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Business Risk Evaluation

Sometimes enhanced due diligence is required not in order to fulfill compliance-related requirements but in order to determine the risk of engaging in a partnership or business relationship with a third-party entity especially one that does business in high-risk jurisdictions.

Consider the reputational risk of having a respected business engage extensively in a business relationship with a company in sub-Saharan Africa, whose beneficial owners are members of the political establishment or engaged in illicit activity such as trading in conflict minerals. Asides from the reputational damage suffered in the eyes of the public there is always the risk of substantial legal consequences.

Other than business risk evaluation of potential relationships for the sake of reputation and legal coverage alone, there is also the need to evaluate risk to prevent being duped or led into fraudulent activity unknowingly. Consider the case of a client who nearly offered the distributorship rights of their oil and gas technology in West Africa to a syndicate known to be extensively involved in fraud.

There are also instances where a supplier offers credit facilities and merchandise to supposedly reputable firms only for them to disappear with millions of dollars worth of products due to a failure to conduct extensive due diligence on such firms and their owners as well as antecedents.

Business risk evaluation should be a real concern to any firm looking to make forays into the African continent, partners need to be assessed in order for businesses to protect themselves from undesirable consequences. To discuss how the Enhanced Due Diligence services offered by Titarios can be of assistance to your business risk evaluation aims, kindly Contact Us today.