This is the second article in a series of articles based on international business due diligence. 

Note some of the information in the articles are duplicative as the due diligence exercises are similar.  However, the results will not be similar.

When considering a business opportunity in a foreign country, minimize the risks by performing creative and focused international due diligence.  This process can alleviate unwise business decisions. 

Is There Conflict in Brazil?  Check Out the Armed Conflict Database

Is there conflict in the part of the country where the business is located?  Check out the Armed Conflict Database which can generate reports and download data as well as browse year-by-year analyses and fact sheets. 

See the chart below which depicts the Fatalities, Internally Displaced Persons and Refugees in the Caribbean and the Americas, of which Brazil is a subset.

international acounting firms

Determine the Terrorism Threat 

Review the threat assessment regarding the city where the company is located by using TRAC, “one of the most comprehensive compendiums of information and analyses of terrorist groups and activities in the world.”  Monitor the Chatter Control Room and the Threat Assessment in Brazil before making a business decision.

  • The threat assessment result for Brazil is noted that the terrorist groups use the territory to their advantage but they are not a threat to Brazil
  • In reviewing the Chatter Control Room the following recent result was located:

January 31, 2018 from Insight Crime

Submitted by Brian Price

Brazil seized 500 boxes of contraband cigarettes originating from Tabacalera del Este, a...

Arrests Again Point to Paraguay President’s Contraband CigarettesCigarettes manufactured by a firm belonging...

Vulnerable Cities

TRAC also notes the vulnerable cities relative to terrorism.  Review this list before making any business decisions. 

  • The vulnerable cities in Brazil are São Paulo, and Rio de Janeiro.

Check out the Attacks

Review a list of the attacks in the country before making a business decision. For example, below are a list of potential attacks in Brazil.

  • Attacks on Electrical Grids
  • Attacks on Infrastructure
  • Attacks on Oil Distribution
  • Attacks on Soft Targets
  • Attacks on Water Supplies, Border Security and Terrorism

General Business Due Diligence

Investigate the Specially Designated Nationals (SDNs)

Identify the risk associating with individuals noted on Specially-Designated Nationals, Blocked Entities List, or other prohibitory laws and regulations.

Review the Country Industry Forecast for Brazil

“Overall industrial production (manufacturing, extraction and utilities) is forecast to rise by 1.9% in 2017 and expand by 4.2% in 2018. The overall value of industrial production in 2016 was BRL631.9 billion at 2010 prices.  Within this, the largest sectors are metals mining, quarry & related services (BRL117.6 billion), utilities (BRL101.6 billion) and coke & refined petroleum products (BRL76.8 billion). By 2021 industrial production will total BRL733.7 billion (2010 prices), rising to BRL828.2 billion by 2026. The largest sectors in 2026 will be metals mining, quarry & related services (BRL165.9 billion), utilities (BRL112.1 billion) and coke & refined petroleum products (BRL100.0 billion).”

“The three fastest growing sectors in manufacturing over the next decade will be electronic components & boards, casting and telecommunication equipment. The slowest growing sectors will be leather goods, textiles and printing & recording media.”

Check the Brazilian Company News Bites

The NewsBites Finance site shows information that providers and professional and institutional investors need to know to cover every relevant market and security regarding a company.  See recent results below as an example:

3/21/18 Brazilian Co. News Bites - Stock Rep. 00:00:00
Brazilian Company News Bites - Stock Report
Porto Seguro hits year-high 7th time in one month March 21, 2018 18:00 BRT
Porto Seguro SA (SA:PSSA3), Brazil's 2nd largest Insurance company by market cap, hit a 52-week high of R$50.30 during the day, but closed lower at R$49.05. In the last one month the stock has hit a new 52-week high seven times and in the last three months fifteen times. The stock price has decreased 57.0 centavos (1.1%) from its last trading session of March 20 to close at R$49.05. Compared with the Brazil Index 50 which rose 149.0 points (1.1%) in the day, the relative price change was -2.2%. The fall was exacerbated by firm volume of 1.1 times the average daily volume of 500,422 shares.

Review the Latin American Newsstream

Latin American Newsstream enables users to search the most recent local, national, and regional news content with archives featuring newspapers, newswire, and news sites in active full-text format. It includes titles from Brazil, Mexico, Argentina, Costa Rica, Peru, Uruguay, Chile, Colombia, Ecuador, Guatemala, Puerto Rico, and Venezuela. Latin American Newsstream provides newspapers in Spanish and Portuguese. Key newspaper titles include: El Universal (Mexico City);O Globo (Brazil);La Nación (Argentina);and El Mercurio (Chile).


Is the Website Legitimate?

trust passport for accounting

Look for the Trust Passport™ logo.   This is an innovative new online identity product that confirms that the website is real and is owned by a legitimate company.  Within a few seconds, this product can determine if links are real and confirm who owns the website.

Perform a Hoover’s Company Record Search

For example, a search of Telefonica Brasil located the following:

“Operating in São Paulo, Telefônica Brasil (formerly Telecomunicações de São Paulo, or Telesp), offers local, intraregional long-distance, data transmission, and network services. The company also operates public payphones and provides interconnections to Brazil's long-distance provider Embratel. Telefônica Brasil emerged from the 1998 breakup of Telebrás, Brazil's former telecommunications monopoly. Its service area includes about 20% of Brazil's population and was opened to competition in 1999. Spanish telecom giant Telefónica, itself and through other subsidiaries, controls a majority stake in Telefônica Brasil.

key financials cpa firm

Conclusion: Identify the Black Holes and the Red Flags

Following the process above will assist in making wise business decisions and assist in evaluating strengths or vulnerabilities of a potential business partner.  Once reviewing the detailed results costly mistakes can be avoided due to lack of a background check on the business.

Contact Dr. Kim Miller, CFE, Senior Forensic Investigative Analyst at for further information.