Third-party due diligence, defined by who the findings answer to.

1. The three layers, and why the difference is structural

Sort every piece of supplier evidence you hold by one question: who does the person who produced it answer to?

• First party — the seller’s own file. Licence photos, certificates, factory tours on video call, references. Necessary, cheap to ask for, and selected by the party with the most to gain from the deal closing. Treat it as claims to verify, never as verification.
• Second party — the platform’s programmes. Marketplace badges involve real checking, sometimes including on-site inspection. But the seller commissions and pays for them, they describe the storefront’s company rather than the entity on your invoice, and they are snapshots. What the badges verify — and what they cannot.
• Third party — diligence you commission. Public-record reads, litigation and asset searches, on-site verification, done by someone whose fee does not depend on the outcome and who reports sources, dates and limits. This is the only layer whose incentives point at you.

The point is not that first- and second-party evidence is worthless — it is that the layers answer different questions. The seller’s file tells you what they want you to see. The badge tells you the platform saw a company. Third-party diligence tells you what the record actually says, on a date, from a source you could name in a dispute.

2. What a third-party report should contain

Whoever you commission — us or anyone else — hold the report to the same standard: four lanes of evidence, every line carrying its source and query date.

• Registration. The registered Chinese name and Unified Social Credit Code, active status, entity type, and a registered scope that plausibly covers your deal. This lane starts free: validate the code’s structure in your browser, then read the record behind it.
• Litigation and enforcement. Court judgments, enforcement cases, dishonest-debtor and consumption-restriction listings. A supplier with active enforcement against it can be a fine manufacturer and a terrible counterparty to prepay.
• Assets and stability. Registered capital and changes to it, equity pledges, chattel mortgages, abnormal tax-account status. This is the lane that answers the question nobody asks until it is too late: if this goes wrong, is there anything left to pursue?
• Operations. Administrative penalties, abnormal-operation listings, serious-violation lists, licence status. Patterns matter more than single entries.

Two disqualifiers, regardless of who wrote the report: conclusions without sources and dates are opinion, not diligence; and a report that only says reassuring things should make you ask what was not searched. An honest report states its limits — including, for Chinese records, whether the official portal was even serving on the day.

3. When commissioning it is worth the fee

Third-party due diligence is not a virtue; it is a cost that buys certainty. Scale it to the money and the unknowns:

1. Always: the free pass. Before any deposit, ask for the business licence, validate the code’s structure in your browser, and run the scope text through the free in-browser reading. Minutes, nothing uploaded — and it either clears the first questions or produces exactly the questions worth paying to answer.
2. Commission record checks when the deposit is material relative to your business, when the entities in the paperwork do not line up, when all existing evidence came from the seller or a platform, or when the deal was rushed toward payment. Pick the lanes that match the risk — litigation and assets for prepayment risk, registration and operations for identity risk — rather than buying everything reflexively.
3. Skip what does not fit the question. Records answer who the counterparty is and what state it is in. They do not answer whether the factory can hold your tolerances — that is a different instrument.

One boundary worth naming: this page is about diligence on a specific counterparty. If you are evaluating software platforms for managing hundreds of vendors — TPRM systems, data rooms — that is a different purchase with different criteria, and nothing on this page recommends one.

4. From records to eyes: the escalation that records cannot replace

Every lane above reads what is on file. Three questions are structurally beyond the file:

• Whether production happens at the claimed site, at the claimed scale — the registered address and the factory are separate facts.
• Whether the equipment and workforce match the profile shown to you.
• Whether your specific order’s quality can be held — which is inspection, ordered per shipment, not diligence at all.

For the first two, the escalation is a human: an L3 human record check when you need the official portals read and reported with sources, and L4 on-site verification when the factory floor itself is the question. The honest sequencing is free check → targeted records → eyes on site, stopping at the first level that answers your actual question.

Related: the full supplier & vendor due diligence checklist — this page defines the standard; the checklist runs the sequence.

The one-sentence standard

Evidence counts as third-party due diligence when the person who produced it answers to you, names their sources and dates, and states what they could not determine. Everything else — however glossy — is somebody’s marketing.

This page describes an evidence standard. It is not legal advice, and nothing here is a judgement about any particular supplier or provider. Start with the free in-browser check, or commission a China-side read of the official records.