Before You Sign: Screening Foreign Investors and Counterparties

Verification carried out after a public commitment can only manage the fallout. This is what to establish about a counterparty while refusing to sign is still an option.

The most common failure in government counterparty vetting is not that checks were skipped. It is that they happened after the signing ceremony. Once a memorandum has been signed and announced, verification can no longer change the decision. It can only inform how the consequences are handled.

This page sets out the sequence, and links to the detailed guides for each stage.

Establish that the counterparty exists as described

Start with registration, because it is cheap, fast and decisive. Every claimed corporate entity should be located in the register of the jurisdiction it claims. For a UK entity that means Companies House, which is free and returns incorporation date, registered office, officers, filing history and accounts.

What to look for is not merely existence but coherence with the pitch. A company incorporated a few months ago, with a single director, no filed accounts and a registered address shared with hundreds of other companies, may be perfectly legitimate. It is not, however, evidence of capacity to fund a multi-billion-dollar programme, and the difference matters.

Registry practice varies sharply across Africa, and that variation is itself something to plan for. See company verification in Africa.

Test financial capacity against independent sources

Stated investment figures are a claim by the counterparty about the counterparty. Independent corroboration means audited accounts, regulated fund filings, named financing institutions that confirm the relationship, or completed projects that can be verified with the client that commissioned them. Letters of intent from unnamed funders, screenshots of balances, and bank comfort letters that cannot be confirmed with the issuing bank directly are not corroboration.

Screen the people, not only the company

Officers, beneficial owners and named intermediaries should be run against the official sanctions lists described in how to check if you are on a sanctions list, and against enforcement and litigation records. Ownership matters as much as designation: sanctions regimes generally reach entities owned or controlled by designated persons even when the entity is not itself listed.

Politically exposed person status among the counterparty's principals is a risk factor requiring enhanced scrutiny, not a disqualification. Treating it as automatic disqualification is both wrong under the FATF standard and unworkable in practice.

Check the pattern, not only the party

Certain pitches recur across countries with the structure intact and only the names changed: an unsolicited approach promising transformational investment, urgency tied to a political calendar, a request for exclusivity or a signed memorandum before diligence, and an advance payment framed as a facilitation or mobilisation fee. Our register of documented fraudulent-pitch patterns records sourced examples. Related reading: red flags in a foreign investor pitch to government and the MOU scam new governments keep falling for.

Sequence the public communication to the verification

Announcements should describe what has actually been established. A government that announces a signed agreement and completes verification afterwards has already spent its credibility on an unverified proposition, whatever the eventual outcome turns out to be. A live illustration of that sequencing question is covered in Botswana's $30 billion question about when due diligence should happen.

Detailed guides

Next step

Compare scopes on report types to choose between an entity report, an individual report and a combined report, then order a report while declining to sign is still available to you.