Financial Crime World

Subcontractors and Responsible Persons Under Scrutiny

In today’s business landscape, ensuring transparency and accountability is crucial for companies to maintain a strong reputation and avoid potential risks. One way to achieve this is by conducting thorough due diligence checks on both existing and potential business partners, as well as their subcontractors and responsible individuals.

Investigation Requirements

A comprehensive review of various aspects is necessary, including:

  • Head Office: A thorough examination of the company’s headquarters
  • Red Flags: Identifying any warning signs or suspicious activities
  • Negative Reporting in International Press: Reviewing news articles and reports to identify potential issues
  • Sanctions Lists: Verifying if the company or individuals involved are on any sanctions lists
  • PEP Lists (Politically Exposed Persons): Checking for Politically Exposed Persons involved with the company
  • Results and Balance Sheets: Examining financial statements and performance records
  • Assets and Liabilities, Budgets: Reviewing the company’s financial situation
  • Work Processes: Assessing the company’s operational procedures
  • Qualification of Employees: Verifying the qualifications and expertise of employees
  • Company Image: Evaluating the company’s reputation and public image
  • Quality Control: Assessing the company’s quality control measures
  • Board Members, Shareholders, Beneficiaries: Identifying key individuals involved with the company

Seeking Expert Help

Due to the complexity of these requirements, it is highly advisable for companies to seek assistance from trained staff or external advisors, including:

  • Tax consultants
  • Auditors
  • Lawyers
  • Technical experts
  • Management consultants

These professionals can provide a detailed overview of the subject matter and help ensure that all necessary checks are performed.

The Importance of Technology

A manual due diligence process can quickly become problematic if a company has insufficient employee resources or cannot access relevant and up-to-date information. To overcome these challenges, companies should utilize appropriate technology to:

  • Automate checks
  • Support due diligence investigations
  • Ensure continuous risk monitoring

Due Diligence Software

Our third-party due diligence software is designed to execute due diligence with the sole goal of producing valuable Due Diligence reports and business analyses for our clients. Our confidential, impartial viewpoint provides a sound and comprehensive assessment of potential partners and their subcontractors.

Forms of Due Diligence Check

Our software performs various forms of due diligence checks, including:

  • Economic, Technical, and Organizational Due Diligence Checks: A thorough examination of the company’s financial, technical, and organizational situation
  • Checks of Managers and Staff: Verifying the qualifications and expertise of key individuals involved with the company
  • Legal and Tax Checks: Reviewing the company’s legal and tax compliance
  • Operational Due Diligence (ODD): Assessing the risks and potential appreciation of the target object
  • Market Due Diligence: Exploring the current and future market position of the targeted company

The Due Diligence Process

The due diligence process typically consists of three main steps:

  1. Identification: Collecting information directly from the future partner or via a compliance questionnaire.
  2. Sanctions List Check: Cross-checking with global sanctions lists, including lists of prosecuted individuals and companies, as well as Politically Exposed Persons (PEPs).
  3. Risk Assessment: Conducting a risk-based approach based on the results of the investigations.

Due Diligence Report

The due diligence report provides a detailed summary of the checks and records the process involved. The scope of the report varies from case to case, but it serves as evidence of compliance with due diligence requirements.

By understanding the importance of due diligence and utilizing the right tools and expertise, companies can protect their interests, safeguard their value chain, and comply with relevant laws and regulations.