Jr. lawyer LC "Pravovoy Alliance"

Actual issues of anti-corruption Compliance and Due Diligence

To prove the fair and transparent running of business is no longer enough to have just word of gentleman,and the deal between companies takes place only after a thorough verification of contractor, with respect to compliance with anti-corruption legislation.


With coming into force law of Ukraine of 14.10.2014 № 1700-VII "Prevention of Corruption" (hereinafter - "Law") for legal entities, there are several brand new requirements concerning compliance of anti-corruption rules aimed at preventing corruption violations. In particular, directors, founders (participants) of legal entities are supposed to provide regular assessment of corruption risks in its activities and implement relevant anti-corruption actions. According to the Law, independent experts may be involved for audit (due diligence),in order to disclose and eliminate corruption risks in activities of legal entity.


In addition, fundamentally new requirement, concerning development and approval of own anti-corruption program, has been established for individual legal entities. Commissioner of anti-corruption program is supposed to monitor the compliance with this program by employees and founders (participants) of legal entity.

Nevertheless, experience shows that companies that are not formally classified in categories listed above are free to decide on development and approval of rules for employees in preventing the corruption in form of code of conduct, internal anti-corruption policy, and separate guidelines for employees etc.

It should be emphasized, that there are no mandatory requirements for the procedure of due diligence at the legislative level. As a rule, due diligence verifies the relevance and consistency of data in company's documents about its contractor, and their correspondence with information that can be found in internet databases (if they exist in the country of contractor). At that, information onpossible Implementation of any illegal acts of corruption by founders, directors, employees of contractor or founder of the companyshould be verified.

In practice, the search for publicly available data on contractor, as a rule, is done through Google, Yandex, Rabmler search systems. As for Ukrainian contractors, there is one additional step in search - Unified State Register of the Perpetrators of Corruption offenses available on

In addition, as a part of due diligence procedure, database of court decisions (if it exists in country of contractor), can be searched for cases where contractor was a defendant.

It should be noted, that during the detection of information that confirms participation of potential contractor in acts of corruption, bribery, fraud, and other illegal activities, there is a risk of losing business due to liability of his actions. Therefore, company will not obtain what was expected according to thecontract, and perhaps will not get the compensation for incurred losses.



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