international background investigation

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.

Your business isn’t confined to the United States – so why would you limit your investigation?

True, the complexities of international background investigation or due diligence investigation can be daunting and expensive. The key to any successful international background investigation is to work with an experienced investigator who can not only manage reliable investigative sources throughout the globe, but who can review and analyze the data from multiple sources to “connect the dots.” A skilled investigator will work with you to first answer two critical questions: (1) What jurisdictions should we cover? and (2) What information can we reasonably expect to receive?

Identifying Jurisdictions

The first step is to identify the countries and local jurisdictions where the subject has lived and worked. It will be important to consider the length of time that the individual has lived and worked in each area as well as the amount of information that can be retrieved from those jurisdictions. Also to be considered is the possibility that the subject may have had temporary international assignments (i.e. did not established residency) in a country or frequently traveled to a specific location.

What to expect?

In any international investigation, it is important to have reasonable expectations with regard to the availability of records in each jurisdiction. Local laws and customs, language difference, and access to country-specific databases can pose a significant challenge. Generally speaking, many of the public records that one would expect to find in a U.S.-based investigation are not routinely available in other countries. For example, EU privacy laws and data protection requirements may prevent the disclosure of some property and litigation records. In other countries, there are few databases and information banks, and research is a time-consuming, manual task for local investigators.

Are criminal records available?

One of the most basic searches in a U.S.-based investigation, a criminal records check, has proven to be one of the most challenging in international investigations. In a limited number of countries, such as the United Kingdom and Australia, criminal histories may be searched only with the express written consent of the subject. In most other nations, however, criminal records are impossible to lawfully obtain and investigators must rely on other lawful means to obtain this information (e.g. local language media searches, human intelligence, etc.). There are a number of websites that claim to have criminal records from various countries across the world, but this is simply not true. The information is either gleaned from online newspapers or combination of international Watch Lists, OFAC lists or other readily available sources.

Conclusion

An experienced investigator will have local contacts to help outline document and intelligence availability within the necessary jurisdictions. Because of the limitations of international record searching, having this network of reliable and credible local sources is key to an efficient and successful international background investigation.

Posts

How Geopolitics is Redefining Compliance and Global Business Intelligence

Sanctions and the FCPA

Emerging Risks in Brazil and India

Beyond Compliance: Why Emerging Political Risks Demand Proactive Analysis

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