U.S. and international regulators continue to express concern about the nature and extent of due diligence being conducted by companies on their third party relationships, such as merger and joint venture partners, vendors, contractors and agents. Both the U.S. Department of Justice and the U.K. Financial Services Authority have stated that companies can mitigate the bribery and corruption risks posed by these third parties by conducting “risk-based” anti-bribery and corruption due diligence.

HOW CAN DAYLIGHT HELP

Daylight has used its experience and expertise with collecting and analyzing large volumes of transactional and account data to build and refine its Suspicious Transaction Analysis and Reporting (STAR) tool. STAR is a proprietary rules-based methodology and case management system that enables us to collect, normalize and analyze terrabytes of account and transactional data pertaining to your domestic and international third parties; and it enables you to look atyour third parties within a risk-based framework.

STAR takes your master vendor file and subjects it to approximately 80 rules that screen for known behaviors and characteristics of third party bribe payers, various sanctions lists and a Politically Exposed Persons list. STAR also runs a series of wire transfer analytics to look for payments or payment patterns that could indicate fraudulent activity. STAR then assigns each third party a risk category of high, medium or low. The end result is a risk ranking, or “heat map,” that helps you better understand the risks associated with each of your third parties. You can then devote your compliance and other investigative resources to focus on those third parties that present the greatest risk exposure to your company.

THE DAYLIGHT APPROACH

STAR’s case management and work flow functionality allows you to stay in control of the process. You can access the system and track the progress and status of an investigation. You can obtain overall project metrics, such as the percentage of the project that has been completed, as well as detailed metrics measuring the productivity of every analyst or investigator assigned to your project.

Daylight’s approach is consistent with the guidance given by the U.S. Department of Justice and the U.K. Financial Services Authority, which calls for a risk-based approach to conducting third party anti-bribery and corruption due diligence.