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Due Diligence Background Reports FAQs 
Carrying out due diligence research and compiling KYC background reports on individuals and/or companies is one of our core business areas. It is an area that frequently prompts questions from clients and potential clients on a variety of issues. Peter Lilley answers some of the most commonly posed questions.
What are the advantages of carrying out due diligence enquiries?
Due diligence enquiries are essential in today’s market for a variety of important reasons. At a very basic level it ensures that the person or company that you are dealing with (or intend to deal with) actually exists – or are who they say they are. This may seem a very fundamental point, but we do on quite a few occasions find that the person/company under examination is a fiction. Secondly – and related to the first point – even if the person/company does exist, it is foolish to take what they say at face value without verifying it. Again we have many examples where the subject of our research is a known criminal, fraudster and/or money launderer. Without due diligence, our client runs the risk (if not the certainty) of losing money, their good reputation – or both. Thirdly, due diligence enquiries are critical to prevent money laundering and to ensure that "Know Your Customer" regulations are complied with. Moreover our due diligence enquiries seek to show that the subjects are "clean" – that they have no connections with terrorism, organized crime or money laundering activities. Thus all of our due diligence work is focused to ensure that our client does not become involved with any individuals or companies which could cause reputational risks, compliance problems and/or financial loss.
In what geographical areas does Proximal Consulting carry out due diligence enquiries?
In simple terms, we are able to carry out research on a worldwide basis. Whilst we have carried out thousands of enquiries in Russia, the former Soviet Union and Eastern Europe since 1999, our activities are by no means exclusively focused there. For example, we carry out a similar number of enquiries in mainstream European locations, the United States and South America. Additionally we are very active in the Far East, Scandinavia, Australasia and Africa. We have a very good combination of technological resources and a global network of associates.
At what stage of a customer relationship do your clients ask you to carry out due diligence enquiries?
Normally we carry out our research before our client establishes a relationship with the subject of our research. However it is also perfectly possible to carry out research at any stage of the customer relationship. For example, our client may have had a relationship with Person Y for a number of years, but something may have occurred which gives rise to suspicions or doubts, and thus a due diligence enquiry would be a prudent safeguard.
What kinds of enquiries are made as part of a due diligence report?
Whilst each report is different – and it must be borne in mind that the types of information that can be obtained in each country varies – there are various fundamental enquiries which are made. For commercial reasons it would be foolish for me to outline exactly what we do, how we do it or who we use but I believe that our activities are very complete and competent. Most importantly I know, from the facts that we have discovered in relation to individuals and companies, that our methodology is very effective.
Is the due diligence work that you do "invisible" to the subject of the research?
Unless our client tells us otherwise, everything that we do should be totally invisible to the subject of our enquiries. We believe that because of our extensive experience in this area we are able to obtain detailed information but still be extremely discrete in our activities. Moreover we are crucially aware of not doing anything that would be an embarrassment to our client.
What are the charges for a due diligence report?
We work on a fixed price basis – in this way our client knows exactly what the charges are. Dependent on our client’s exact requirements then the cost is from £750. I have the view – based both on the quality of our reports and what our competitors charge! – that this represents very good value.
What about confidentiality?
Client confidentiality is paramount – we never divulge (under any circumstances) the names of our clients or the type of work we carry out for them. All information provided to us by our clients is treated with the utmost discretion. It is our aim to establish a partnership with our clients so that we can be trusted completely to assist them in the most delicate and sensitive matters. Since 1999 we have established and maintained numerous client relationships where this is the case.
Have you seen any examples of what happens when due diligence enquiries have not been carried out?
I think that this is a very good point – and a suitable one to end on. Over the years I have been involved in hundreds – if not thousands – of fraud and money laundering investigations. This is where money has been lost, or reputations affected. In a high proportion of these cases no due diligence was carried out at the beginning of the relationship. If due diligence had been carried out in a proper manner then it is certain that many of the problems which subsequently occurred would have been prevented. Just as importantly, the overall costs involved would have been much lower. One of my favourite sayings in this respect is that "An ounce of prevention is worth a pound of cure" – or in metric terms "A gram of prevention is worth a kilo of cure!"
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