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A compilation of articles, highlighting the depth and complexity of this world wide problem. 

A compilation of articles, highlighting the depth and complexity of this world wide problem. 


A compilation of articles, highlighting the depth and complexity of this world wide problem. 

Enhanced Due Diligence in Construction and Real Estate

Addressing Crime Practices in Construction

According to the World Economic Forum, between 10 and 30% of the value is lost through corruption in construction, which is expected to reach $17.5 trillion per annum by 2030.

Construction-related sectors such as real estate, basic materials, transportation, etc are among the top investigated industries by the US government for potential violations of the Foreign Corrupt Practices Act (FCPA). Asset misappropriation, bribery, and procurement fraud are among the most common types of corruption construction companies face. Construction companies are particularly exposed to bribery and corruption due to the industry’s heavy reliance on public procurement processes at the local or national level, especially in emerging markets.

According to transparency international, buying luxury property in the world’s most sought-after cities is a frequent method for criminals to enjoy their illicit gains. This method is often used by Politically Exposed Individuals (PEP), including some individuals subject to the newly-imposed Russian sanctions.

Mitigating Risk in Construction and Real Estate

To mitigate against these risks, and associated penalties and reputational damage, construction, and real companies should ensure they have proper risk assessment procedures in place, particularly for third parties that facilitate relations with local or central governments, complete parts of sizeable fracture projects as a subcontractor or act as consultancy companies.

Once identified, conducting enhanced due diligence (EDD) on high-risk third parties forms part of a robust compliance program and can instill confidence in potential third parties do not have a history of financial crime.

In addition to bribery and corruption, construction companies should utilize their due diligence programs to mitigate against other common risk factors in the industry including:

  1. Human Rights and Environmental Issues
  2. The supply chain links high-risk industries to forced labor
  3. Political exposure of management and ultimate beneficial owners (UBOs) of a third party which may increase corruption and collusion risk,
  4. Exposure to newly-imposed Russian sanctions in third parties.

EDD reports help better understand the reputation of a third party through detailed research and background analysis including analysis of available public records, unwrapping corporate entities to UBOs, conducting thorough local language adverse media to identify risks, and understanding litigation/enforcement history.

Gain detailed intelligence on your third parties and their associates using our
configurable analyst produced Enhanced Due Diligence reports.
Our Enhanced Due Diligence Reports leverage our in-house multi-lingual research experts to provide a comprehensive risk analysis based on your supplier risk profile delivered in a customized reporting document. These reports can be ordered and delivered to our centralized platform. Find out more. 

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