Cross-border deals, global footprints, and shifting supply chains make international capabilities a top of mind consideration when selecting a due diligence provider. This presents a different challenge from its domestic counterpart. Effective international due diligence requires a specialized tool kit. When evaluating a due diligence provider’s ability to achieve your international investigative goals, look for following five capabilities:
While domestic due diligence is rooted in open-source information and public records, international due diligence often requires investigative teams to delve deeper than their desktops. Common international informational challenges include public records access, limited or state-controlled media, and plain old “tough questions.” Discreetly obtaining actionable insights requires a deep and experienced network of trusted local investigators.
Subject Matter Expertise (SME)
Though machine learning and AI have contributed significantly to the due diligence industry, crucial context continues to get “lost in translation.” The human touch is still needed. Analysts who are well-versed in region specific socio-political issues and regulatory landscapes are crucial. Language-enabled analysts ensure translated information is both accurate and context-aware. In addition to directing international investigations, subject matter experts should be available to walk clients through research findings.
International due diligence is not a one size fits all process; it must take into account variables including location, industry, and risk tolerance. Government agencies including the Treasury Department’s Office of Foreign Assets Control (OFAC) and Department of Justice (DOJ) recommend taking a risk-based approach to due diligence. Ensuring that you have due diligence partners who can help you build and maintain a credible and defensible program is paramount.
While certain jurisdictions and subjects warrant deep dive due diligence from the start, a more streamlined approach may suffice for other projects. To accommodate the diverse use cases due diligence clients commonly encounter when conducting business internationally, ask your due diligence provider if they are able to scale projects from instant watchlist screening all the way to an analyst-driven report incorporating interviews with local sources.
Unfamiliar languages, regulations, and cultures contribute to the complexity of conducting business abroad. While international investigative proficiency is imperative, so is finding a trusted advisor to serve as a guide from initial project inquiries through post-delivery discussions. A proactive international due diligence provider keeps clients informed of red flag findings and allows deal-specific issues to be dealt with as they emerge.