Using a Competitor’s Regulatory Breaches
It is a truth that people can be very honest in a dishonest way.
Governments are on a mission to find breach of sanctions, money laundering laws, insider trading, and environmental laws; in short any act of regulatory non-compliance.
A new wave of CI investigations is looking into a competitor’s short comings, such as a selling to a sanctioned person or entity. A refined product and lubricant supplier was looking at new opportunities and answered a post about a company in Venezuela looking for large quantities of a particular grade and type of a thixotropic lubricant. A short investigation and search for which the end user might have left the company – uneasy. In particular, the end user required that all of the MSDS (Material Safety Data Sheets) be provided in a doc format, not pdf or written further that they be provided in English and not Spanish as that would be required for Venezuela. Further payment would come from a bank in then UAE. This all sounded too odd as the type of lubricant was only for extreme applications. The order was turned down.
The company however monitored exports to Venezuela for just such an item and within 45 days a large shipment was sent from a competitor to Venezuela, Puerto de La Guaira with a shipping broker as the buyer. A few quick calls to the shipping company in Venezuela discovered that the end destination was not Venezuela but to a company located in the UAA but to be delivered to another shipping agent at the Negin Port, in Bushehr Iran.
The information they had on the potential customer and the recorded calls to Venezuela were delivered to the Office of Foreign Asset Control and the competitor was not only sanctioned but one of the officers of the company was criminally convicted.
While this is a simple and very dramatic event it is illustrative of the opportunities presented by a competitor who, when monitored or watched with some skill and regularity, can be found to have breached a law. Good documentation and disclosure to the regulatory authorities deputizes the regulators to dispatch your competition or at a minimum waste a great deal of their time and efforts.
