Question 1

Why does supplier due diligence matter for procurement teams?

Accepted Answer

Because a procurement decision creates legal exposure that sits with the buying organisation, not the supplier. Three exposures are distinct and are commonly confused. Sanctions: US civil liability is effectively strict, so dealing with a blocked party is prohibited whether or not you knew. Bribe...

Question 2

Which suppliers require enhanced due diligence?

Accepted Answer

Tier by risk rather than screening everything to the same depth. Factors that lift a supplier above baseline: jurisdiction - operations, ownership or banking in a FATF grey- or black-listed country, a sanctioned jurisdiction, or a secrecy jurisdiction; sector - extractives, construction, garments...

Question 3

How do sanctions apply to suppliers and subcontractors?

Accepted Answer

Screening the named supplier is necessary and not sufficient. Under the OFAC 50 Percent Rule, an entity owned 50 percent or more - in the aggregate, directly or indirectly, by one or more blocked persons - is itself blocked, even though it appears on no list. Aggregate means separate sanctioned h...

Question 4

What are modern slavery obligations in supply chains?

Accepted Answer

Four regimes matter to most buyers. Australia: the Modern Slavery Act 2018 (Cth) requires entities with consolidated revenue of AUD 100 million or more to publish an annual Modern Slavery Statement describing risks in their operations and supply chains and the action taken, filed on the public Mo...

Question 5

How often should suppliers be re-screened?

Accepted Answer

Point-in-time screening decays from the day it is run. OFAC amends the SDN List several times a month, and ownership, directorships, insolvency status and enforcement history all change without notifying you. A defensible cadence is risk-based rather than uniform: continuous or event-driven monit...

Procurement & third-party risk