1. Due Diligence and Auditing Third Parties
Philippe Oudinot
Thad Coakley
Carl-Peter Carlson
Patricia Byrne

2. Due Diligence Tools – Putting the 3rd Party Under the Microscope
Business Level proposal form with documented business and payment justifications
Application Form with compliance questionnaire: 3rd party to provide
References
CVs for the key personnel
Corporate Registration Documents
Evidence of Brokering Registration if relevant
Certification of compliance with Anticorruption Laws
Public Records/ Media Checks
Independent Third Party Diligence Report
Due Diligence Interview (in person or by phone)
Comprehensive review of the file
Standard form agreement with Anticorruption Reps and Warranties
OSI’s Diligence Process – a thorough scrubbing
When we engage in due diligence we find out as much as we can about the adviser.
We ask them to fill out an application form that lists all of their owners and key personnel and provides both their corporate registration address as well as their physical location.
We ask for information about their ownership composition, copies of the corporate registration documents, and curriculum vitae for all of their key personnel.
We require the adviser to certify that they do not have any personal connection to any governmental entity or official, or to explain any such connection to us in detail.
We ask them to provide us with references and then we contact the references to confirm that the adviser has acted for them and has not shown any tendencies towards improper conduct.
We require the adviser to sign a certification saying that they will not pay bribes and that everything they have told us is true and correct.
If they are dealing in ITAR controlled products, we will confirm that they are registered as a Dept. of State Broker.
We are required by our policies to conduct independent third party diligence on all of our marketing advisers. We can do this in one of two ways – we can either get an international company profile report from the State Department, which is less expensive but which can take up to 4 months to issue, or we can hire a private third party diligence provider, which will issue a report in about a month, but which is much more expensive.
We also conduct an in person interview with each adviser and run public record and media checks on all of the owners and key personnel of the adviser.
If we have any problems getting the adviser to respond to requests for information, we will come back to the agreement monitor for assistance.

3. Due Diligence Red Flags: What to Look For
The following list is not exclusive, look for any suspicious circumstances
Reputation for corruption: country ( or intermediary
Ties to Government: family ties, political contributions, recommendations by an official
Capabilities: the third party can’t do what is needed, or is not expected to do work; or doesn’t have offices
Compensation: Requests for high commissions, requests for payments in cash or to numbered accounts, requests for payment through a third party or into a third country, inaccurate or falsified invoices or a refusal to document expenses
Questionable circumstances: secrecy, lack of cooperation with due diligence, illegal representations, suspicious statements

4. Back-check Controls and Auditing