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HMRC internal manual

Excise Due Diligence Condition guidance

Risks: general

When testing a business’s due diligence you should challenge and consider whether the procedure:

  • fully identifies all major trading risks
  • provides options to address and reduce the effect of risks
  • is dynamic enough to identify and react to new risks
  • evaluates risks effectively

You should also establish whether the business has:

  • gathered credible and reliable information to support its risk assessment (oral or documented)
  • reached reasonable conclusions and reacted proportionately to the results of checks
  • reasonably addressed any concerns notified in earlier due diligence correspondence

The business should react positively to risks under the following “FITTED” risk areas, considering results as a whole:

  • Financial health of the business they will be trading with EDDC04020
  • Identity of the business they are trading with EDDC04030      
  • Terms of contract, payment and credit agreements EDDC04040
  • Transport EDDC04050
  • Existence/provenance of goods EDDC04060
  • Deal EDDC04070