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Compliance investigation on commercial trade credit

Along with constantly rising business credit risks, enterprises might encounter business partners with improper operating performances under the circumstance of commercial trade credit. However, how to avoid the possible credit risk from cooperation with them in order to reduce brand negative effect and reputation loss caused by compliance risk? and how to evade possible material financial loss and even legal sanction or supervision penalty?


In order to cope with these issues, more and more enterprises commence to construct the compliance risk management organization system and management process catering to their own for the purpose of selecting business partners in more compliant and scrupulous ways. Meantime, the third party’s compliance screening of partners becomes one of the key factors for optimizing management and improving working efficiency in order to respond to the compliance requirements imposed by international enterprises of globalized management on obeying American Foreign Corrupt Practices Act (FCPA), British Bribery Act and other relevant laws and criteria.


Value of compliance due diligence reports


  • Concept Transmission

Transmitting customers’ compliance spirits and concepts to Subject and seeking more stable and healthy business development of both sides.


  • Risk Assessment

Judging Subject’s compliance normalization and existing risk according to on-site investigation and external information.


  • On-site Investigation

Senior due diligence investigators make face-to-face interview of Subject via spot visit.


  • Multi-source Verification

Verifying information via government public sources and Ease Credit’s platform.


Compliance Check Service

Due Diligence Report

Based on Ease Credit’s due diligence methodology of credit customers as well as data resource advantages in the field of risk assessment, due diligence report, integrating commercial risk and compliance risk, provides both basic information (company profile, shareholders and shares, layers of shareholding and background check, etc.), and stressed compliance information (including public records, external investment of Subject, investments and appointments of executives, litigation check, delinquent record check, etc.) of potential commercial risks, and assists enterprises with knowing the compliance risk points of partners in multi-perspectives.


Download of Due Diligence Report Sample

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Significance of due diligence services to business risk reduction


Reducing acquisition and merger risk To better understand the situation of shareholders and assets of enterprises to be acquired and merged can lower acquisition and merger risk for a financer to some extent. Company acquisition is an awfully risky investment activity, so the acquiring enterprise must clearly know Subject’s situation as much as possible in decision making in order to increase feasibility of acquisition and merger and reduce possible risk and loss. In the practice, the acquiring enterprise usually grasps Subject’s situation via due diligence investigation of professionals.


Evading fraud risk and compliance risk or joint liability Along with constantly intensified banking competition, domestic and overseas financial circles have consecutively launched new products in order to quicken business development and expand customers’ market. Meanwhile, commercial banks also have to face with the challenges of various new risks. One of the biggest risks, with which the global financial circle is confronted, is financial fraud. The main risks of banks in the process of operation management include credit risk, market risk and operation risk. Due to a variety of factors, fraud risk-one of the operation risks has always been ignored. In fraud risk, fraud, misappropriation of assets, and violation of laws and company rules and regulations in which internal personnel participate are the most prominent behaviors, e.g. internal personnel falsely reports cash, and steals or makes internal transaction on employees’ accounts; external fraud includes third party fraud, misappropriation of assets, robbery, forgery, issuing rubber check, and hacker invasion. Due diligence investigation can effectively make an active surveillance and prevent diverse fraud risks, strengthen real-time monitoring on banking operation, implement efficient internal and external control, and help establish a complete risk management system.


Discovering or eliminating bribery related litigation risks Commercial bribery is legally defined as operators’ behaviors of bribing enterprises or individuals with belongings or via other means for the purpose of selling or purchasing commodities. Judging from the definition, the subject and motive of commercial bribery differ from those of other bribery behaviors. The subject of commercial bribery refers in particular to the legal person engaged in profit-making operation activities and its motive is to sell or purchase commodities. This characteristic decides enterprises become the first battle line and top priority of commercial bribery prevention.