Coronavirus: Reopening businesses – compliance risks

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COVID-19 Alert

By:

To help stop coronavirus disease 2019 (COVID-19) from spreading, governments around the world have required businesses to close and, where possible, to require their employees to work from home. In the wake of this closure, economies have stagnated. In the United States, for example, it was recently reported that over 22 million people filed for unemployment over a four-week period. Now, several countries have started to reopen their economies or are considering doing so. Though companies have a financial incentive for economies to reopen as quickly as possible, they are urged to be cognizant of both potential anti-bribery and anti-corruption (ABAC) risks and potential compliance difficulties when adhering to differing openness standards.

Many businesses have suffered heavy financial losses relating to COVID-19, not only impacting bottom lines but employees as well.  As economies reopen, companies and their employees may feel the need to ensure that they too reopen as quickly as possible.  Companies are encouraged to remind employees that influencing government officials to reopen their business through gifts, payments, or anything of value can create liability under ABAC laws.  US companies may face liability under the Foreign Corrupt Practices Act (FCPA) for giving anything of value to a foreign official to influence an act or decision, secure an improper advantage, or obtain or retain business.[1]

In addition to compliance with ABAC laws, companies are urged to monitor their compliance with country-specific standards for operation.  For example, as China continues to reopen, employers now may be required to check their employees’ health status, sometimes done through a mobile app containing travel history and symptoms.[2]  Requirements in China are city-specific with varying levels of stringency. In Spain, construction and manufacturing businesses have been permitted to reopen. A “good practices” guide issued by the Spanish government suggests maintaining at least six feet of distance between workers where possible and, where not, staggering working hours.  In Italy, the federal government has permitted bookstores, laundromats, children’s clothing stores, and stationery stores to reopen; however, these reopenings are subject to restrictions imposed by the regional governments, with the Lombardy, Veneto, and Lazio regions limiting which stores may open and when. As these examples make clear, there is no global consensus on which businesses may reopen and when and how to reopen.

Practical steps for reopening

Despite these varying requirements, and in light of the global sensitivity surrounding COVID-19, companies are encouraged to take care to ensure compliance among employees, including consideration of the following measures:

  • Risk rate the markets.  Some markets may be under greater financial pressure or have a greater risk of corruption. Consider rating the markets’ risk potential and engage local compliance officers with practical training on issue spotting potential violations in reopening markets. 
  • Avoid one-size-fits-all approaches. Not all countries have reopened their economies, and variations abound among those countries that have reopened or are reopening their economies. Consider whether one policy for compliance across all countries in which a company operates may not effectuate compliance goals.
  • Remain informed.  Standards for openness and businesses can change quickly, making it essential for companies to constantly monitor government communications, industry communications, and the news for updates. 
  • Start small.  When reviewing how to reopen within a country, companies may consider beginning at the local level and expanding outward. As is the case in Italy, a country may allow certain businesses to reopen, but regions may impose additional restrictions.

Supply chain due diligence

In many sectors, global supply chains have been disrupted and companies have been forced to turn to new suppliers to ensure continued business operations. In the urgency to reopen business and with new ways of working, enhanced due diligence of business partners is strongly encouraged.[3]  Among factors that may be considered include:

  • Tone from the top.  Reinforcing the importance of supplier due diligence, emphasizing that these obligations remain, and communicating that they may need to be enhanced. 
  • Obtain diligence documents.  Verifying that a prospective supplier is in good standing and that the individuals representing the prospective supplier are authorized representatives. Requesting the prospective supplier’s business license identification, any other relevant registrations, and all diligence documents up front, potentially via a questionnaire or checklist. 
  • Background checks.  Conducting background and reputational research on prospective suppliers.
  • Audit processes.  Testing existing due diligence processes and procedures for validity by auditing a random sampling of due diligence results for accuracy and rigor. 

Despite commercial pressure to reopen businesses, companies are urged to do so in compliance with various and changing government restrictions or may risk longer term liabilities that potentially could outweigh short term gains. 

For more information, please contact the authors, your DLA Piper relationship attorney, or any member of our White Collar group.

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This information does not, and is not intended to, constitute legal advice.  All information, content, and materials are for general informational purposes only.  No reader should act, or refrain from acting, with respect to any particular legal matter on the basis of this information without first seeking legal advice from counsel in the relevant jurisdiction.   


[1] 15 U.S.C. §§ 78dd-1(a)(1).

[2] For additional information on businesses reopening in China, see DLA Piper’s guidance here.

[3] For additional information on mitigating risk in the supply chain and practices for vetting Chinese medical suppliers, see DLA Piper’s coverage here.