Your Questions: Answered - Written by on Tuesday, February 7, 2012 14:48 - 1 Comment

I’m appointing an Agent in China. What would Mabey Group do? Your questions answered. By Peter Lloyd CEO Mabey Group

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Dear Peter,

My company has appointed an agent in China to sell our products which has been recommended to us by our potential customers.

The Agent has signed the Agency Agreement which includes wording that says he will comply with the Bribery Act.   I thought this would be enough to protect us but someone told me that I should do more than this but I don’t see how I can since I can’t control the Agent who won’t be an employee.

How does the Mabey Group deal with situations like this?

Peter’s Answer:

We do not currently have an agent in China, but I am happy to explain our general procedure for this type of appointment.

In our view a written confirmation of compliance is essential, but by no means all that needs to be done. China remains a relatively high risk country, reference the TI index, although I believe that some parts of this country are moving very rapidly towards good practice.

I would start by doing extensive due diligence on the agent, using internationally recognised agencies to investigate and certify where possible. Face to face interviews and training would also be essential to ensure that they both understand and are committed to compliance with the Bribery Act.

An experienced interviewer needs to make good use of his or her ‘nose’. If any form of commission payments are involved, then each deal requires a level of due diligence, ensuring that the deal makes ‘sense’ and that the various parties involved have good credentials.

Finally, if there is a commission payment due I would want to see a re-affirmation that no corrupt payments have or will be made and a value for money check to ensure that the agents commission is not excessive, potentially providing the funds for corrupt activity.

I regard these as the basics, with the need to treat each agent, country and deal on its own merits. Remember that in the event of a corrupt payment, then your only defence will be the adequacy of your procedures and the court will have the benefit of 20:20 hindsight.


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