LSEG Due Diligence
Third-Party Risk Reports

LSEG Due Diligence Third-Party Risk Reports

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The third-party risk landscape
All companies use third-parties to enable them to run their businesses. Whether
they supply them with goods and services, move their products to market
or expand their channels to customers, third-parties can undoubtedly bring
exceptional benefits to any organisation, but at the same time also introduce a hostof potential risks and challenges.
Any organisation associated – even indirectly – with compliance, integrity, ethics
or other breaches could face significant regulatory and reputational damage.
Understanding the full range of risks associated with third-parties is therefore critical.
A 2020 LSEG survey of nearly 1,800 global third-party relationship, risk
management and compliance professionals revealed that organisations typicallyengage with vast numbers of third-parties – the average number of third-party
relationships was recorded as 9,735 – however, 43% of third-parties do notundergo due diligence checks.
This points to clear gaps in formal compliance, and highlights that manyorganisations continue to leave themselves vulnerable to third-party risk.

LSEG Due Diligence Third-Party Risk Reports offer comprehensive
insights into a wide range of potential risks typically associatedwith third-parties. Our reports deliver accurate, clear and detailed
information to help organisations make informed risk decisions
quickly, efficiently and cost-effectively.

LSEG Due Diligence Third-Party Risk Reports

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What do you need to know about your third-parties?
Some of the specific risks that should be considered before engaging with any third-party include:

Sanctions and Exclusions Risk: Can I work with them?

Integrity Risk: Should I work with them?

Understanding which individuals and companies have had restrictions
placed on them by governments and regulators is an essential first stepwhen assessing your third-parties.

Understanding the integrity of your third-parties helps you decide whether
they will be a good partner who matches your own standards and codesof conduct. Risks which are relevant here may include links with organised
crime, bribery and corruption, fraud, money laundering, terrorism financing
or even serious tax non-compliance.

Identity Risk: Are they who they say they are?
Third-parties should be transparent in the provision of details andinformation relating to their ownership, employees, operations, and more.
A lack of transparency could indicate potential issues, such as links topolitically exposed persons (PEPs), political dealings, or corruption.
Third-parties should also be providing source of funds or source of wealth(SoW) information.

ESG Risk: Will they harm themselves, the environment orothers?
Increasingly, businesses are factoring environmental, social andgovernance (ESG) factors into their corporate decision-making. Thismeans that ESG-related risks – such as any form of environmental
degradation, human rights abuses, links to modern slavery, animal welfare
breaches or poor employment practices should be taken into accountwhen conducting due diligence on a third-party.

Operational Risk: Can they do the job?
Organisations should research whether third-parties have an industry
presence; whether they have a reputation for quality product/service
provision; whether they adhere to sound operational practices; andwhether they have business continuity plans in place.

Financial Risk: Will they cause me financial harm?
It is important to establish the financial health and stability of any thirdparty. It is equally important to uncover any financial irregularities that may
exist before beginning a business relationship.

Cyber Risk: Will they look after my data?
Organisations need to ensure that third-parties will not misuse any
intellectual property or confidential information disclosed to them; thatsuch parties will respect and adhere to data privacy regulations; and thatthey will take adequate steps to ensure data security.

LSEG Due Diligence Third-Party Risk Reports

4Due diligence to investigate and rate a range of risks
Our new Third-Party Risk Due Diligence Reports offers accurate, quality insights into these andother potential risks associated with third-parties.

We offer 4 distinct reports: Basic, Core, Advanced and Premium
Each report type caters to different client requirements and perceived levels of risk, but all reports
cover the key risk categories outlined above.
To enable more informed decision-making, risk ratings are prepared, and risks are rated from 1 to10, with ratings determined by a range of factors – including:− The reliability of data sources− The timing of the issue− The centrality of the issue to the business− The severity of the result− Any noted pattern of risk
− Any remediation undertaken

LSEG Due Diligence Third-Party Risk Reports

5Risks revealed at a glance
LSEG Due Diligence
Third-Party Risk Report
P R E M IUM

Empresa farmacêutica premium
Brazil | Health Care Equipment & Services

OVERALLRISK RATING

5EXECUTIVE SUMMARY
The Company has engaged in many governmental dealings, and has been involved in a number of civil proceedings. The Company

Risk rating
1-10 the lower
number higher
the riskstructures which don’t disclose shareholders . Furthermore, reputational intelligence enquiries revealed evidence of questionable
employment practices and service quality.

Risk Table

RISK CATEGORIESHIGHEST RISKLOWEST RISK123

INTEGRITY RISKS

87Government
connections

6

Corruption and bribery

Fraud

Serious and organised
crime

People andentities includedin this review

5--

--

Sanctions andrestrictions--

Health and safety-33

Financial stability

Regulatory enforcement----

Source of wealth

DATA AND CYBER
RISKS

--

--

Business continuity

Which categories
and specific risks
which make up
our views
and ratings.

Transparency

Financial irregularities--

4

IDENTITY RISKS--

Operational quality

--

10

--

Product and service
quality

Governance andmanagement

FINANCIAL RISKS

66--

96
Industry presence

Employment practices

Sales and marketing
practises

8

OPERATIONAL ANDQUALITY RISKS

--

--

57

Human rights

Modern slavery

Animal welfare

Tax non-compliance

Anti-competitivebehaviour

--

--

--

--

Terror and relatedmatters

ENVIRONMENT,SOCIAL AND
GOVERNANCERISKS (ESG)

Environmental
degradation

Money laundering

65--

--

Associationssummary

4

Personal data privacy--

Intellectual property--

Data security

For information about Risk Rating, the Risk Categories, and Peer Benchmarking, see appendix

Peer Benchmarking

Associations Summary

Sources Summary

Total

Integrity

Identity

FinancialESG

farmacêutica premium

Global Compliance Checks

1

Maria Rodriguez

Media

7

Jose Gustavo

Website1

Gabriela Pareira

Litigation

2

Comercio de Aedicamentos

Reputation

2

EIREVI
Peers
SubjectCase ID
Sample4567

Campinas Sarl
Data andcyber

Operationaland quality

Report15, 20202020Reportgenerated
generatedon
onSep.
5 Nov
Updated Nov.
15 Sep2020
Updated5, 2020

CONFIDENTIAL

FooterInformation about the reportand how to contact us

1Site Visit

1Sourcessummary
Sources lookedat (instructionsper scope)

LSEG Due Diligence Third-Party Risk Reports

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Tailored reports to suit your needs

Basic Report

Core Report

Our Basic Report covers a World-Check search of the primary subject as well as a
key individual and includes thorough media-based research in both English and thelanguage of the subject, into all the questions we cover. This report is aimed at aquick review of low risk third-parties.

Our Core Report includes all the research of the Basic Report plus additional
searches against other controlling individuals. The report is aimed at providing adesktop review of medium risk third-parties, where it is important to gather official
documentation.

Information about all the other client questions is found using media research inboth English and the local language targeting each of the risk areas with specificsearch strings.

About the Core level report− Compliance information is gathered using a global compliance check on thesubject plus an additional two principal individuals− Information about identity is gathered from corporate registry records about thesubject company and media sources− Information about integrity is gathered from media research in both English andthe local language as well as litigation, regulatory and law enforcement searcheson the subject company and the two principal individuals.
− Information about the financial health of the subject is gathered from bankruptcy
checks as well as statutory accounts found in the corporate registry filings.
Media research may also provide further financial information− Information about ESG risks is found using media searches as well as a summaryof NGO actions from a dedicated ESG data source− Information about cyber risks is found using media searches for breaches as wellas a security rating from a cyber security data source− Information about operational performance and risks is found using
media searches

LSEG Due Diligence Third-Party Risk Reports

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Advanced Report
Our Advanced Report includes all the research of the Core Report plus a review of a greater number ofassociated people and companies. It also extends the review into credit, ESG and cyber risks and is aimed atmoderate to high risk third-parties who operate in locations where sources of public information are readily
available.
About the Advanced level report− Compliance information is gathered using a global compliance check on the subject plus an additional fivecontrolling individuals and associated entities, giving a clear picture of the overall controlling interests− Information about identity is gathered from media sources plus corporate registry records about the subject
company, going up to three levels deep in the shareholding or finding all the owners individually holding
greater than 25% of the shares.
− Information about integrity is gathered from media research in both English and the local language as well as
litigation, regulatory and law enforcement searches on the subject company and the five principal individuals.
− Information about the financial health of the subject is gathered from searches against a credit ratings agency
plus bankruptcy checks as well as statutory accounts found in the corporate registry filings. Media research
may also provide further financial information.
− Information about ESG risks is found using media searches as well as a detailed summary of NGO actions andissues from a dedicated ESG data source− Information about cyber risks is found using media searches for breaches as well as a security rating and keymetrics behind the rating from a cyber security data source− Information about operational performance and risks is found using media searches

LSEG Due Diligence Third-Party Risk Reports

8Premium Report
Our Premium Report includes all the research of the Advanced Report plus on the ground reputational
intelligence. Our Premium Report is aimed at high risk third-parties who operate in locations where sources ofpublic information are not readily available.
About the Premium level report:− Compliance information is gathered using a global compliance check on the subject plus an additional fivecontrolling individuals and associated entities, giving a clear picture of the overall controlling interests− Information about identity is gathered from media sources plus corporate registry records about the subject
company, going up to three levels deep in the shareholding or finding all the owners individually holding
greater than 25% of the shares. Reputational intelligence enquiries can also inform the understanding of theownership where official documentation is not enough.
− Information about integrity is gathered from media research in both English and the local language as well as
litigation, regulatory and law enforcement searches on the subject company and the five principal individuals.
Reputational intelligence enquiries are also used to understand integrity issues which had not been reported
in the media, or to help clarify any information found.
− Information about the financial health of the subject is gathered from searches against a credit ratings agency
plus bankruptcy checks as well as statutory accounts found in the corporate registry filings. Media researchand direct enquiries may also provide further financial information.
− Information about ESG risks is found using media searches as well as a detailed summary of NGO actions andissues from a dedicated ESG data source− Information about cyber risks is found using media searches for breaches as well as a security rating and key
metrics behind the rating from a cyber security data source− Information about operational performance and risks is found using media searches and often Advanced by
the responses to reputational enquiries.
All reports include a review of client-provided documents, if required.
All media searches are completed in English, with the option of searches in additional local languages.

LSEG Due Diligence Third-Party Risk Reports

Why LSEG Due Diligence Third-Party
Risk Reports?
Our Third-Party Risk Due Diligence reports deliver detailed analysis and accurate risk
ratings, so that organisations can make informed decisions and engage third-parties
with confidence:
Quality, holistic reports: our reports deliver accurate information andquality insights into a wide range of risks associated with third-parties
Quick turnaround: our basic reports can be turned around within 2
business days, and even our most detailed reports are produced quickly
and efficiently
Cost-effectiveness: reports are competitively priced and offer a costeffective due diligence solution
Global coverage: we offer global coverage with the ability to conduct
media research in local languages
Deep domain expertise from a trusted supplier: LSEG has over two
decades of delivering invaluable due diligence support to the global
financial and corporate sectors

9LDA3266939/9-23