Сompliance and Due Diligence

In today’s international business community, every self-respecting enterprise must pay considerable attention to its own compliance policy.

Compliance refers to the part of an organization’s management/control system related to compliance risks – risks of non-compliance, non-compliance with laws, regulations, rules and standards of supervisory authorities, industry associations and self-regulatory organizations, codes of conduct and so on. Compliance risks may ultimately manifest themselves in the form of legal or regulatory sanctions, financial or reputational losses as a result of non-compliance with compliance laws, regulations and standards.

Compliance with compliance laws, regulations and standards usually relates to issues such as adherence to appropriate standards of market behavior, management of conflicts of interest, fair treatment of customers, employees, etc.

Compliance risks are potential losses and legal penalties due to non-compliance with laws or regulations.

Consequently, a modern international company must be responsible for doing business not in words, but in deeds. If such a company does not control risk areas, it will eventually suffer losses, and not only financial, but also reputational.

Compliance policy is closely related to the concept of Due Diligence — a procedure of drawing up an objective view of the investment object, which includes an assessment of investment risks, an independent evaluation of the investment object, a comprehensive study of the company’s activities, a comprehensive check of its financial condition and market position. It is usually carried out prior to the purchase of a business, merger (acquisition, agreement), signing a contract or cooperation with the company.

The method consists of collecting and analyzing information, making a decision and the form of its submission regarding the expediency of entering into certain relationships with counterparties. With the help of due diligence, possible risks are assessed (e.g. financial, legal, etc.) When collecting information, any information is taken into account, regardless of its source. The study of the obtained information is done by different specialists separately and then a summary analysis is made. The decision is made by due diligence experts separately from the customer. The form of submission can be either detailed (with separate interim conclusions of specialists, sources of information) or in the form of a brief recommendation on further actions.

In a broader sense, the concept of due diligence is applied as the opposite of negligence or malpractice, and can be used to legally or morally and ethically evaluate an entity’s performance.

The appearance of this website demonstrates the complete absence of compliance policies at M.M.D. Smart enterprises and the complete disregard for Due Diligence procedures on the part of potential investors and/or clients.