Intermediary (Third-Party Agent)

Companies often hire local agents to handle licences, customs, tenders or introductions. That is lawful and sensible, but it creates distance. If the agent pays a bribe, the company can be liable even though it never made the payment, especially where it ignored warning signs. Studies of foreign bribery cases show that intermediaries feature in a large share of them. Common red flags include a commission well above the going rate, payment to an account in another country, no clear services, a recommendation from an official and reluctance to sign anti-bribery terms. Controls cover risk-based due diligence before appointment, a written contract with audit rights and compliance clauses, payment only against evidence of real work, and periodic review. Here the term means agents in bribery risk, not financial intermediaries in the banking sense. Prosecutors can treat an ignored red flag as knowledge, which is how a company ends up answering for a payment it never made.

A machinery exporter wants to enter a new market and hires a local consultant on a 12% success fee. During due diligence, compliance finds the consultant's only office is a postal address and that his brother-in-law works in the ministry buying the machinery. The company asks for details of his work, finds no satisfactory answers and does not sign the agreement.