Advisory Case on an Anti-Corruption Compliance Pledge

1. The Client's Situation

In the course of concluding a supply contract with a major customer, the client was asked to sign an "Anti-Corruption Compliance Pledge." The pledge included clauses that could operate unfavorably to the supplier, such as the duty to cooperate with investigations, requests for submission of materials, and contract termination and damages, and the client wished to have it reviewed for whether the contractual risk was excessive and whether amendments were necessary.

Your Legal Team reviewed each clause of the pledge and identified the parts that, contrary to the customer's purpose of complying with its anti-corruption policy, could infringe upon the supplier's business confidentiality and rights. In particular, we presented amendments in the direction of limiting the scope and procedures of the "request for investigation cooperation and submission of materials" clause to a reasonable level, and of specifying grounds for refusal or reservation in order to protect trade secrets and third-party rights. We also recommended that the "contract rescission, termination, and damages" clause specify a graduated procedure of measures according to the degree of violation.

The client reflected the proposed amendments and proceeded with negotiations with the customer, and was able to conclude the final pledge in a form that substantially mitigated unreasonable risks. Through this, the client secured a structure that allowed it to comply with the anti-corruption policy while protecting its contractual rights and interests in a balanced manner.