Third party integrity due diligence
Companies with an international presence (or plans to expand internationally) are placing an increased emphasis on the need to understand the integrity risks posed by the third parties with whom they contract in those countries (including their representatives, agents, distributors and critical members of their supply chain), in particular for compliance purposes in light of new extra-mural anti-corruption legislation introduced in many western jurisdictions.
For those companies with operations in the UK, these changes are driven by Ministry of Justice guidance issued in relation to the Bribery Act – which is widely regarded as one of the most onerous pieces of corruption legislation anywhere in the world – which cites the need to conduct due diligence on current and potential third parties (both in the UK and overseas) as one of the core tenets of fulfilling the ‘adequate procedures’ requirement to prevent corruption. Many companies are consequently now faced with the challenge of conducting an appropriate level of due diligence on hundreds or even thousands of such third parties.
How we can help
Integrity Due Diligence (“IDD”) is the gathering of independent information to gain an understanding of the integrity and corruption risks associated with a third party. It provides companies with a means to both identify these risks and confirm (or otherwise) information provided to them by a third party.
Deloitte’s dedicated IDD team comprises over 250 specialist professionals worldwide who speak more than 85 languages fluently, and has extensive experience of conducting timely and cost-effective IDD on a large number of third parties. We do not believe in a ‘one size fits all’ solution and instead we offer our clients several different ‘levels’ of search, enabling our client to choose the level proportionate to the risk presented by each current or proposed relationship (taking into account factors such as the nature of the services to be provided and the corruption risks associated with the jurisdiction where the Subject is located).
We tailor the scope of our work to our client’s specific requirements; however, the most common scope chosen by our clients would typically seek to identify information on:
- The identity of the company.
- Its business background and activities.
- Its ownership (including indications of state ownership).
- Any political or official connections held by the Subject or its Principals.
- The reported involvement of the Subject or its Principals in a pre-agreed set of ‘noteworthy’ issues (including bribery and corruption).
- Searches of a range of pre-agreed international sanctions lists and PEP databases.
We are able to assist our clients with one-off remediation programmes (for example, conducting risk-based IDD on hundreds or thousands of existing third party companies to bring the due diligence on those third parties into line with the Ministry of Justice guidance) or to conduct our work on an ongoing basis (that is, helping clients to screen new proposed third parties as they seek to expand their relationships). In either case, we employ a stream-lined process which enables our specialist in-house team to screen large volumes of third parties at a time.
Where our clients look to us to conduct IDD on a large number of third parties on an ongoing basis, we offer the use of a secure internet-based portal; this portal is an intuitive tool which serves as both a communication tool – providing a quick, easy and streamlined way to submit IDD requests, track their progress and retrieve reports – and a project management tool, offering clients the opportunity to analyse their requests (for example, by geographical location or business unit), view outstanding requests and keep track of costs.