Checking a counterparty before committing

The problem

Before signing with a supplier, taking a stake in a company or accepting a new client, you need to know who you are dealing with. The work is well marked out: identify the structure, trace the beneficial owners, check the mandates, look for ties that were not declared.

The difficulty is not finding the documents, it is holding them together. A registration extract, three legal notices, two org charts received by email and a press search quickly produce a file nobody rereads.

And that file has to hold over time. A decision challenged two years later means being able to show what you knew at the moment of deciding, and on what basis.

What the map brings

Tracing a chain of control. A company held by another, itself held by a foreign holding, becomes clear at a glance when the links follow the direction of ownership. The beneficial owner reads off the end of the chain.

Spotting overlaps. Two counterparties sharing an address, a director or a phone number will not show up in two separate files. On a common map it jumps out.

Documenting the decision. Each entity carries its source and its date of consultation. The file exported at closure shows the state of knowledge at the moment of commitment, which is precisely what an audit asks for.

Picking it up at the next review. A counterparty gets rechecked periodically. Reopening last year’s map and adding only what changed costs far less than starting from scratch.

A typical session

You start from the legal name and the registration number of the prospect. You put the company down, and note the sector, the country and the date of the extract you consulted.

You add the registered officers, one “director” link per person, with the date of appointment. One of them appears in another company in your portfolio: you draw the link, and you have just found a proximity that was not declared.

You trace the ownership upward. The parent company is foreign, so you put it down and note its country and its local identifier. The link carries the percentage held when you have it.

You put the registered office down as an entity in its own right. A search on the address returns four other structures. You put them down without concluding, naming the links “located at”, because a shared address can be a mundane registered-office service as much as a signal.

At closure, you export the dated file into the third-party folder, and the image into the summary note.

What it does not do

The tool queries no register on your behalf and connects to no sanctions database. It replaces neither your internal procedure nor the regulatory checks that fall to you. It is a support for reasoning and traceability, not a screening service.

Nor does it judge. A shared address, a common director or a recently created company are only facts. The qualification remains your work, which is why the name of the link matters as much as the link.

The sensitive point

A counterparty check processes personal data about directors and shareholders. Three precautions cover the essentials: write down the legal basis before starting, collect only what serves the decision, and set a retention period.

The fact that the file stays on the analyst’s machine, without passing through a third-party server, simplifies the impact assessment. The guide on personal data sets out the points to formalise.