Trace International

The online ship vetting provider, Rightship, has recently changed their predictive vetting platform. The existing ship vetting information system (SVIS) has been replaced with Qi.

The new Qi system uses big data and predictive analytics to better assess and rate vessels. In addition to the usual information provided as a part of the vessel’s rating, Qi now displays information relating to the vessels Trace compliance rating (CR). This information does not however form part of the Rightship risk assessment.

What is the Trace Compliance Rating?

A Trace rating is designed to show prospective business partners that a company, vessel or individual, has undergone a due diligence review, analysis and approval process and has been found to have appropriate anti-bribery measures in place. On completion of the vetting, a rating of CR-1, CR-2, CR-3 or CR-3s will be given. This rating will then be shown on the ship information displayed on Rightship’s Qi. The lower the number, the lower the level of bribery risk associated with that company. Details of the Trace – Rightship compliance rating can be found here.

In determining the rating, the following will be amongst the information reviewed:

• Detailed company information, including information on subsidiaries and affiliated entities.
• Business registrations, as applicable.
• Corporate literature or a company description.
• Beneficial ownership (except for shareholders owning less than 5% of publicly-traded companies).
• Identification of directors and key employees.
• Additional ownerships, directorships and employment of all owners, directors and key employees.
• Government employment of owners, directors and key employees.
• Contact information for three business references.
• One financial reference or audited financial statement.
• Local language media searches and litigation searches dating back seven years in a comprehensive international database.
• Denied party screening and negative media searches.
• Evidence of anti-bribery code of conduct and training.

Once the vetting has been completed, a copy of the report can be purchased which can be passed to prospective partners if requested, as a part of their due-diligence checks.                                           

Who Conducts Trace Vetting?

The Trace compliance vetting is conducted by Trace International. Trace International was founded in 2001 by anti-bribery compliance experts to conduct due diligence reviews of commercial intermediaries and to provide anti-bribery training for the global supply chain. Trace International are a multinational company headquartered in the United States.

What Does This Mean for Members?

While participation in the Trace compliance program is voluntary, we have been advised that parties such as owners, charterers, shipping agents and freight forwarders have begun requesting evidence of Trace certification from their business partners.

Legislation enacted by countries to counter bribery and corruption practices has increased in recent years. Such legislation, such as the UK Bribery Act 2010, may require a company to demonstrate they have adequate procedures in place to ensure compliance with the legislation and may impose standards on conduct abroad. As a result, it is not uncommon for charterparties to include an anti-bribery/anti-corruption clause, such as the BIMCO Anti-Corruption Clause for Charter Parties. However, a request by, for example, the charterer that the owner evidences a Trace certification rating obviously goes a step further than what is currently provided for by such clauses. It may be that the charterer, as part of their company’s anti-bribery and anti-corruption policy and procedure, requires their business partners and suppliers to have a Trace certification rating. However, where a party requires Trace certification as a term of the charterparty, and this is agreed, then such requirement should be applicable both ways. This means that if, for example, a charterer requires this of an owner, then the charterer should also be obliged to provide evidence of their Trace certification to the owner.

Should Members wish to undergo the vetting then they must execute a consent form prior to the due-diligence review taking place. Part of this consent will be to have their CR score posted on Rightship’s Qi.  

The current cost of the CR is US$ 2800 for the first year and US$ 1400 for each subsequent year. This fee also includes multilingual anti-bribery training for up to 40 employees.

At present we are unaware whether requests for Trace certification will become more widespread, or whether owners and/or charterers will seek to include a requirement in charterparties for Trace certification to have been carried out.

Additional Information

The following links provide further information on Trace certification, a sample due diligence report and a case study from a customs brokerage.