Investigative Services for International Business: Opportunities and Challenges by Dr. Carlo Gallo, Enquirisk
“Finding out the names of the company principals will not be enough.”
Investigative services play a key role in
enabling sound and compliant international business. Despite economic and geopolitical headwinds, international business is still big business. Over 80 percent of the world’s GDP is produced outside of the United States (US) and, in 2022, the US exported more than $2 trillion worth of goods and $930 billion of services. International business often involves dealing with very opaque jurisdictions. In those cases, the real beneficiaries of local business entities are often hidden. They may include corrupt state officials, defense-sector entities, US-sanctioned entities, or even organized criminal groups. Moreover, foreign counterparties may rely, directly or indirectly, on illegal or unethical labor or environmental practices.
12 Working PI | Summer 2023
As part of legal compliance programs, fraud detection and brand protection, US companies must run scrupulous checks on the foreign entities they want to acquire, form joint-ventures with, onboard customers, or engage as suppliers and distributors. Certain lines of business, industries, locations or types of third-party relationships will be associated with higher risks. In those situations, investigative skills are required to perform the necessary enhanced due diligence. At the same time, as US regulators expect companies to exercise more scrutiny over foreign third-parties, doing so is becoming more difficult due to the rise of authoritarianism globally. Autocratic regimes are tightening up control over the information space, making investigative reporting more difficult.
Journalists are increasingly targeted by police persecution or even extra-judicial violence. Moreover, sharpening geopol it ica l compet it ion ca n place US businesses abroad in the crosshairs of local governments. As private investigative services become more important due to growing regulatory requirements, they also face rising challenges in many opaque and repressive jurisdictions. A Growing Regulatory Burden The US and G7 sanctions enacted in response to Russia’s invasion of Ukraine in February 2022 are some of the most extensive issues. They banned businesses from dealing with hundreds of Russian individuals and entities in specific economic sectors, and with specifically designated administra-