Due Diligence Before Signing an MOU or Government Contract

Confirm the signatory has authority

The most common failure in MOU work is not fraud. It is signing with someone whose office does not have the power to bind the institution. Before signature, verify the entity, the office, and the delegation of authority in writing.

Politically exposed persons are not disqualifying

A PEP match is a risk indicator, not a verdict. Senior officials, their deputies, and close associates appear on PEP lists by definition of their role. What matters is the specific relationship: is the official a counterparty, a beneficial owner of a counterparty, or an unrelated name match?

Treating every PEP hit as a red flag makes legitimate public-sector work impossible. Ignoring the category entirely creates real exposure under anti-bribery law.

Sanctions screening has to be multi-jurisdictional

If your counterparty operates across borders, screening against a single national list is inadequate. OFAC, the UN Security Council Consolidated List, and the EU Consolidated List capture different designations. A party absent from one is regularly present on another.

Document the check itself

For government contracts and MOUs, the record that you performed diligence matters almost as much as the result. Keep the report, the source list, and the dates. If the arrangement is later reviewed, an evidenced check performed before signature is the difference between a defensible decision and an unexplained one.