International Due Diligence Know who you are buying, hiring or paying before the contract is signed

01Definition

What international due diligence covers and why it differs from a database check

A screening database tells you whether a name appears on a list. International due diligence tells you whether the name is the right name, who sits behind it, and what the list does not show. The difference matters most in the jurisdictions where companies are cheap to form, ownership filings are thin, court records are scattered across regional systems and the press works under pressure. A clean screening result on a shell company registered last year says very little. A review that confirms the operating address, identifies the people who control the entity and reads the local-language commercial press says a great deal more.

In practice the work combines four strands. Corporate records establish that the entity exists, when it was formed, who its registered officers are and what it has filed. Ownership research follows shareholdings through holding companies and nominee arrangements to the natural persons who ultimately benefit. Compliance screening checks the entity and its principals against sanctions lists, enforcement actions, debarment lists and politically exposed person indicators. Reputational research reads litigation, regulatory, media and online sources in the languages that matter for the market, and at higher tiers, discreet enquiries with people who know the sector add context that no record holds.

The output is not a pass or fail. It is a set of findings with sources, a view on what they mean for the specific decision in front of the client, and a clear list of what could not be verified. That last list is often the most useful part of the report, because it tells a deal team or compliance officer where the residual risk sits and what contractual protections, representations or further enquiries might close the gap.

Delator Group consultants lead each international due diligence engagement from scoping to final report. Where part of the work involves activity that local law reserves for licensed investigators, most often background checks on individuals or field enquiries, that part is completed by a locally licensed partner in Delator's network and folded into a single report under the Delator case lead.

02Use cases

When companies commission international due diligence

The triggers are usually commercial rather than investigative. Someone wants to sign something, pay someone or bring a new party into the business, and a compliance policy, a lender, a board or plain prudence says the counterparty needs to be checked first. The scope should follow the trigger, because a pre-acquisition review on a manufacturing target asks different questions from a check on a one-off logistics provider.

Mergers, acquisitions and minority investments

Pre-transaction reviews sit alongside financial, legal and tax diligence. They look at the target's founders, managers and significant shareholders, the history of the business, litigation and regulatory exposure, government relationships, how the target won its major contracts, and any sanctions or export-control nexus. Acquirers inherit successor liability in many systems, so conduct that predates the deal can become the buyer's problem after closing.

Agents, distributors, consultants and other intermediaries

Most foreign bribery enforcement cases involve a third party. Agents who interface with customs, licensing authorities or state-owned customers carry the highest risk, followed by distributors with discretion over pricing and resale, and consultants paid success fees. Due diligence here focuses on qualifications, ownership, links to public officials, compensation logic and reputation for integrity.

Suppliers, joint venture partners, investors and lenders

Supplier onboarding increasingly carries sanctions, forced labour and export-control questions alongside the usual integrity checks. Joint venture partners and incoming investors raise source-of-funds and reputational issues, particularly where the partner holds a government licence or the investor's wealth is concentrated in a single sector. Lenders and financial counterparties need know-your-business work that meets their own regulatory obligations.

03Tiers

Due diligence tiers: matching depth to risk

A risk-based program does not run the same review on every counterparty. It sets out tiers, defines what each tier includes, and uses a short set of risk factors to decide which tier applies. Regulators on both sides of the Atlantic expect this approach. The U.S. Department of Justice's Evaluation of Corporate Compliance Programs asks whether third-party management is risk-based and whether the company understands the business rationale for using each intermediary, and UK Ministry of Justice guidance on the Bribery Act describes due diligence as one of the six principles behind adequate procedures.

The table below shows how Delator typically structures international due diligence tiers. The boundaries move with the client's own policy, the jurisdiction and the size of the relationship.

• Jurisdiction risk: perceived corruption levels, rule-of-law indicators and record availability in the counterparty's country.
• Government interface: whether the counterparty deals with public officials, state-owned enterprises, customs or licensing authorities on the client's behalf.
• Compensation structure: success fees, commissions out of line with the market, or requests for payment to third countries or third parties.
• Relationship value and duration: a five-year exclusive distribution agreement warrants more than a single purchase order.
• Known red flags: anything already surfaced by the business, a screening hit, a whistleblower report or a refusal to complete a questionnaire.

04Ownership

Beneficial ownership research across borders

Ownership is where international due diligence earns its fee. Registered shareholders are often other companies, and those companies may sit in jurisdictions with no public shareholder register. Nominee directors, bearer-share histories, trust arrangements and informal family holdings all obscure who actually controls a business. Sanctions exposure adds urgency, because the U.S. Treasury's Office of Foreign Assets Control applies the 50 percent rule: an entity owned 50 percent or more, directly or indirectly, individually or in the aggregate, by one or more blocked persons is itself treated as blocked, whether or not it appears on a list.

Public access to ownership data varies sharply. The UK's register of persons with significant control is public and searchable, and recent company law reforms are introducing identity verification for directors and those with significant control. Across the European Union, beneficial ownership registers exist under the anti-money laundering directives, but after the Court of Justice of the European Union's November 2022 judgment on general public access, many member states restricted who can see them, and access now often depends on demonstrating a legitimate interest. Other jurisdictions publish shareholder lists with annual returns, require a paid extract, or hold the information only with the company's agent.

A careful ownership map records, at each layer, which source confirmed the link, the date of that source and what it does not show. Where the chain disappears into a jurisdiction without public data, the report says so plainly instead of guessing. The client can then ask the counterparty for ownership declarations and supporting documents, and the review can test those declarations against everything else that is known.

• Corporate registry extracts and historical filings for each entity in the chain.
• Shareholder registers, annual returns, capital-increase notices and gazette publications where available.
• Beneficial ownership registers where the client or Delator has lawful access.
• Cross-checks against court filings, security registers, procurement records and regulatory licences that name owners.
• Analysis of shared addresses, shared officers and formation agents that suggest a wider group or nominee structure.

05Integrity

Integrity and reputational due diligence in local languages

Records show what was filed. Reputation shows how a person or company behaves when nobody is filing anything. Integrity due diligence examines the track record of the principals behind a counterparty: how they built the business, how they treat partners and creditors, whether they are known for close ties to particular officials, and whether there are allegations that never reached a court. This is the part of international due diligence that most depends on language skills and local context.

Local-language media research goes beyond running a name through a search engine. It means knowing the regional business press, the trade publications for the sector, the archives that are not indexed, and how names are transliterated across scripts. A single principal may appear under several spellings in Latin, Cyrillic, Arabic or Chinese characters, and each variant needs to be searched. Results then have to be assessed for reliability, because some outlets publish paid content or pursue political grudges.

At Level 3, discreet enquiries with people who know the sector, such as former employees, competitors, industry association members or journalists, supply context no record holds. These enquiries are conducted without disclosing the client and without misrepresentation that would be unlawful in the jurisdiction. Where local law treats this kind of human-source work, or background checks on named individuals, as reserved for licensed investigators, Delator leverages a locally licensed partner in its network to complete that work and does not do it itself.

The integrity section of the report distinguishes clearly between facts confirmed by records, consistent accounts from multiple independent sources, single-source allegations and rumour. Decision-makers need to know the difference, and a report that blurs it creates its own legal and reputational exposure.

06Legal drivers

The legal frameworks that shape international due diligence

Several overlapping regimes make due diligence a legal expectation rather than a courtesy. None of them sets out a single mandatory checklist, which is why scoping matters. The table summarises the frameworks Delator most often sees driving international due diligence requests. It describes them at a general level and is not legal advice on any particular matter.

07Red flags

Red flags international due diligence is designed to surface

Red flags rarely announce themselves. They show up as small inconsistencies between what a counterparty says and what the records show, and they matter in combination. One unusual feature may have an innocent explanation. Three together usually justify an enhanced review or a direct conversation with the counterparty before signing.

The list below reflects patterns that recur in enforcement actions, deferred prosecution agreements and published regulatory guidance. It is not exhaustive, and Delator tailors the red-flag set to the sector and jurisdiction in each engagement.

• The counterparty was formed shortly before the opportunity arose, has no operating history and no visible staff, premises or customers.
• A government official, a relative of one, or a former official recently out of office holds an ownership interest, a board seat or an undisclosed advisory role.
• Ownership runs through jurisdictions with no public register and the counterparty declines to provide ownership declarations.
• Requested commissions or fees are high relative to the services described, are paid on success alone, or are to be wired to an account in a third country.
• The counterparty was recommended or insisted upon by a customer's procurement official or a licensing authority.
• Registered addresses are shared with dozens of unrelated companies, or with a formation agent known for nominee services.
• Litigation by former partners, unpaid creditors or minority shareholders alleges diversion of funds or concealment.
• The counterparty's stated experience cannot be matched to any verifiable contract, reference, licence or trade record.
• Screening returns a partial match that the counterparty's own documents cannot resolve.
• The counterparty resists anti-corruption representations, audit rights or termination clauses that are standard in the sector.

08M&A

International due diligence in mergers and acquisitions

Deal teams work to compressed timetables, and investigative diligence has to fit inside them without becoming the item that delays signing. The practical answer is to sequence the work. A rapid first pass in the first week covers entity, ownership and screening on the target and its principals, and flags anything that would stop the deal outright. A second phase runs in parallel with confirmatory legal and financial diligence and goes deep on the issues that matter for valuation, representations and warranties, and post-closing integration.

Questions specific to acquisitions include how the target won its largest contracts, whether it depends on a single public-sector customer, how it obtained key permits and licences, whether founders or managers have side businesses that trade with the target, and whether any shareholder is subject to sanctions or export-control restrictions. For targets with government exposure, the review looks at intermediaries the target itself uses, because the acquirer will inherit those relationships too.

Access matters. Where the target is cooperating, a data room and management interviews can answer many questions directly, and Delator's role is to test management's account against independent sources. Where the transaction is competitive or hostile, the review relies on public and lawfully obtained information only, and the scope is drafted with deal counsel so that confidentiality obligations and any applicable securities rules are respected.

Post-closing, the same research supports integration. The DOJ has made clear that it expects acquirers to integrate acquired businesses into their compliance programs and to examine high-risk third parties after closing. A pre-closing diligence report gives the integration team a ready list of intermediaries to re-paper, payments to review and relationships to end.

09Method

How Delator runs an international due diligence engagement

Each engagement begins with a scoping call between the client, often through outside counsel, and the Delator case lead. The call settles who the subjects are, which jurisdictions are involved, what decision the review supports, the deadline, and who will receive the report. Those points go into a written engagement letter, along with data-handling terms and any privilege arrangements counsel wants in place.

Research then runs in layers. Open records and commercial databases come first because they are fast and give the structure for everything that follows. Local-language research and registry retrieval come next, often requiring in-country retrieval of documents that are not online. Discreet enquiries and any work reserved for licensed investigators are commissioned only after the earlier layers show they are needed and the client approves, which keeps costs proportionate.

Quality control is built into the method. Every material finding is linked to a source, and the report distinguishes confirmed facts from reported claims. A second consultant reviews the draft for gaps, overstatements and unsupported inferences before it goes to the client. Where findings could be defamatory if wrong, the language is reviewed with particular care.

• Scoping call and written engagement letter with tier, subjects, jurisdictions and deadline.
• Identity resolution for each subject, including name variants and transliterations.
• Corporate, ownership, litigation, regulatory and screening research.
• Local-language media and online research, with source reliability assessed.
• Discreet enquiries and licensed partner work where scoped and approved.
• Draft report, second-consultant review and delivery with a debrief call.

10Data and ethics

Data protection, privilege and lawful methods

Due diligence on people is processing of personal data, and the rules differ by jurisdiction. Under the EU GDPR, a controller needs a lawful basis, which for third-party vetting is typically legitimate interests supported by a documented balancing test, and must limit collection to what the purpose requires. Data relating to criminal convictions and offences may only be processed under the control of official authority or where authorised by law, which restricts how criminal record information can be gathered and used in many member states. Other countries have their own data protection statutes and some restrict transfer of personal data abroad.

Delator designs each review so that personal data collection is proportionate to the tier, retained only as long as the engagement and the client's documented needs require, and transferred under appropriate mechanisms. Reports avoid irrelevant personal details about family members or private life unless they bear directly on the risk in scope, such as a family relationship with a public official.

Methods are lawful in the jurisdiction where they are used. That excludes pretexting to obtain protected records, accessing accounts or systems without authorization, paying officials for information, and any form of covert recording that local law prohibits. Where counsel directs the work to support legal advice or anticipated litigation, the engagement can be structured to help preserve privilege, though whether privilege attaches is a question for counsel under the applicable law.

11Programs

Building a repeatable third-party due diligence program

One-off reviews answer one-off questions. Companies with hundreds of agents, distributors and suppliers need a program: a risk-scoring questionnaire, defined tiers, a refresh cycle, escalation rules for red flags and records that show a regulator what was done and why. Delator's security and investigative consulting work helps legal and compliance teams design that structure and then supplies the enhanced and integrity reviews the program calls for.

A workable program keeps the front end light. Business sponsors complete a short form explaining why the third party is needed and what it will do. The counterparty completes a questionnaire covering ownership, government links and compliance commitments. Automated screening runs on everyone. Only those who score above defined thresholds move to enhanced or integrity review. Refresh periods are shorter for higher-risk relationships, and any material change, such as a new owner or a request to change payment details, triggers a fresh look.

Documentation is as important as the research. When a regulator or a court later asks why a company kept working with a distributor that turned out to be paying bribes, the answer needs to be in the file: the risk score, the tier applied, what the review found, what the company did about it and who approved continuing the relationship. Delator's reports are written with that later reader in mind.

12Acting on findings

What to do with international due diligence findings

A report that sits in a file changes nothing. The value of international due diligence comes from what the business does next, and the options are wider than proceed or walk away. Most findings lead to a middle path: proceed with conditions, restructure the relationship, ask for more information, or escalate to a more senior approver with the risk documented.

Contractual protections are the most common response. Anti-corruption and sanctions representations, audit rights, termination rights for breach, payment only to accounts in the counterparty's own name and country, and a requirement to notify ownership changes all reduce exposure. In acquisitions, findings shape specific indemnities, escrow amounts, conditions precedent and the price itself. Where a finding concerns a single manager or intermediary rather than the target as a whole, the remedy may be to require that person's exit before closing.

Some findings call for a direct conversation. A government official among a distributor's shareholders may have a lawful explanation, a divestment plan or a disclosure that satisfies local conflict rules. Asking the counterparty to explain, and testing the explanation against independent records, is often more productive than assuming the worst. Delator can prepare the questions and assess the answers.

Occasionally the right decision is to decline. When ownership cannot be established, when screening reveals a sanctioned principal, or when the evidence points to an intermediary whose real function is to pass money to officials, no contract clause makes the risk acceptable. A clear, sourced report makes that decision easier to explain to the business sponsor who wanted the deal, and easier to defend later if anyone asks why it was refused.

Step by step

How an Engagement Works

1. 01

   Scoping call

   The client or its counsel and the Delator case lead agree subjects, jurisdictions, the decision the review supports and the deadline.

2. 02

   Engagement letter

   Scope, tier, deliverables, data-handling terms and any privilege arrangements are confirmed in writing before research begins.

3. 03

   Identity and structure

   Each subject is resolved, name variants are listed, and the corporate and ownership structure is mapped from primary records.

4. 04

   Screening and records

   Sanctions, enforcement, PEP, litigation, regulatory and registry research runs across every relevant jurisdiction.

5. 05

   Local-language research

   Consultants and in-country resources review regional media, trade publications and archives, assessing each source's reliability.

6. 06

   Licensed partner work

   Where scoped and approved, a locally licensed partner completes discreet enquiries or individual background checks that local law reserves.

7. 07

   Review and report

   A second consultant reviews the draft, then the case lead delivers the report and walks the client through findings and open questions.

Deliverables

What You Receive

• Written due diligence report with an executive summary and risk rating for each subject.
• Ownership chart showing each layer, the source for each link and where records stop.
• Screening results with match analysis explaining how potential hits were resolved.
• Litigation, regulatory and enforcement summary with case references where available.
• Local-language media digest with translations of material passages and source assessments.
• Red-flag table linking each concern to the evidence behind it and a suggested response.
• List of questions for the counterparty and contractual protections to consider.
• Debrief call with the case lead for legal, compliance or deal teams.

Industries

Who Uses Due diligence Services

• Private equity and corporate developmentAcquirers inherit a target's history, so ownership, integrity and government-link findings feed directly into valuation and deal terms.
• Energy, mining and infrastructureLicences, concessions and state customers put intermediaries in constant contact with public officials, which raises bribery and sanctions risk.
• Life sciences and medical devicesDistributors and healthcare professionals in state systems are frequent subjects of anti-corruption enforcement involving third parties.
• Defense, aerospace and dual-use technologyExport controls, end-user checks and offset arrangements require clear knowledge of who owns and controls each counterparty.
• Financial services and fintechKnow-your-business and correspondent relationships depend on reliable beneficial ownership information across jurisdictions.
• Manufacturing and consumer goodsSupplier networks raise sanctions, forced labour and diversion questions alongside ordinary integrity checks.
• Logistics and freight forwardingCustoms brokers and agents interface directly with border officials, one of the most frequent bribery risk points.

Credentials

Who Does the Work

Delator Global's consultants come from backgrounds where finding facts under pressure is the job: U.S. military intelligence, the Department of Homeland Security, former law enforcement officers of every kind, former bounty hunters, and technology specialists across networks, applications, forensics and data. Behind them sits a network of locally licensed partners holding a wide range of licences and certifications, so every part of an engagement is done by someone entitled to do it in that country.

• Military intelligenceCollection planning, analysis and reporting discipline.
• Homeland securityFederal investigative and border, trade and financial crime experience.
• Law enforcementInterviewing, evidence handling and courtroom testimony.
• Bail enforcementLocating people who do not want to be found, lawfully.
• TechnologyNetwork, application, cloud and forensic specialists.
• Licensed partnersLocal licences for the work local law reserves.

Related services

Related Delator Global Services

• CorporateInternational Corporate InvestigationsInternational corporate investigations rarely stay inside one legal system.
• CorporateAnti-Bribery and Corruption InvestigationsA suspicious commission to a customs agent, a consultant paid through a third country, a hospitality budget that keeps growing near a tender deadline: these are the facts that start anti-bribery and corruption investigations.
• CorporateSupply Chain and Sanctions InvestigationsSupply chain and sanctions investigations answer questions regulators now expect companies to answer with evidence rather than assurances: who made the goods you import, who ultimately owns the parties you deal with, and where your products end up after they leave your hands.
• CorporateInternational Asset TracingInternational asset tracing is the work of finding out what a debtor, a fraudster or a counterparty really owns or controls outside its home country, and where it sits, so that a judgment, an arbitral award or a fraud claim turns into money.
• ConsultingInternational Security ConsultingDelator Global provides international security consulting to general counsel, CFOs, CISOs and compliance leaders who need practical advice on risks that cross borders.

Every Delator Global service

Countries

Where Delator Global Works

Delator Global handles matters in 152 countries, with a country page for each and a city page for every city over 200,000 people. Larger markets are listed below; the full list is on the international page.

• United Kingdom
• Canada
• Mexico
• Germany
• France
• India
• Brazil
• Australia
• Japan
• United Arab Emirates
• South Africa
• Nigeria
• China
• South Korea
• Spain
• Italy
• Netherlands
• Poland
• Turkey
• Philippines
• All 152 countries