When third parties can bring on risk, you need to know with whom you're doing business.
Third-party agents and intermediaries are a double-edged sword. They can provide local expertise or specialized capabilities that enable a company to reduce its overall investment and efficiently maximize opportunities in a given market or operational function. They can also increase a company’s exposure to fraud, reputational concerns, and Foreign Corrupt Practices Act and other anti-bribery and anti-corruption risks, particularly in jurisdictions where graft or state ownership are prevalent.
We assess and monitor clients’ exposure to third parties—whether they be sales agents, distributors, legal advisors, customs brokers, consultants, or vendors—and implement due diligence programs to identify and mitigate risks.
Our third-party agents and intermediaries services include:
- Design of tailored third-party risk assessment and due diligence programs
- Background investigations of high-risk third parties, including comprehensive public records and open source research, and interviews of confidential sources and knowledgeable third parties when required
- Internal and external investigations of third parties when allegations of malfeasance arise
Knowledge is power.
Ensuring that intermediaries comply with local and international laws as well as your company’s own code of conduct can be challenging. An effective third-party due diligence program needs to consider a range of issues, including:
- The type of business Certain businesses, such as those in the defense industry, have greater interaction with government and regulatory authorities, which can lead to an increased risk of exposure to bribery or other improper behavior.
- The jurisdiction Certain jurisdictions, including countries in emerging markets, maintain under-developed or under-enforced compliance and regulatory regimes, which can be associated with a higher risk of corruption, political instability, and reputational problems.
- The availability of public records The quality or lack of publicly available information about companies and individuals can create uncertainty regarding the party with which your company is really doing business. In such cases, thoughtful background investigations, which gather information from available public records and trusted human intelligence sources, may be required to pierce the corporate veil.
