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ARTICLE · 29 JUNE 2026

Why Diligencing Compliance Processes Is Critical In Defense And Dual-use Investments

A&O Shearman
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Close interaction with governments and intermediaries places defense companies at heightened risk of bribery, corruption, and related financial crime.

GlobalCriminal Law
Adam B. Schwartz
Adam B. Schwartz
Amy Edwards
Amy Edwards
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Close interaction with governments and intermediaries places defense companies at heightened risk of bribery, corruption, and related financial crime. Here we explain how investors must assess not only the existence of compliance frameworks, but whether they are effective in practice and aligned with evolving enforcement expectations.

Summary

Effective due diligence of defense targets requires assessing not only the existence but also the practical effectiveness of anti-bribery and anti-corruption (ABAC) frameworks, including strong controls over third parties and board-level governance.

Regulatory bodies like the UK Serious Fraud Office (SFO) and U.S. Department of Justice (DOJ) demand data-driven evidence that compliance systems are actively functioning, not just formally in place.

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