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HMRC internal manual

Excise Due Diligence Condition guidance

HM Revenue & Customs
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The due diligence condition: HMRC’s expectations of businesses carrying out due diligence

Due diligence and risk assessment, if carried out properly, should enable the registered person to make a judgement on the integrity of his supply chain and the suppliers, customers and goods within in. Checks undertaken purely in relation to the registered person’s immediate suppliers and customers will not necessarily be sufficient to achieve this. As such, we would expect the registered person to consider where appropriate the wider supply chain they are involved in.

Where a registered person simply made enquiries without taking any further appropriate action, then this would not be acceptable. Instead they must take appropriate action based on the results of their enquiries. Such businesses should be able to provide good reasons as to why they are trading in a particular supply chain and demonstrate a reasonable knowledge of the markets they are entering.