around the world. The risks for private equity investors that can resultfrom corrupt activities of a target company may be significant, especially if the target operates in a high-risk jurisdiction or business sector. These risks can include loss of value of the investment, as well as being held liable for previously unknown wrongful acts committed by the target, its local shareholders, or others acting on their behalf. Given the significant penalties that can result from violations of these laws, private equity investors can no longer afford to overlook the risks deriving from potential compliance violations attributable to a target or its shareholders before completing a deal. Further, while this article focuses on violations of anti-corruption provisions, similar considerations generally apply to international trade sanctions regulations.
Read "Managing The Compliance Aspects Of PE Investments."