The risks associated with identifying a business’s ultimate beneficial owner (UBO) have become more complex now that sanctions are being used for untraditional purposes. The business intelligence sector helps firms maintain compliance with sanctions and the Federal Corrupt Practices Act (FCPA). To avoid violating sanctions or the FCPA, these analysts are tasked with identifying and researching companies’ decision-makers (or UBOs) on behalf of their clients. Businesses should consider risks beyond sanctions or the FCPA to avoid fines or other penalties, as emerging and more abstract risks pose a new threat.
Sanctions and the FCPA
Sanctions are regulated by the U.S. Treasury Department, specifically the Office of Foreign Assets Control (OFAC). On its website, OFAC states that sanctions are used “to accomplish foreign policy and national security goals.” For example, in December 2014, sanctions were imposed on Venezuelan security forces due to violence against student protestors. To avoid fines, business intelligence investigators are tasked with ensuring a client’s business and business partners and its principals (the UBOs of a company) are not sanctioned. However, in 2024, U.S.-based entities were fined around $48 million due to conducting business with a sanctioned entity, which can be a person, company or country.
Besides sanctions, firms can face financial penalties if they violate the FCPA. The FCPA of 1977 seeks to prevent U.S.-based companies from engaging in corruption or using financial incentives paid to foreign government officials to benefit the company’s business operations. The Department of Justice and the Securities and Exchange Commission (SEC), which oversee FCPA enforcement, received nearly $1.3 billion in fines in 2024. While the White House is not enforcing the FCPA at this time, it can be enforced against companies in the future due to the five-year statute of limitations. While harder to identify than sanctions busting, investigators leverage open- and human-source intelligence to evaluate a business’s operations to ensure compliance with the FCPA.
Emerging Risks in Brazil and India
Currently, there are heightened geopolitical risks in multiple jurisdictions, such as Brazil and India. Therefore, solely conducting sanctions and FCPA research is insufficient, and greater analysis of UBOs is needed.
In Brazil, a Supreme Federal Court justice was sanctioned in July. In August, tariffs on Brazilian imports followed due to the White House’s opposition to charges against President Jair Bolsonaro. As U.S.-based companies do business in Brazil, they will likely want to assess risks associated with companies or their UBOs who support the charges against the former president. While this is not a typical risk for business, it is a reality of the present moment. As business intelligence firms research Brazil-based entities, assessing political views should be a part of their overall analysis. Businesses may be associated with greater risk if the company or its UBOs have public opinions that directly contradict the views of the White House.
India, too, is facing U.S. tariffs due to its government’s decision to continue purchasing Russian oil. This will likely create risks when engaging with Indian companies. First, Indian goods will become more expensive. Second, the White House may seek to take additional punitive steps if the 50% tariff rate does not result in the change it seeks. These could be sanctions against Indian companies or UBOs directly involved in purchasing Russian oil. In the alternative, the White House could fine U.S.-based companies that are working with Indian companies that are involved in the purchase or transfer of Russian oil. Assessing these risks will require in-depth analysis of these supply chains.
Beyond Compliance: Why Emerging Political Risks Demand Proactive Analysis
While these emerging risks have yet to materialize into fines or penalties for U.S.-based firms, the risks remain elevated as the White House takes untraditional steps to pursue its policy goals. While U.S. companies can still do business in Brazil, India and other nations with certain geopolitical risks, business intelligence analysts should consider these emerging risks to assist their clients in operating efficiently and free of regulatory obstacles.
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