Cross Border Hiring Raises Compliance Challenges As Businesses Strengthen Due Diligence Measures

Sameer Kumandan, MD of SearchWorks

Meetings are held via video calls, documents are accessed and shared in the cloud, and the entire team collaborates across time zones. Today, a globally distributed workforce has become the norm, as companies increasingly build teams across continents to access the best talent wherever it may be.

But hiring across borders introduces a new layer of complexity when it comes to vetting candidates and managing risk. When an employee has lived or worked in multiple countries, verifying their identity, running background checks and ensuring compliance with regulations such as the Financial Intelligence Centre Act (Fica) becomes far more complicated.

Fica regulations are largely designed around verifying individuals and transactions within a domestic context. But when employees, contractors, and clients operate across borders, this can create additional compliance challenges.

Accountable institutions must adopt more sophisticated identity verification, screening, and ongoing monitoring processes than would typically be required in purely local hiring environments.

Key due diligence steps when hiring international teams

Accountable institutions cannot view hiring simply as filling a role. Conducting thorough due diligence during staff onboarding is a legal requirement and essential to safeguard against regulatory penalties, reputational damage, and operational risks.

By conducting thorough background checks and verifications, companies can ensure they hire individuals who are not only skilled but also trustworthy and compliant. Below, I’ve outlined a few key steps accountable institutions can take to ensure that having a global team doesn’t put them at risk.

1. Establish clear hiring policies and controls

HR teams should develop formal, documented policies for hiring employees outside the country. These policies must include things like how to authenticate different identity documents and assess remote work eligibility.

As part of this, it’s important to clearly establish which positions require enhanced screening because they involve access to client funds, financial transactions, or sensitive data.

It’s also critical to define the chain of responsibility when hiring internationally to ensure that every step, from vetting to approvals, is done with compliance in mind.

2. Implement compliance-focused training for hiring teams

HR and recruitment teams must understand the specific risks that come with international hires.

Training should cover everything from identifying red flags in resumes or references to recognising potential sanctions or criminal history issues.

If HR is unaware, they may onboard someone with a history of financial crime or sanctions, inadvertently exposing the organisation to regulatory penalties.

In line with this, international hires should receive comprehensive Fica and anti-money-laundering (AML) training to ensure they know about the risks of non-compliance.

3. Conduct enhanced background checks

When hiring international candidates or remote workers, organisations should broaden their due diligence to include global databases and international watchlists.

Access to systems such as those maintained by Interpol can help identify individuals who may be flagged internationally, ensuring that organisations are not relying solely on local records when vetting new hires.

4. Prioritise ongoing monitoring

When teams are widely distributed, business leaders have limited visibility of daily activities.

As such, regular checks and continuous monitoring are essential to ensure that employees in critical roles remain compliant with FICA and that any risks are identified and addressed promptly.

5. Maintain clear audit trails

As noted above, when visibility into day-to-day activities is limited, a well-maintained audit trail is essential.

All identity verifications, sanctions checks, CDD/KYC* documents, and approvals must be securely stored and properly organised. These records serve as evidence that the organisation carried out all necessary steps to comply with FICA obligations.

As the world of work becomes more distributed, the systems used to verify and vet people must go global as well, offering employers a consolidated view of a candidate and ensuring that the people they bring in meet both operational and regulatory standards.

By hiring responsibly and carefully vetting international talent, organisations can unlock the full benefits of a global workforce without the risk. This means accessing diverse skills and fresh perspectives, while also limiting possible exposure to financial crime.

* CDD – Customer Due Diligence | KYC – Know Your Customer