Entering Equatorial Guinea with the Right Local Partner
NJ Ayuk, firstname.lastname@example.org
I always get asked by many foreign firms about the possibility of doing business in Equatorial Guinea with a local partner. Most of these businesses want to do the right thing by complying with local laws and international best practices, but they often tell me “you don’t go into a strange monastery with your own set of rules”.
In Equatorial Guinea, most foreign firms use local consultants or intermediaries. This is a great way to enter the market as it enables you to work with people who understand the local rules. They can also facilitate access to key decision makers, assist in developing various business ventures, and also help penetrate the EG market faster.
From my experience, if you have the right kind of firm or consultant, and if you have good policies on how to manage their work, Equatorial Guinea consulting firms can add value to your firm.
The flip side is that if you don’t hire the right kind of consultant or intermediary in EG, your company’s liabilities go up. It would force you to be recruiting a lawyer to defend you on FCPA, and other compliance issues.
For US firms, the Foreign Corrupt Practices Act (FCPA) prohibits the payment of bribes to foreign public officials and these rules are as complex as ever.
While operating in EG, you may be subjected to FCPA jurisdiction, which would make your firm liable when it pays or authorizes the payment of anything of value to a third party knowing that all or a portion of such value is or will be offered, given or promised, directly or indirectly, to a foreign official in connection with the sale of its product or service or in the obtaining or retaining of business or an improper advantage.
From my experience, many operators in Equatorial Guinea like Noble, Hess, Schlumbeger, and Vanco Energy have developed and maintained the most comprehensive standards. It makes sense for companies of other nationalities that are not subjected to the FCPA or similar issues to consider using such standards since they may be subject to investigation and prosecution under the FCPA as a result of some business nexus to the United States.
Below are some of the best practices for businesses to consider when recruiting EG consultants or intermediaries:
I always advise clients that TRACE is a good start. TRACE is a non-profit membership association that assists companies in the vetting and training of intermediaries.
If the level of your business does not require you to use an intermediary in Equatorial Guinea, I will advocate against using one. If you decide to use an intermediary because you need one, here are some recommendations
• Define the reasons for using the local consultant or intermediary;
• Are they the best you can have in EG?;
• Carry out a due diligence and ask for references in EG and abroad;
• Sign a contract;
• Ensure that you have an anti-bribery clause;
• Educate the intermediary on the company’s bribery policy and ongoing training on anti-bribery laws and best practices;
• Document, Document and Document every step. It is the best form of compliance and it is going to be your best evidence should have any difficulties.
Some clients always complain that the due diligence process is a pain and slows down rapid entry into the market. I believe it is the most important process of market entry in E.G. Yes it might be the most intrusive and potentially the most offensive part of the entire process of retaining a local consultant or intermediary, but it works and I have results to prove that.
About the Author
NJ Ayuk is a Legal and business professional with experience providing service to corporate entities in the Gulf of Guinea.
NJ obtained a BA from the University of Maryland College Park and a Juris Doctor from WM College of Law in the United States. He further holds an MBA from the New York Institute of Technology. As Managing Partner of ECEG Legal, he focuses on representing clients in energy, oil and gas, banking, public institutions, regulatory compliance, construction, project finance, mergers and acquisitions, doing businesses in Gulf of Guinea States, business transactions as well as taxation and arbitration. NJ provides legal and strategic advice on negotiation for the structuring of oil and gas projects in Equatorial Guinea and the Gulf of Guinea.
NJ is a frequent speaker/trainer/advisor on local content, FCPA Compliance and negotiations in the oil and gas industry with regards to Equatorial Guinea and the Gulf of Guinea States.
NJ began his legal career with Houston based Baker Botts, LLP’s Washington office where he gained entrée into the oil and gas sector and international business transaction and litigation.
NJ is a current member of the Association of International Petroleum Negotiators (AIPN), the Institute for Energy Law (IEL) and the Petroleum Joint Venture Association (PJVA).
NJ is also member of the American Bar Association (ABA), Section of International Law; International Energy & Natural Resources Committee and International Anti-Corruption Committee.
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