Due Diligence Policy Template for Netherlands

A Due Diligence Policy sets out the steps your organization takes to assess risks and verify facts before making important business decisions. In Dutch business practice, it's a crucial framework that guides how companies investigate potential partners, investments, or acquisitions to avoid legal and financial pitfalls.

Following Dutch corporate governance rules and the EU's risk management guidelines, these policies typically cover areas like financial checks, legal compliance, and integrity screening. They help protect companies from fraud, money laundering, and reputation damage while ensuring compliance with the Dutch Corporate Governance Code and Anti-Money Laundering laws. Good policies make it clear who needs to do what, when, and how to document their findings.

Your organization needs a Due Diligence Policy when entering significant business relationships or transactions in the Netherlands. This includes mergers and acquisitions, major investments, selecting key suppliers, or forming partnerships with other companies. It's especially crucial when dealing with international partners or complex financial arrangements.

The policy becomes essential before signing binding agreements, when exploring new markets, or if your company falls under Dutch financial regulations requiring enhanced risk screening. Dutch companies often activate their due diligence processes during property purchases, when onboarding high-value clients, or when investing in businesses where environmental permits or licenses are involved. This systematic approach helps prevent costly mistakes and ensures regulatory compliance.

• Financial Due Diligence Policy: Focuses on investigating financial records, performance metrics, and tax compliance, commonly used by Dutch banks and investment firms
• Legal Due Diligence Policy: Covers corporate structure, contracts, and regulatory compliance checks, essential for mergers and acquisitions
• ESG Due Diligence Policy: Examines environmental impact, social responsibility, and governance practices, increasingly important under Dutch sustainability regulations
• Operational Due Diligence Policy: Evaluates business processes, IT systems, and operational risks, vital for strategic partnerships
• Anti-Money Laundering Due Diligence Policy: Specifically designed to meet Dutch financial supervision requirements and prevent financial crimes

• Legal Departments: Draft and maintain Due Diligence Policies, ensuring they align with Dutch corporate law and EU regulations
• Board of Directors: Approve the policy and oversee its implementation across the organization
• Compliance Officers: Manage day-to-day policy execution and coordinate due diligence investigations
• External Advisors: Specialist lawyers, accountants, and consultants who support specific due diligence processes
• Department Heads: Apply the policy requirements when entering business relationships or major transactions
• Risk Management Teams: Monitor policy effectiveness and recommend updates based on emerging risks

• Risk Assessment: Map your organization's specific risk areas and compliance requirements under Dutch law
• Scope Definition: Determine which business activities and transactions will trigger due diligence processes
• Industry Standards: Review sector-specific guidelines and Dutch regulatory requirements for your industry
• Internal Procedures: Document your current verification processes and identify gaps to address
• Roles Assignment: Define who will conduct due diligence checks and their responsibilities
• Documentation Rules: Establish clear guidelines for recording and storing due diligence findings
• Review Mechanism: Create procedures for periodic policy updates and effectiveness assessment

• Policy Purpose: Clear statement of objectives and scope aligned with Dutch corporate governance requirements
• Risk Categories: Detailed breakdown of financial, legal, operational, and compliance risks to be assessed
• Investigation Procedures: Step-by-step protocols for conducting due diligence reviews
• Data Protection Measures: Compliance with GDPR and Dutch privacy laws during information gathering
• Reporting Requirements: Standards for documenting findings and maintaining audit trails
• Escalation Protocol: Clear procedures for handling red flags and serious issues
• Review Mechanism: Process for regular policy updates and effectiveness assessment

A Due Diligence Policy differs significantly from a Due Diligence Checklist in both scope and function. While they work together, each serves a distinct purpose in the Dutch business environment.

• Framework vs. Tool: The policy establishes your organization's overall approach and requirements for conducting due diligence, while the checklist is a practical tool used to execute specific investigations
• Permanence: The policy is a standing document that guides all due diligence activities, whereas checklists are typically transaction-specific and temporary
• Legal Weight: The policy carries more formal authority within your organization and helps demonstrate compliance with Dutch corporate governance requirements
• Content Focus: Policies outline procedures, responsibilities, and standards, while checklists provide specific items to verify during actual due diligence reviews