DD1 — IDENTITY / PLAUSIBILITY
Identity, existence, plausibility and initial inconsistencies.
- company
- domain
- registry
- jurisdiction
- representatives
- activity
- age
- presence
- preliminary UBO
- basic sanctions
- PEP
- initial coherence
- contradictions
Due Diligence Methodology
DD1 / DD2 / DD3
The level of due diligence should match the decision and exposure; a registry check is not a transaction-grade conclusion.
Three levels, three different questions
DD2 — AUTHORITY / CAPABILITY / EVIDENCE
Authority, capability and verifiable evidence for the specific transaction.
- authority
- mandate
- power of attorney
- title holder
- buyer/seller authority
- financial capability
- operational capability
- documents
- terminal/storage/product
- funds
- intermediaries
- expanded compliance
- corporate relationships
- adverse media
- litigation
- contradictions
DD3 — DECISIONAL / TRANSACTION / INVESTMENT GRADE
Depth sufficient to support an economic, contractual, investment or transaction decision.
- integrated analysis
- cross-verification
- full compliance
- risks
- sanctions
- SoF
- SoW
- contract structure
- payments
- relevant tax
- intermediaries
- jurisdiction risk
- conditions precedent
- scenarios
- residual risk
- decision conclusion
Escalation rule
Depth should increase with economic exposure, regulatory sensitivity, novelty, complexity, irreversibility and the cost of being wrong. DD1 is a gate, not a final approval.
Evidence chain
- SELLER
- AUTHORITY
- TITLE HOLDER
- PRODUCER / REFINERY
- ORIGIN
- PRODUCT
- TERMINAL / STORAGE
- INSPECTION
- LOGISTICS
- TRANSFER OF TITLE
- PAYMENT
Apply the methodology in stages
If you do not yet know whether the matter justifies a deep review, start with a 1–2 page DD1 assessment and move to DD2 or DD3 only where the evidence supports further work.