Criminal Due Diligence

Discover, prevent and neutralize criminal risks in order to protect companies and their employees

When important corporate and financial operations such as M&A, equity acquisitions and new branch opening take place, the new management team should evaluate their exposition to elements of criminal risks. Criminal compliance procedures ensure that all kinds of criminal liability, inherited or otherwise, are avoided during and after these operations.

Criminal and penalty procedures are expensive in terms of reputation, money and time, thereby burdening not only the individuals affected but also the company itself.

Liability risks under civil law or tax law from criminal acts committed in the past may be covered to some extent by a labor and tax due diligence. However, it is more difficult to assess the consequences resulting from possible criminal proceedings such as fines and business restrictions for the company, imprisonment for individuals and damage to the reputation of the business.

Legal proceedings against existing management or sole owners by social funds or tax authorities for criminal misconduct, unfaithful accounting, unpaid taxes or social contributions with relevant penalties and interest bearing subsequent payment rights, can lead to a significant decrease of the worth of the Target and sometimes of the whole organisation.

Similarly, undiscovered bribery cases which can turn the transaction into a losing bargain causing reputational damages, defence expenditures, compensation claims by business partners as well as administrative skimming of excess profit and organizational fines.

The purpose of the criminal due diligence is to discover risk factors that are peculiar for the type of industry, markets served sale channels used by the target.
Moreover, analysis of business decisions where facilitation payments or bribes are expected, payments for sales agents, high value corporate entertainment.

Our approach

We pursue an integrated approach which takes into consideration relevant aspects from other fields of law (e.g. with data protection, corporate and employment law) and is structured in four major phases.

• Mapping: On the basis of an ad hoc check-list, we select all the necessary documents. This phase may include interviews with the "key-players".
• Evaluation: By reviewing the results of the Phase I analysis, we identify any grey areas or gaps that need to be filled and estimate the penal risk.
• Planning: Development of an intervention plan aimed at filling all the gaps and avoiding the transmission or creation of penal risks within the new company.
  This is accomplished by taking all the necessary precautions to protect the company and ensure a fully operational future.
• Implementation: Execution of the plan developed during the previous phases.

Our expertise

Our experts have extensive experience dealing with economic criminal law and corporate liability, providing assistance to corporations, banks and financial institutions.
The main areas of practice include: banking law, credit and financial markets criminal law, crimes against the Public Administration, corporate criminal liability based on the D.Lgs. 231/01, health and safety in the workplace, privacy protection and environmental criminal law.

In collaboration with Studio Legale Briola
Via Podgora, 11 - 20122 Milano
T: +39 025501 7406