Compliance Issues When Using Third Parties

Global Compliance 

Third party actions taken on your behalf are to a significant extent as much as your responsibility as actions taken by your employees.  As such, it is necessary for all parties involved at every level of the transportation and relocation industry to establish effective processes to govern and direct appropriate activities that are conducted on their behalf.

Expectation is that you know the identity of third parties, that you have a process in place to screen third parties, and that you retain control over the activities that they conduct on your behalf.

Your concerns should be raised and special care taken in cases where you do not know who you are doing business with, you use geographically dispersed contractors, you work in different cultures (particularly high risk cultures), and

Know Who You Do Business With

Maintain a database of third parties who you do business with.  The database should include information on the applicable contractor and the process that was followed to conduct due diligence.

Risk Assessment of Third Parties

You should have a system in place to identify the third parties who present the most risk.  Risk factors may include geographic high risk areas (Transparency International Competition index).

Incorporate Due Diligence

Adopt a process for selection of third party contractors based on risk.  Your system should categorize the level of risk that is presented by each subcontractor.

Written Contracts

Written contracts that set forth expectations and standards for third parties must be put in place.

Responsible Individual

One individual with your organization should be designated as being responsible for managing the third party

Be Guided by Red Flags

You should create a list of “red flags” that will alert you to existence of facts that suggest that there may be a higher degree of risk with a specific subcontractor.