Third Party due Diligence policy

What is a Third Party Due Diligence (3PDD) Policy?

This 3PDD Policy outlines the requirements and processes that must be followed in order for GXO to work with third party business partners. The Policy sets out our commitments to establishing long- term partnerships that are set on solid foundations and protect the business from unnecessary risk, particularly in the areas of bribery and corruption, sanctions and trade restrictions, money-laundering, and human rights.

Why do we need this 3PDD Policy?

GXO is committed to living our values and operating in compliance with all applicable laws, and we intend to work only with third parties who share that commitment. We are further required to have a robust third party due diligence program in place under the laws of many of the jurisdictions in which we operate, including but not limited to the US Foreign Corrupt Practices Act (FCPA) and US Sentencing Guidelines, the UK Bribery Act and the French Sapin ii and Duty of Vigilance Laws.

Who does this Policy impact?

GXO: All GXO employees must ensure that the third parties that we work with comply with our Code of Business Ethics and this associated Third Parties Due Diligence Policy. However, business functions with specific responsibility for onboarding suppliers and customers, and/or the ongoing relationship with the third party, must ensure that the due diligence procedures as required by this policy have been completed.

Business Partners: The Policy takes a risk-based approach for business partners. All third parties must undergo a standard level of due diligence which includes Restricted Party Screening (RPS), while third parties who operate in higher risk jurisdictions or industries (known as “Covered Parties”) will be subject to Enhanced Due Diligence.

What do you need to do?

The key essence of 3PDD is to “know your partner”. This means taking the appropriate steps to document key information about GXO’s existing or prospective business partners and perform certain screening procedures. This process must be completed for all new Third Parties before they can work with GXO. The process needs to be repeated every three years for Covered Parties and every five years for all other Third Parties.

All Third Parties must have at least a “Standard” Due Diligence Assessment completed by the Business Unit. Where a Third Party is identified as a “Covered Party,” an Enhanced Due Diligence Assessment must also be undertaken.

Complying with this Policy

The Ethics & Compliance and Internal Audit teams will monitor compliance with this Policy. Failure to comply with this Policy could have serious legal, reputational, financial and operational consequences for the business as well as disciplinary action for employees up to and including termination.

GXO encourages a culture of openness and transparency where anyone can raise questions or concerns without fear of retaliation. Employees who have questions or concerns related to compliance with this Policy should contact the Ethics & Compliance team at [email protected] or through any of our internal reporting options available at https://ethics.gxo.com.

Enhanced Due Diligence and “Covered Parties”

Customers/Suppliers	Located in geographic regions with a Corruption Perceptions Index (CPI) score of 50 or less which can be found here CPI chart.xlsx (sharepoint.com)
Customs Brokers	Any company/person retained by GXO to provide customs brokerage services on behalf of GXO or its customers.
Charitable Organisation & NGO’s	a registered charity or other not for profit entity which is independent of governmental influence, although may receive government funding.
Freight Forwarding Agents	Any company/person retained by GXO to provide customs freight forwarding services on behalf of GXO or its customers.
Government consultants	That provide regulatory, lobbying or advocacy services and that will communicate with government officials to obtain a licence, regulatory benefit or other approval or advantage from the government for GXO or its customers.
Catering, cleaning or construction companies	Any company or person providing services to GXO in these industries.
Temporary labour agencies	Any company/person retained by GXO to provide temporary labour resources.
Bonded warehouse Partners	Any customer for whom we will be providing or operating a bonded warehouse.
Joint Venture Partners	Any company or person with which GXO enters into a joint venture or similar legal arrangement to perform a joint commercial enterprise.
Transport sub-contractors	Any company/person retained by GXO to provide transportation services.
Free Trade Zone Partners	Any customer for whom we will be providing or operating a free trade zone.
Landlords	Where the landlord was designated by the customer.
Sales Agents	Any company/person retained by GXO as an independent contractor to perform sales and marketing assistance to GXO.
Uniform Suppliers	A company that provides a garment as part of clothing required to be worn during working hours

Once a Covered Party has been identified, the Enhanced Due Diligence Assessment must be initiated. This Enhanced Due Diligence is performed on the 319 system which can be accessed HERE. The 319 System will generate a questionnaire which the Third Party will be required to complete, following which the Third Party will either be approved, declined or further information will be requested. The steps for Standard and Enhanced Due Diligence are outlined in Appendix 3. Third Party’s registered on the 319 System are subject to continual monitoring which will pick up any adverse changes to their record and notify the Ethics and Compliance team. Similarly, if GXO receives adverse information associated with the Third Party, this must be passed on to the Ethics and Compliance team. The Ethics and Compliance team will perform the necessary checks to ensure GXO wishes to continue with the business relationship. In both cases, this may require the original risk rating of the Third Party to be reconsidered and additional due diligence procedures carried out if necessary.