The term “criminal due diligence” refers to the process of thorough examination and assessment of potential criminal law risks in conjunction with corporate acquisitions.
Criminal due diligence is an important, yet often underestimated, part of the due diligence process that aims to identify, assess and resolve potential criminal law issues prior to the finalisation of a transaction.
In the case of criminal due diligence, the main focus is on the examination of possible criminal offences that could potentially impact the target company. This includes, for instance, cases of corruption, money laundering, tax evasion, fraud or other criminal offences.
Through a thorough review, these risks can be detected at an early stage in order for appropriate measures to be taken – be it through contract adjustments, redistribution of risks or even the decision to abandon the transaction altogether. The purpose is thus to ensure the legal integrity of the target company and avoid unexpected legal consequences following the finalisation of the transaction.
In our opinion, criminal due diligence can only be carried out properly by criminal law specialists. They are the only ones imbued with the necessary expertise to identify and assess potential criminal law risks and issue recommendations to minimise or avoid these risks.
