Emerging Global Markets and Risk-Based Due Diligence

Risk-based due diligence is necessary for companies that plan to do business in high risk and emerging markets. Companies need to evaluate and take steps to minimize the risks of doing business in those markets. Risks may arise from potential business partners, targets or foreign third-party agents. Conducting thorough due diligence can mean the difference between value added to the company and problems that lead to an investigation or penalties.

For example, Chinese law is silent on the legality of private investigations. However, if Chinese authorities believe an investigator has violated the law, they may arrest the investigator, who may not know he or she was breaking the law. Because China lacks centralized public records, information gathering is essential to conducting due diligence, but the threat of running afoul of Chinese law, even accidentally, poses a significant hurdle for companies interested in doing business in China.

Doing business in high risk markets requires companies to fastidiously conduct due diligence on the potential business partner, acquisition or third-party agent to identify potential risks, conflicts of interest, and ensure legal compliance.

Listen as our authoritative panel discusses the challenges facing companies and their counsel when they are doing or considering doing business in emerging markets, such as the BRIC countries. The panel will discuss the hurdles involved in conducting due diligence, identifying red flags, analyzing potential risks, and interpreting the information gathered, and offer guidance for overcoming those hurdles and ensuring compliance.

1. Hurdles involved in conducting due diligence in restricted environments
   1. Local laws
   2. Business culture in restricted environment
   3. Record keeping
2. Overcoming the hurdles and ensuring compliance
   1. Investigation/interview
   2. Identifying red flags
   3. Analyzing potential risks
   4. Interpreting information gathered

The panel will review these and other key issues:

• What unique risks do companies face when conducting business in high risk countries?
• What role does due diligence play in minimizing the risks associated with doing business in emerging markets?
• What cost effective strategies can companies employ to reduce risks posed by potential partners, third parties or targets?