COUNTERPARTY
DUE DILIGENCE

Verification and review of the legal identity of the proposed counterparty.

• Full legal entity name
• Trading name / commercial name
• Registration number
• Date of incorporation
• Registered jurisdiction
• Registered office
• Current corporate status
• Nature of business
• Available corporate filings
• Official corporate registry information
• Identification of relevant subsidiaries or affiliated entities, where identifiable

Objective

To establish that the entity exists, is identifiable and corresponds to the entity presented in the commercial proposition.

Assessment of the available information concerning ownership and control.

• Shareholding structure
• Ultimate Beneficial Owner (UBO), where publicly identifiable or appropriately documented
• Directors
• Officers
• Authorized representatives
• Parent companies
• Affiliates
• Related entities
• Changes in ownership or management, where relevant and available

Objective

To establish who ultimately owns, controls or represents the entity, and whether the individuals presented to the buyer appear to have the authority they claim.

Where a party claims to act on behalf of a producer, refinery, trading company, supplier or other principal, the representation itself becomes a critical part of the review.

• Identity of the claimed principal
• Identity of the representative
• Claimed relationship with the principal
• Nature and scope of the mandate
• Validity period, where available
• Consistency between the representative's claims and available corporate information
• Supporting authorization or mandate documentation, where provided
• Verification of the relationship through independent channels where reasonably possible

Objective

To distinguish between:

Direct Principal → Authorized Representative → Independent Intermediary → Unverified Claim of Representation

No mandate is treated as verified solely because a document has been presented.

Review of individuals materially involved in the proposed transaction.

• Directors
• Senior management
• Authorized signatories
• Commercial representatives
• Beneficial owners, where identifiable
• Relevant professional / corporate affiliations
• Publicly available professional information

Review focus:

• Identity consistency
• Corporate association
• Role and authority
• Relevant public information
• Potential adverse indicators

Assessment of whether the counterparty's stated business profile is broadly consistent with the proposed transaction.

• Stated business activities
• Trading profile
• Product categories
• Geographic footprint
• Claimed market position
• Historical activity, where independently available
• Relevant counterparties or commercial relationships, where publicly verifiable
• Stated supply capability
• Proposed transaction structure

Objective

To identify material discrepancies between:

What the entity claims to do

and

What available evidence indicates it actually does.

Review of the information supporting the proposed supply opportunity.

• Product name
• Product specification
• Origin
• Indicative quantity
• Availability period
• Loading point
• Terminal / refinery information, where applicable
• Delivery structure
• Proposed Incoterms
• Pricing structure
• Allocation / availability claims
• Supporting commercial documentation

Objective

To determine whether the commercial proposition is internally consistent and sufficiently documented to justify further investigation.

This review does not constitute physical inspection, title verification, inventory certification or confirmation of actual product availability unless separately mandated and independently performed by the appropriate parties.

Review of documents supplied during the engagement.

• Certificates of incorporation
• Corporate extracts
• Licenses
• Certificates
• Company profiles
• Mandates
• Letters of authorization
• Commercial offers
• Product specifications
• Invoices
• Contracts / draft contracts
• Logistics documentation
• Other transaction-related materials

Review focuses on:

• Internal consistency
• Entity names
• Dates
• Registration information
• Signatories
• Corporate details
• Contact information
• Formatting and structural inconsistencies
• Cross-reference against independently available information

Screening of the relevant entities and individuals against applicable publicly available sanctions and restricted-party information.

• Legal entity
• Parent / affiliated entities
• Directors
• Beneficial owners, where identifiable
• Key representatives
• Relevant transaction parties

Potential areas include:

• Sanctions lists
• Restricted-party lists
• Government enforcement information
• Regulatory actions
• Export-control related restrictions

The applicable screening scope depends on the jurisdictions, entities, individuals and transaction structure involved.

Review of credible publicly available information for material adverse indicators.

• Fraud allegations
• Financial crime allegations
• Corruption-related matters
• Sanctions / regulatory issues
• Litigation of material relevance
• Enforcement actions
• Misrepresentation allegations
• Corporate misconduct
• Significant commercial disputes

Findings are distinguished between:

Verified Facts | Official Proceedings | Reported Allegations | Unsubstantiated Claims

No adverse-media finding is treated as established fact solely because it has been reported publicly.

Where reliable public information is available, review may include:

• Material litigation
• Regulatory proceedings
• Government enforcement actions
• Insolvency / bankruptcy indicators
• Corporate disputes
• Relevant judgments or official decisions

The availability and completeness of such information varies significantly by jurisdiction.

Assessment of the consistency of publicly presented contact and digital information.

• Corporate website
• Corporate domain
• Official email domain
• Published telephone information
• Physical address
• Public corporate profiles
• Digital presence
• Consistency between online and corporate information

Particular attention is given to discrepancies between:

Corporate Identity → Domain → Email → Address → Personnel → Commercial Documentation

All material findings are evaluated for potential indicators requiring further investigation.

• Inconsistent corporate information
• Unclear ownership
• Unverifiable representation
• Conflicting company addresses
• Inconsistent domains or email addresses
• Unsupported supply claims
• Unusual documentation
• Material gaps in corporate information
• Sanctions-related indicators
• Significant adverse regulatory information
• Unexplained changes in corporate identity
• Pressure to bypass normal verification procedures

A red flag is an indicator requiring investigation, not automatically proof of misconduct.

A professional due diligence process should identify not only what is known, but also what cannot be established.

• VERIFIED — Information supported by reliable evidence.
• CORROBORATED — Information supported by more than one relevant source.
• UNVERIFIED — Information for which adequate independent evidence has not been identified.
• INCONSISTENT — Information that conflicts with available evidence.
• OUTSTANDING — Information or documentation required for further assessment.

This distinction is fundamental to the final assessment.

Subject to the agreed engagement scope, the client receives a structured Counterparty Due Diligence Report containing:

The due diligence service is a commercial and counterparty risk-screening exercise.

It does not, unless separately contracted and independently performed by appropriately qualified professionals, constitute:

• Legal due diligence
• Audit
• Financial statement verification
• Credit rating
• Banking verification
• Regulatory certification
• Sanctions clearance by a competent authority
• Physical inspection of petroleum products
• Verification of physical inventory
• Title certification
• Refinery confirmation
• Terminal confirmation
• Guarantee of product availability
• Guarantee of transaction performance
• Guarantee of counterparty solvency

Where a matter requires specialist confirmation, the relevant legal, compliance, banking, inspection, logistics or other professional adviser should be engaged.