The UK Government has been criticised for failing to act quickly to secure UK companies' ... access to extensive databas
MEDIA ALERT - FOR IMMEDIATE RELEASE WORLD-CHECK WARNS ORGANISATIONS TO ACT WITH CAUTION BEFORE ENTERING INTO CONTRACTS IN LIBYA New business opportunities in Libya must be appraised carefully London, 24 August 2011: Organisations must undertake thorough due diligence before entering into contracts with Libya’s National Transition Council (NTC) warns World-Check. This follows an indication given by the NTC that it will honour billions of pounds worth of contracts agreed under Colonel Mummar Gaddafi’s regime. The UK Government has been criticised for failing to act quickly to secure UK companies’ interests in the North African country ahead of their European competitors. World-Check, a leading risk intelligence agency, believes however that organisations need to be very careful in choosing who they do business with before entering into any kind of contractual relationship. To protect assets and reputation, World-Check cautions that a thorough, detailed and expert due diligence is required. A wealth of business opportunities have been identified by organisations wishing to participate in the reconstruction of Libya and the resumption of the country’s oil and gas industries. Yet the UK Government’s response to the situation is entirely appropriate says World-Check’s specialist advisor in geo-strategic forecasting & the assessment of risk, Rear Admiral Chris Parry. "The emergence of a more broadly based political settlement in Libya after decades of dictatorship is likely to present a wide variety of political and commercial opportunities, especially in re-establishing the country’s economy and building a civil society. However, there are also considerable risks in committing capital and resources in such circumstances, as has been seen during the difficult transition in Iraq and in the wake of humanitarian crises, such as in Haiti, Indonesia and Pakistan. Experience shows that it will take time for the rule of law, accountability and responsible national institutions to be established and provide sufficient assurance." He added, "Commercial interests and individuals seeking to invest in Libya need to be fully aware of the risks that accompany investment in these fluid, complex situations, which are typically characterised by corruption, bribery, opaque assurance mechanisms and illicit transfers of state assets, property and capital. In conducting due diligence, they need access to extensive databases that can provide up-to-date intelligence about those individuals and institutions involved in political and economic decision-making, together with their connections and networks, both internal and external. In assessing national and local organisations and individuals they are considering as potential business partners, they also require detailed risk profiles based on joined-up assessments of activity, behaviour and financial patterns, in order to mitigate risk, enable compliance and protect their reputation. " Due to the uncertainty of the political environment, international institutions are also adopting a 'wait and see' attitude. Sanctions against Libya could be lifted as early as next week, according to reports. The EU foreign policy chief, Catherine Ashton, commented earlier in the week: "For the moment ... sanctions will remain in place, but we can always lift them fairly rapidly." World-Check's Middle East and Counter Terrorism Specialist John Solomon said: "In countries such as Syria and Libya which are experiencing unparalleled levels of turbulence and instability identifying actual government control and ownership requires constant monitoring and review. Couple this with the difficulty in obtaining and corroborating reliable data during a period in which existing power balances shift daily, it is the sensible organisation that exercises caution and undertakes comprehensive risk screening." Companies therefore cannot afford to be complacent when it comes to understanding the risks of doing business in these complex, currently insecure countries and it is inadvisable to enter the country without expert advice. Changes of government and the resultant instability create the ideal conditions for criminal and terrorist groups to thrive, presenting increased risk to business.
With legislation such as the UK Bribery Act and the Foreign Corrupt Practices Act (FCPA) casting a wide and transnational net, strict adherence to ethical and legal principles by an organisation will minimise the risks of any potential violation and resultant penalties, as well as protect against any reputational damage.
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