Disclosure Requirement of Conflict Mineral Rule Held Unconstitutional: Applicability, Due Diligence, and Reporting Requirements Remain Intact Reply

2519766036_9e37579642_oOn April 14, 2014, the U.S. Court of Appeals for the D.C. Circuit held that the disclosure requirement for conflict minerals in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Act”) was unconstitutional.  In National Association of Manufacturers v. Securities and Exchange Commission, the court found that requiring companies to declare whether their products are “DRC conflict free” forced commercial speech in violation of the First Amendment.  However, the other conflict mineral requirements in the Act regarding applicability, due diligence, and reporting remain intact.[1] More…

Day 10: $500 Credit Applicable to Any TRACE Due Diligence Service

Offer: $500 Credit for Any TRACE Due Diligence Service

This offer is limited to the first 10 respondents.

Day 10-TRACE Holiday Promo-Due Diligence CreditTRACE offers both members and non-members a variety of customizable risk-based due diligence services. For the final day of our 10 Days of Giving, TRACE would like to offer a $500 discount on ANY TRACE due diligence service to the first 10 respondents. Assess third party risk using our TRACEsort tool or take advantage of our TRACEcertification portable due diligence reports, which contain a wealth of anti-bribery compliance information establishing that an intermediary has been thoroughly vetted, trained and certified by TRACE.

About TRACE Due Diligence Services

TRACE’s due diligence services are managed by skilled multilingual due diligence analysts, under the supervision of FCPA lawyers, and range from an initial compliance screen to an intensive, on-site review of third party intermediaries and business partners. Many TRACE services offer ongoing monitoring of third party relationships. TRACE has performed over 300,000 due diligence reviews in almost every country, and unlike most vendors, never outsources due diligence work to independent contractors.  Leveraging more than a decade of anti-bribery expertise, in-house research capabilities in twenty languages and a network of TRACE Partner Law Firms around the globe, TRACE offers competitive pricing and superior quality.

TRACE Services Chart

Learn more about the services TRACE offers and download our Due Diligence Brochure at http://traceinternational.org/Diligence/due-diligence-services.html.

This offer is non-transferable, restricted to companies only and may not be redeemed by law firms or vendors. 

To accept this offer, please write to info@traceinternational.org. This offer is limited to the first 10 respondents. Due diligence credits must be redeemed prior to December 1, 2014.

Our 10 Days of Giving ends today! Happy Holidays from TRACE! We look forward to working with you in 2014 and wish you a prosperous (and compliant) new year.

Make sure you’re following us on Twitter, LinkedIn, YouTube and Facebook to catch deals offered throughout the year and to stay up to date on the latest compliance developments.

The “next generation” of due diligence Reply

TRAC LogoDue diligence can be slow and repetitive and, as a result, expensive and time-consuming.  What we have been hearing from companies for several years is that they want to move to “next generation” due diligence.   Companies and their third party business partners both want a robust service, available quickly at a reasonable price.   TRACE has responded with two new products over the last year:  TRAC is designed for baseline due diligence for lower risk third parties, like suppliers and intermediaries with low volume sales, or those selling into markets with low levels of bribery; TRACEcertification, which we’ll talk about next week, is designed for higher risk third parties.

TRAC solves seven different problems for most companies:

  1.  TRAC collects information on ownership, including ownership by government officials.
  2. TRAC searches all names – the entity’s and all owners – against hundreds of international watchlists on a daily basis.
  3. The TRAC team resolves “false hits” on these watchlists, saving companies the time and manpower usually needed for this.
  4. TRAC stores PDF copies of business registrations for entities, but only after TRAC analysts with the requisite language skills have reviewed the registrations.
  5. TRAC goes beyond anti-bribery compliance and collects information related to trade controls, conflict minerals, human trafficking and other misconduct.
  6. TRAC organizes third parties into a single, searchable database and provides an auditable trail for companies.
  7. TRAC is entirely free for companies to use, which makes more resources available for due diligence on higher risk entities or those for which red flags are identified.

 While TRAC relies heavily on state-of-the-art automation, review by multilingual TRACE analysts is the most valuable aspect of TRAC.   Each TRAC application is reviewed by an analyst with the appropriate language skills and rigorous due diligence training under the management of an FCPA lawyer.

Join the growing community of companies across all industries using TRAC for baseline due diligence.   Third party intermediaries pay just US$80 for a fully-vetted TRAC number and then make their profile available to companies for review.

To learn more, watch our 90-second TRAC video clip here or download our TRAC brochure here.

To schedule a personal, web-based demo, please email us at info@tracnumber.com.

TRACE Profiles: Stories from the Front Lines of Due Diligence Reply

Periodically, TRACE Blog runs a “TRACE Profile” series, where we sit down with a TRACE employee to discuss what it’s like to conduct anti-bribery due diligence in today’s global marketplace.  We recently caught up with Yicun Chen, who’s worked as a due diligence analyst at TRACE for the past two years.  Born outside of Hangzhou China, the capital of Zhejiang Province in Eastern China, Yicun has lived and worked in the Washington D.C. area over the last several years.

Yicun Chen, TRACE Due Diligence Analyst

Yicun Chen, TRACE Due Diligence Analyst

TRACE Blog:  Could you start just by telling me a little bit about your background, both your life growing up in China and your education as a lawyer before joining TRACE?

Yicun Chen:  Sure.  Well I studied at Zhejiang University where I earned a degree in law. After graduating from there I studied at the London School of Economics for one year.  It was my first time living outside of China and I got a masters in media and communications law.  When I returned to Hangzhou I became a lecturer at a university, teaching law, media and communications as well as practicing law on the side and working part-time at a newspaper.

Then, three years ago, I moved to the United States and attended American University’s Washington School of Law where I received an L.L.M. in international law.  That was the first time I encountered the Foreign Corrupt Practices Act; it was in an international business law class.  After graduating, I heard about TRACE and joined the due diligence team here.

TB:  Wow, that’s a lot of interesting experience.  So now you work on the TRACE Standard team.  TRACE Standard is a due diligence review meant for medium to high risk third parties and it’s offered only to TRACE Member companies.  Could you walk me through the due diligence process for that level of review?

YC:  Ok, well our review process has several parts: first, the online questionnaire, then the business reference, financial reference, their business registration and lastly the CVs of the key employees who work at the company.  Once I’m assigned a file, I will review the online questionnaire that the intermediary has already filled-out and any additional documentation that they’ve provided.  I will then conduct a media search of the company to make sure that there aren’t any negative hits about the company or their key people.

TB:  I imagine that a lot of times the names of employees must be similar to other names out there.  How do you account for that during the media search process?

YC:  Yes, that can be a real problem, especially among Chinese employees who provide the same pinyin [the official phonetic system for transcribing Chinese characters into Latin] of their names, but who in reality have names with different Chinese characters.   It’s something that you learn to recognize over time.

TB:  I see.  And what are you looking for when you’re conducting a review?  What are some things that stick out to you?

YC:  You review the questionnaire and compare all the other documents that have been collected and look for inconsistencies.  For example, when I review a company’s questionnaire I’ll also look at the company website and other media hits.  Sometimes the pieces don’t always add up.  If I find something suspicious, I may have to go back to the company and ask follow-up questions.

At the same time, after reviewing  so many companies you get better at figuring out which ones are false positives.   For example, many Chinese companies put on their official website language that might ring alarm bells for a foreign audience, such as “with the support of the Chinese government” or “in partnership with the Communist party” even though that may not signify that the company has any actual ties to the Chinese government.   It may just be standard language used by the company, similar to language like “with the help of God” that you might find in some more religious countries.  It helps being Chinese to understand the subtle cultural differences in those types of situations. More…