are implemented within the Legal Entity. Furthermore, it is the responsibility of the Managing Director of the legal entity to ensure that the procedure is adhered to at all times. 2.3 Vendor Requirements 2.3.1 Basic Vendor Requirements The following basic requirements apply to all Vendors: A. Vendor Screening: Prior to the formal commencement of a cooperation with a vendor, ECCO will ascertain the vendor’s credit rating, compliance with the ECCO Code of Conduct, the vendor’s general business setup, and its competencies and qualifications, through a pre-screening. The vendor’s continued compliance shall be monitored and evaluated on an ongoing basis by the Legal Entity responsible for selecting the vendor. The Managing Director of the Legal Entity must ensure that adequate screening and monitoring procedures are implemented within the Legal Entity. Indirect Procurement in HQ will assist with establishing such screening and monitoring procedures, if requested. B. Sufficient Credit Rating: ECCO shall avoid using financial unstable and unsolid vendors. The MD of the Legal Entity must therefore implement adequate processes to ensure that the vendor’s credit rating is assessed prior to sourcing from the vendor. Group Finance, at ECCO’s head office, is responsible for relevant credit rating tools and guidance on adequate credit rating processes. C. Code of Conduct Compliance: All vendors must comply with the ECCO Code of Conduct and accept monitoring and auditing of their compliance. In case the vendor does not comply with the ECCO Code of Conduct or will not accept to comply with the ECCO Code of Conduct or accept to undergo monitoring and auditing of compliance, ECCO’s Corporate Conduct needs to be consulted to assess whether the compliance level is sufficient. The final decision whether to use such a vendor shall be made by the Managing Board of ECCO. 2.3.2 Vendor Approval The ECCO purchaser who selects a vendor is responsible for ensuring that the vendor complies with the Basic Vendor Requirements, and that the pre-screening of the vendor has been made. New vendors must be approved in accordance with the COA applicable to the Legal Entity. In cases where the COA does not specify the approval of new vendors, the approval shall be obtained from the Managing Director of the Legal Entity. If an approved vendor no longer complies with or it is uncertain whether the vendor complies with the Basic Vendor Requirements, the vendor cannot be used, unless a renewed screening is made and approval is obtained. 2.3.3 Vendor Contracts The Legal Entity intending to use a vendor is responsible for 46
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