Financial Crime World

Business Partner Due Diligence: A Checklist for Responsible Business Practices

As the American Chamber of Commerce in Romania highlights, a responsible business climate is crucial for economic competitiveness. To ensure transparency and integrity in your business partnerships, it’s essential to conduct thorough due diligence on potential partners.

Initial Assessment

Before proceeding with any partnership, it’s crucial to assess whether your potential partner has the necessary resources and capabilities. Ask yourself:

  • Have they obtained necessary permits, sufficient manpower, experience, or other resources to perform services? (Yes/No)
  • In which country will the business partner be performing services?

Document Review and Verification

Obtain and review documentation on key aspects of your potential partner’s business:

  • Obtain documentation on compensation structure
  • Check commercial and financial references, if possible
  • Verify reputation for integrity and ethical business practices through public sources; document any red flags

Clarification and Investigation

If you encounter any red flags during the document review process, clarify them with your potential partner. Also, investigate publicly known governmental relationships with the business partner:

  • Clarify any red flags resulting from the above actions (Yes/No)
  • Investigate publicly known governmental relationships with the business partner
  • Ask about key employees in public office or connected to public officials who may influence business decisions

Anti-Money Laundering (AML) Due Diligence

Verify your potential partner’s compliance with AML regulations and laws:

  • Obtain official documentation on identification attributes
  • Request a declaration concerning Ultimate Beneficial Owners
  • Verify compliance with AML regulations and laws

Clear Understanding of Company Structure and Ownership

Ensure you have a clear understanding of your potential partner’s company structure, owners, financial resources, etc.:

  • Do you have a clear understanding of the company’s structure, owners, financial resources, etc.? (Yes/No)

After completing due diligence:

  1. Keep the questionnaire as proof of documentation
  2. Document any clarification obtained regarding red flags
  3. Add “Anti-Corruption and Compliance Clauses” to the contract
  4. Ensure detailed documentation of services provided before issuing invoices
  5. Perform periodic monitoring of the business partner
  6. Make all payments to the business partner only through the designated bank account

By following this comprehensive checklist, you can ensure that your business partnerships are transparent, accountable, and compliant with anti-corruption laws and regulations.