Strategies for Mitigating the FCPA Risk of Entering Into Joint Ventures

Companies are relying increasingly on joint ventures (JVs), that is, a business undertaking by two or more companies engaged in a single defined project, particularly when accessing a new market or building a new business line.  While JVs may make sound business sense – allowing the JV partners to leverage one another’s expertise, markets, resources, reputations, etc. – they also present significant legal risk under the FCPA.  Although the potential for FCPA liability based on the actions of a joint venture or one of its partners may depend on the level of control a company has over the joint venture or the extent to which it was aware of or involved in the misconduct, the risk of partnering with a company engaged in misconduct is always present.  In a guest article, Andrew J. Dunbar and Ike Adams, partner and associate, respectively, at Sidley Austin LLP, discuss the FCPA provisions giving rise to joint venture liability based on the actions of joint ventures and joint venture partners as well as the steps companies should take before entering into joint ventures in order to limit the risk of FCPA liability.

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