As businesses grow and enter new global markets, their regulatory challenges also expand. Corruption, money laundering, data privacy beaches, and export controls are just some of the complexities that can negatively impact your brand – and possibly even land your business in legal trouble.
That’s why organisations conduct due diligence prior to engaging in any formal agreement. Businesses need to understand their potential liabilities under anti-corruption laws and other legislations, and the due diligence process allows your compliance team to make informed decisions about which parties you can do business with – and in what capacities.
Initial due diligence can also provide you with opportunities to put in place mitigation activities that lower the risks of working with higher risk third-parties or individuals representing your organisation.
Many organisations practice first-level due diligence.
This includes checking the names of individuals and companies against hundreds of global watch lists. These lists enable compliance teams to identify potential corrupt activities, including:
- Money laundering
- Sanctioned individuals / corporations
Although this level of due diligence may suffice for some companies, many others absolutely require level-two checks.
The next level of due diligence
Next-level due diligence checks are far more comprehensive, with checks conducted across three key categories – corporate registries, enforcement actions and litigation, and international media.
This is how second-level due diligence checks protect your organisation from unknowingly working with potentially harmful parties.
Why check corporate registries?
A third party may tell you something different from what they’ve actually filed.
This is why it’s important to verify what they say, against corporate registries.
Corporate registry data can also reveal ownership percentages and how the corporation is structured – showing details like subsidiaries and beneficial ownership.
Why check enforcement actions and litigation?
Before working with a third party, you need to know if they are involved in any legal actions.
This includes legal or civil actions involving claims either made by them, or made against them.
This may be an integrity concern that you need to include in your report.
Why check international media?
By checking major newspapers and periodicals from across the globe, you could uncover information about a third party that they may be hiding – such as corruption or details about their key executives and associated parties.
And if there is already a potential red flag, it’s especially crucial to conduct a deep dive using media sources.
By gathering information on a third party using the sources mentioned above, you can significantly reduce the risk of encountering potential issues that could lead to either regulatory or reputational risks for your organisation – making decision making simpler (and safer).
The solution: 3 powerful tools for next-level due diligence checks
The Handshakes App is a subscription platform that gives you access to official company registries across Singapore, Malaysia, Vietnam and China – alongside capital markets data from Singapore, Malaysia and Hong Kong.
What’s more, Handshakes’ proprietary mapping technology makes it easy to uncover hidden connections and risk exposure – giving you valuable insights in a fraction of the time traditional checks used to take.
Prefer an on-demand, done-for-you service instead?
With Handshakes Xpert, our expert team conducts your due diligence checks for you.
We dive deep into the persons and companies you want to look at, uncover their connections, risk exposure and other potential issues, then present our findings to your team.
Handshakes’ technology powers ScoutAsia, a subscription news platform developed by Nikkei and the Financial Times. ScoutAsia offers over 50 of the best Asian business and financial news sources in one convenient subscription package.
Using ScoutAsia, you are only a few minutes away from discovering any previous mentions of the third party you’re checking on – across multiple publications. You can even create alerts to monitor new mentions of specific companies or related parties for you.