Financial Crime World

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Due Diligence Procedures in Azerbaijan Prove Challenging for US Companies

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Azerbaijan’s strict commercial secrecy law, implemented in 2013, has significantly complicated due diligence efforts for United States companies looking to establish partnerships or acquire stakes in local firms. The legislation limits the information that banks and other financial institutions can share with third parties about Azerbaijani companies, making it difficult for US investors to obtain accurate financial documentation and credit history.

Challenges in Conducting Due Diligence

  • Uncovering the corporate structure of a company
  • Identifying beneficial owners, major partners, or shareholders
  • Conducting thorough background checks on former partners, clients, and competitors

Failure to conduct a careful due diligence survey can have serious consequences, including jeopardizing investments and commercial deals, with limited recourse available in such instances.

Despite these challenges, many Azerbaijani firms have established track records of positive work with international companies. To navigate the complex business environment in Azerbaijan, US companies may want to consult with:

  • The US Embassy’s Commercial Section: Can help determine the bona fides of prospective foreign business representatives or partners.
  • The US Department of Commerce’s U.S. Commercial Service: Utilizes its global presence and international marketing expertise to help US companies sell their products and services worldwide.

Resources for US Companies

For more information, visit:

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