In Latin Lawyer, María González Calvet, Brandon Jiha, and Ananda de Almeida Examine Why Enhanced Due Diligence Can No Longer Stop at Intermediaries

In a new chapter in Latin Lawyer's The Guide to Corporate Compliance, litigation & enforcement partner María González Calvet, co-chair of the anti-corruption and international risk and Latin America practices, and litigation & enforcement associates Brandon Jiha and Ananda de Almeida examine how recent U.S. enforcement priorities, including the U.S. Department of State’s designation of many Latin American cartels as Foreign Terrorist Organizations, have expanded the risks that companies must identify and manage across their supplier and customer relationships.

The chapter analyzes how the convergence of anti-corruption, anti-money laundering, sanctions and anti-terrorism enforcement has broadened the concept of third-party risk beyond the traditional question of whether a counterparty could create liability through actions taken on the company’s behalf. The authors point to the Department of Justice’s renewed focus on misconduct linked to cartels and transnational criminal organizations, the federal material support statutes triggered by terrorist designations, and strict liability sanctions exposure following the Office of Foreign Assets Control’s actions against criminal syndicates across Latin America. Among the practical steps they highlight are risk-based segmentation of counterparties, tailored diligence for suppliers and customers, lifecycle monitoring that includes a retrospective review of legacy relationships, and governance controls that pair screening technology with human judgment.

As María, Brandon, and Ananda note, “the legal principles underlying third-party due diligence have not fundamentally changed,” but “what has changed is the nature of the risks that regulators increasingly expect companies to identify and manage” given the increasing the range of possible circumstances “in which a single third-party relationship may present exposure under multiple legal regimes.” They encourage companies to reassess whether their existing diligence frameworks are calibrated to today’s enforcement environment rather than waiting for enforcement action.