Client: A Ukrainian logistics company planning to invest more than USD 5 million in building an international logistics hub in a Central Asian country to expand into new markets.
Task: A comprehensive country risk assessment, due diligence review of the local partner, and evaluation of the security risks associated with international expansion.
Client situation: international expansion risks in logistics
The client identified a promising location and a local partner who promised a “fast start,” administrative support, and favorable land lease terms. Preliminary financial calculations looked ideal. Still, the company’s leadership decided to reduce exposure and commissioned an independent assessment of the operating environment.
SIDCON methodology: how market-entry risks are assessed
To evaluate the cross-border trade risks, SIDCON analysts relied on accumulated experience in intelligence analysis, a local network of contacts, and international connections through the World Association of Detectives (WAD). The research was conducted at three key levels:
Political level: analysis of political stability, the influence of local power groups, and risks for foreign businesses.
Economic and security level: assessment of corruption risks, the shadow economy, threats of рейдерство, and the forced nationalization of foreign assets.
Reputational level (partner due diligence): deep verification of the local company’s beneficial owners, their links to public authorities, presence on sanctions lists, and history of previous joint ventures with foreign investors.
Critical risks identified: sanctions, legal traps, and conflict of interest
The research revealed findings that differed sharply from the “official picture”:
Sanctions risk: the local partner turned out to be linked to persons on international sanctions lists. Cooperation could have led to freezing of the Ukrainian company’s bank accounts in the EU and serious reputational damage.
Legal risk: analysis of local legislation revealed a hidden rule allowing the forced alienation of foreign infrastructure in favor of the state after two years for minimal compensation.
Conflict of interest: the “favorable location” was in fact the subject of a long-running legal dispute between two influential local groups. The client was being used as a third party to legitimize the disputed land plot.
Result: USD 5 million in investments and company reputation protected
Based on SIDCON’s report, the client decided to отказаться from the current market-entry model in this region.
Value for the client:
Investment protection: the company avoided a potential loss of more than USD 5 million through timely risk analysis.
Reputational protection: the company avoided sanctions exposure and preserved its reputation as a reliable partner.
Strategy correction for international expansion: following SIDCON’s recommendation, the client selected an alternative region with more transparent and manageable risks for successful market entry.
Conclusion: why risk analysis is critical for cross-border trade
A new market is always a step into the unknown. SIDCON’s expertise helps uncover what is hidden beneath the surface and turns a risky move into a calculated business decision.