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Advisory

Businesses operating internationally must be in the position to understand and assess political and regulatory risks at the national and sector levels in the regions in which they operate.

Berlin Risk offers comprehensive analysis of risk issues to support clients in their decision making. In order to reduce a client`s exposure to political risk, we advise on dispute prevention and negotiation settlement.

Reputational Risk Assessment

Reputational Risk Assessment is a best practice approach for companies that apply the principles of responsible business conduct. We have developed a dedicated Reputational Risk Assessment Methodology (RRAM) that goes beyond the legal approach to compliance, addressing issues of concern that might negatively impact your organization, including through stakeholder action.

Our RRAM and tool follow a holistic approach in supporting the risk management of the company, fostering synergies with the compliance and communications function.

RRAM covers the interconnected risk areas of:

  • business relationships and behaviour,
  • political risk and exposure,
  • environmental, social and governance (ESG) issues

The purpose of Reputational Risk Assessment lies in improving resilience against known and unknown risks that might jeopardise the company’s continuity and control of its business. The RRAM was built on our experience in Governance Risk Compliance Advisory, Integrity Due Diligence Investigations and the earlier design of related Risk Assessment Tools, such as the Reputational Risk Meter and the Political Risk Analysis System. 

Reputational Risk Event – © Berlin Risk

Case Study

A large infrastructure project in an African country involved international financing and the engagement of an experienced EPC contractor. Berlin Risk Advisors was asked by one of the financiers to undertake a reputational risk assessment of the corporation in order to identify any hidden issues of concern.  

A systematic scrutiny of reputational risk factors, including through interviews with human sources, revealed several cases of anti-trust violations in other countries in which the EPC company had been operating. In addition, it was part of a joint venture with a state-owned company in another African country that was associated with higher corruption risk. A further reputational issue stemmed from a minority shareholding interest in the EPC contractor by a controversial Chinese state-owned company, raising possible future governance concerns. Finally, reputational risks were identified with respect to controversies surrounding the environmental and social impact of the project, as well as relevant political interests involved.  

The reputational risk assessment resulted in a number of contractual risk mitigation measures, including procurement and subcontracting  agreements for the implementation of the project. Other recommendations included requesting additional assurance from the EPC contractor, regarding global compliance with anti-trust regulations and corporate governance standards. The company’s business conduct was also to be closely monitored through regular screening of media reports, in order to be able to identify and react to any emerging reputational concerns, including potential ESG issues going forward. 

Political Risk Analysis

Berlin Risk understands the politics of doing business in challenging jurisdictions. This is why we are able to assist companies working internationally in managing risks linked to political interferences.

We support our clients in reducing their exposure to political risks. Our expertise in conflict management enables us to offer specific advice ranging from dispute prevention to negotiation settlement.

Key political risks for a company operating in a foreign country:

  • new regulations of the relevant business sector
  • discriminatory governmental action restricting continuity and control of business operations
  • breach of public contract
  • the impact of corruption and shady connections among political officials, security forces and national business
  • security threats posed by political violence
  • popular unrest  and labour disputes due to social discontent
  • political uncertainty following elections or regime collapse with far-reaching impact on business operations.

We look at the political environment of an industry as an arena in which diverse stakeholders pursue their vested interests. By knowing how political risks are interconnected and dynamically change, we help our clients to navigate competitive political environments on both national and local levels. We provide critical information concerning political stability, legal issues, regulatory requirements, or any other factors that affect business operations or investment within any given country.

Dimensions of Events Involving Political Risks – © Berlin Risk

Case Study

An international investor was looking to co-finance the expansion of a Gulf-based corporation and were concerned about the political risk exposure involved. 

Research and enquiries into the company and its management revealed that both the beneficial owners and the management team were more closely connected to the country’s political leadership. Another concern which emerged was the individuals’ and their families’ links to both the Syrian regime and parts of the opposition. In addition, legal proceedings resulting from allegations of funding the Syrian resistance, increased both the reputational and legal risks attached to the planned engagement. 

The client decided to await the pending court decision, and in the meantime sought to develop risk mitigation measures, such as a possible modification of the ownership structure in order to reduce the risk exposure. In addition, recommendations for an overhaul of the organisation’s overall governance structure were also developed.

Compliance Risk Management

We support businesses in executing their compliance strategies. We develop risk-based procedures and best practice tools to meet regulatory requirements. With respect to “Know Your Counterparty” (KYC) we advise clients on building tiered due diligence programmes that fit their unique circumstances.

Our compliance solutions range from comprehensive remediation of existing customers and counterparties to advising on implementing, fine tuning and improving compliance processes. We are flexible in our approach as we know, one size doesn’t fit all.

  • We provide the following advisory services:
  • AML and counter terrorist financing
  • Anti-financial crime
  • Anti-bribery and corruption
  • Due Diligence Procedures
  • Sanctions compliance
  • ESG standards
  • Political risk and country risk
  • RegTech and KYC automation
  • Training

We also undertake audits in support of evaluating the effectiveness of existing policies and procedures, and advise on measures to strengthen internal controls.

Compliance Risk Management – © Berlin Risk

Case Study

Berlin Risk was asked by a financial institution to assist in improving its anti-finanical crime programmes and frameworks. Our experts provided support in drafting a new policy, undertaking a financial crime risk assessment and putting in place the appropriate procedures, including advice on the most suitable RegTech solutions. Berlin Risk also supported training and awareness-raising workshops.

Reg Tech Solutions

Compliance teams are striving to innovate by using RegTech solutions, in order to effectively manage the increased day-to-day complexity of mitigating their exposure to financial crime, sanctions, ESG and reputational risk.

Based on Berlin Risk’s research, the chart sets out an indicative overview of RegTech tools, which although not claiming to be exhaustive are relevant for financial and anti-cybercrime professionals and can be considered as elements of a possible anti-financial crime tech-stack.  

Berlin Risk Advisors has partnered with a select number of companies who provide an added value to due diligence and risk assessment efforts, as well as improving the basis for audit purposes.

Our experts, who are trained on the various solutions, and have extensive user experience, provide advice on which tools and solutions can be implemented to achieve a fit-for-purpose tech-stack tailored to individual business models and their specific risk exposure.

RegTech for Anti Financial Crime – © Berlin Risk

Anti Financial Crime (AFC) Advisory

With the constant evolution of anti-financial crime (AFC) regulation, compliance programs need constant revision in order to ensure that they are in line with regulatory requirements.

Berlin Risk has extensive experience in advising institutions on how to implement the regulatory updates andimprove their processes and procedures and is also involved in remediation and other operational projects including Know Your Customer (KYC), Enhanced Due Diligence (EDD) Anti-Bribery and Corruption (ABC), Environmental Social and Governance (ESG) and investigations. All partners are involved in anti-money laundering and counter terrorist financing (AML / CTF) training programs for financial institutions and corporations.

Anti Financial Crime Advisory – © Berlin Risk

Case Study

We have provided advisory services to financial institutions, corporations, public institutions and international organizations as well as NGOs in the following areas:

MLRO-as-a-Service

Risk Assessment and Gap Analysis

  • Methodology
  • Implementation

Development of Due Diligence and KYC Methodologies 

  • Sectors (e.g. investment funds) 
  • Topics (e.g. PEPs, country risk, sanctions risk)

Policy Advisory

  • Sanctions Compliance
  • Crypto Currencies
  • Citizenship by Investment Schemes
  • Conflicts of Interest 

Due Diligence

Our due diligence practice includes integrity due diligence, sanctions and ESG due diligence. We help you meet regulatory requirements.

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Investigation

Berlin Risk offers a portfolio of corporate intelligence solutions, which can be tailored precisely to meet the challenges of your project.

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