PEP in disarray | Compliance

Si l'expertise technique et la solidité financière de VOLCO sont indéniables, la présence de trois PEP parmi ses principales parties liées et les récentes controverses appellent à la plus grande vigilance

In February 2023, the compliance department of a French industrial group called on SKAN1 to assess the integrity of a potential new partner in the defense and aerospace sector. Our thorough analysis enables us to draw up a detailed profile of the company and to highlight certain essential points of attention to secure the future relationship.

Mission context :

Before entering into this strategic commercial partnership, our client, subject to the Sapin II law, wishes to know more about the compliance and business ethics of this company that is influential in its markets. The challenge is to quickly obtain a detailed profile on the integrity of this company, and to measure the risks associated with a possible entry into a business relationship. 

Result of our investigations :

Behind the facade of a solid and well-established company hides a more complex profile than meets the eye. This SCANDINAVIAN Belgian flagship of the defense industry has recognized expertise in advanced technology solutions for aerospace and security. Its impressive order book, which includes several industry giants, and its 10-digit turnover testify to robust financial health. Its governance, which is linked to a foundation, seems transparent at first glance.

But our investigations reveal some worrying grey areas. The company has been embroiled in several recent controversies: a contract worth tens of millions of euros awarded by the government without a call for tenders, allegations of war crimes related to sales of equipment to Saudi Arabia in the Gulf despite a European embargo, and allegations of espionage. Even more disturbing, three of its main related parties are politically exposed persons (PEPs) in their country, raising questions about potential conflicts of interest. Persistent criticism of the lack of transparency in its anti-corruption policies completes this mixed picture.

Benefit for the customer :

Thanks to our SKAN-3X assessment, the client now has a clear view of the issues and risks associated with this potential partnership. While VOLCO’s technical expertise and financial strength are undeniable, the presence of three PEPs among its main related parties and recent controversies call for the utmost vigilance.

The Skan1 analysis allows the client to anticipate and prevent possible negative repercussions, both in terms of reputation and regulation. With this information, the client can now consider the continuation of its relations with VOLCO with greater peace of mind, by putting in place the necessary safeguards:

  • enhanced monitoring of media and legal developments,
  • a thorough verification of the compatibility of the PEPs’ public functions with the proposed project,
  • and a strict compliance framework to support the business relationship.

A cautious approach that does not jeopardize the prospects of collaboration with a solid partner with recognized skills.

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