Business Ethics, Law, and Compliance
What this domain tests
Business Ethics, Law, and Compliance tests anti-bribery and competition rules with extraterritorial reach, third-party and data obligations, and how you respond to a red flag under commercial pressure.
Core rules and concepts
- FCPA (US, 1977) - anti-bribery provisions covering issuers, domestic concerns and acts in US territory; accounting provisions requiring accurate books and records and internal controls; third-party payments are covered where the payer knows the payment will be passed on. A narrow facilitation-payment exception exists for routine, non-discretionary governmental acts.
- UK Bribery Act 2010 - four offences: bribing, being bribed, bribing a foreign public official, and a commercial organisation's failure to prevent bribery (strict liability, with an adequate-procedures defence). No facilitation-payment exception; private-to-private bribery is covered.
- Competition law - cartels, abuse of dominance, merger control; EU and US rules reach conduct with local effects.
- Data protection - GDPR applies to non-EU organisations offering goods or services to, or monitoring, EU data subjects; fines reach EUR 20m or 4% of global turnover, whichever is higher; transfers need an adequacy decision or SCCs plus a transfer impact assessment.
- Contracts - the CISG applies to international business-to-business sales unless opted out; Incoterms do not replace contract terms.
- Programme elements - risk assessment, tone at the top, third-party due diligence, training, gifts and hospitality thresholds, whistleblowing channels, monitoring and remediation.
Worked example
A distributor in a high-risk market requests a 12% success fee to 'manage customs relationships' ahead of a public tender. Red flags: a government touchpoint, a large and vague fee, no verifiable services, and a payment route through a third country. Analysis: under the UK Bribery Act the company can be liable for bribery by an associated person, and no facilitation-payment exception exists. Under the FCPA, expediting a discretionary customs decision is unlikely to qualify as routine and non-discretionary. Action: do not pay; run enhanced due diligence; convert to a fixed, benchmarked fee with defined deliverables, audit rights, anti-bribery representations and termination rights; document the decision. If risk cannot be mitigated, decline the tender.
Traps that cost marks
- Saying facilitation payments are lawful without naming the jurisdiction and conditions.
- Assuming agents, JVs and subsidiaries sit outside the compliance perimeter.
- Treating GDPR as relevant only where you have an EU establishment.
- Equating adequate procedures with a code of conduct alone.
- Ignoring books-and-records liability, which can attach even where no bribe is proven.