The principal is responsible for its agents
Chinese anti-bribery enforcement increasingly treats the principal as responsible for its distributors' and agents' conduct.
The wrong assumption: βThe distributor's actions are their own problem.β
A distributor that pays a kickback to win a tender can expose the foreign principal to liability and reputational damage β and to parallel liability under the FCPA or UK Bribery Act.
The right approach: Build compliance into the distribution relationship: due diligence on distributors, anti-bribery contract terms, audit rights, and training β and exercise those audit rights, not just retain them.
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