Glossary term
Third-Party & Intermediary Controls
Subject: Financial Crime, Bribery and Corruption
Also known as: Third-party anti-bribery controls, Business partner due diligence
These are the checks and contract terms a company applies to agents, suppliers, joint-venture partners and other outside parties, to stop them paying bribes on its behalf or exposing it to corruption.
Explanation
Most bribery cases involve a third party, so controls cluster around them. They run in stages. Before appointment, the company screens the party for ownership, links to officials, reputation, adverse news and sanctions, scaling the depth of checks to the risk of the country, sector and role. The contract then carries anti-bribery clauses, audit rights, a duty to report concerns and a right to end the relationship. Payments are made only to accounts in the party's own name and against evidence of work performed. After onboarding come training, periodic reviews and monitoring of fees and expenses, and red flags trigger escalation. Due diligence in business partnerships applies the same thinking to joint ventures and acquisitions, where the company may inherit the partner's past conduct. Prosecutors deciding whether a programme was real ask to see the diligence file on the agent who paid.
Example
A joint venture with a local company is planned to bid for a public road project. Before signing, the construction firm reviews the partner's owners and finds a minority shareholder who is a senior official's brother. It requires disclosure, adds audit and termination clauses, restricts payments to named bank accounts, and trains the partner's staff. Compliance reviews the venture's expenses every quarter.
Not to be confused with
- Third-Party Risk Management (TPRM)
- TPRM covers all supplier risks, including cyber, financial and operational. These controls address only bribery and corruption exposure.