Due Diligence and Ongoing Monitoring

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  • 1.  Know your vendor

    This message was posted by a user wishing to remain anonymous
    Posted 10-29-2019 02:15 PM
    This message was posted by a user wishing to remain anonymous

    As part of our due diligence we request articles of incorporation or formation documents to show the legal existencs of the organization.  From time to time, we get push back and organizations are not willing to share these.  Is there something similar to "know your customer" in the vendor world that relates to "know your vendor" that I can point to that I can reference the reason why I need the information and why we can not waive the requirement?


  • 2.  RE: Know your vendor

    This message was posted by a user wishing to remain anonymous
    Posted 10-29-2019 03:42 PM
    This message was posted by a user wishing to remain anonymous

    It seems like a Good Standing certificate from the Secretary of State would work?
    Original Message


  • 3.  RE: Know your vendor

    This message was posted by a user wishing to remain anonymous
    Posted 10-30-2019 09:17 AM
    This message was posted by a user wishing to remain anonymous

    Thoughts:
    1) The larger the vendor, the less likely you'll get partnership agreements, LLC agreements, corporate resolutions etc. No legal department would allow it - except if you're big enough to demand it. (Business leverage tends to be the only way to win this argument.)
    2) If all you want is Articles of Incorporation, business license etc. - many states offer those docs for a fee. And some let you download at no cost.
    3) Might consider the purpose of requiring production of these documents. What risk is being covered? If it is "they're a legal entity" - the Certificate of Good Standing probably should be considered as an adequate substitute.
    Original Message


  • 4.  RE: Know your vendor

    Posted 10-30-2019 08:49 AM
    I request a copy of the vendor's most recent W9 (IRS document October 2018) as proof of identity. Then my KYC team runs; AML, Negative News and OFAC searches based on the IRS data.  Additional materials are requested based on the risk and nature of the vendor's service, but this gets us started and has satisfied the regulators thus far.  In 2020, my plan is to add UBO (ultimate Business Owners) to the search criteria on high risk and critical service providers.
    Original Message


  • 5.  RE: Know your vendor

    Posted 10-31-2019 09:25 AM
    As part of our due diligence the Vendor Management Team request W-9 and statement of good standing from the state. In most cases you can get this with no fee. Like a previous person said some states due charge. If I was going to pay for items I would most likely do it for high risk vendors, or vendors that have several incidents.
    Original Message