Regulations that typically affect third-party risk management programs

You should consult legal and compliance experts to determine the specific regulatory landscape relevant to your third-party relationships. Here's a list of regulations that are typically considered when assessing third-party risk:

Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations

These regulations aim to prevent money laundering, terrorist financing, and other illicit financial activities. They require companies to verify the identity of their third parties, assess their sources of funds, and ensure compliance with applicable AML and CTF laws.

Anti-Corruption and Bribery laws

Regulations such as the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act impose strict requirements on companies to prevent bribery and corruption. Due diligence helps identify any potential risks related to bribery or corruption in the third party's operations and relationships.

Data Protection and Privacy regulations

With the increasing focus on data protection and privacy, regulations like the European Union's General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) require companies to safeguard personal data. Due diligence includes assessing a third party's data protection and privacy practices to ensure compliance with these regulations.

Sanctions and Embargoes

Governments impose sanctions and embargoes on certain countries, individuals, or entities to restrict trade and prevent support for illegal activities. Companies need to ensure that their third parties aren’t subject to any sanctions or embargoes and aren’t engaged in activities that violate these restrictions.

Financial Regulations

Depending on the industry, companies might need to consider financial regulations such as the Sarbanes-Oxley Act (SOX) for publicly traded companies or sector-specific regulations like the Dodd-Frank Act for financial institutions. These regulations often require companies to assess the financial stability, reporting accuracy, and internal controls of their third parties.

Labor and Employment Laws

Companies need to ensure that their third parties comply with labor and employment laws, including regulations related to minimum wage, working hours, health and safety, and equal employment opportunities. This helps mitigate risks associated with labor violations and potential reputational harm.

Environmental Regulations

Companies might need to evaluate a third party's compliance with environmental regulations, particularly if the third party engages in activities that have an environmental impact. This includes assessing their environmental practices, waste management, pollution control measures, and adherence to sustainability standards.