Due diligence · Practical guide
What proportionate cross-border due diligence should answer
Cross-border due diligence examines who controls a counterparty, whether their account is supported by independent records, and which unresolved risks could change a decision. Its depth should match the transaction, appointment or relationship being considered.
What should the enquiry establish?
Start with the decision rather than a standard database package. An investment, senior appointment and new supplier relationship can raise different questions. Identify the people and entities involved, the jurisdictions that matter and the facts that would cause you to pause or change terms.
- Identity, corporate history, ownership and control
- Relevant litigation, regulatory records and sanctions exposure
- Reputation and inconsistencies between statements and records
- Gaps that require local research or clarification
How do you assess an apparent red flag?
A matching name is a lead, not a verified identity. Check identifiers, dates, source quality and the status of the underlying record. An allegation, a pending matter and a concluded finding need different treatment.
Preserve the record’s date and jurisdiction. Registers differ in what they disclose and how often they update. Missing information may reflect a disclosure limit rather than concealment.
What should the report contain?
The report should answer the original questions, identify sources and separate verified facts, assessment and outstanding issues. It should explain limitations and where additional work could materially improve the decision.
Before commissioning, provide the entities and people under review, known identifiers, relevant countries, deadline and purpose. Avoid sending unnecessary personal information; agree a suitable way to exchange sensitive documents with the team.