Hi hateusernames,
My comments below and advice to you may sound harsh. Please know that I am saying them from a place of love, caring, and support.
OW will not let him go.
1. Frankly, I don't believe him. He's spent 16 years lying and cheating and it sounds like his most effective skill/coping mechanism is playing the victim when he's caught or when he's challenged with anything else in his life. This is a common mechanism employed by cheaters once caught. They see the BS's understandable anger/hatred/resentment of the OW and use it to paint a certain narrative which results in the WS and the BS teaming up against the big bad AP. It takes the pressure/blame off the WS and puts it on another person. "I wanted to end it but I couldn't. I've been so miserable with her, I'm so glad its all out on the table now. If only I'd known what a terrible person (s)he was, I never would have had an affair. Unlike him/her, YOU are so kind and caring and considerate It wasn't me reaching out to her (like an addict separated from their drugs), it was her reaching out to me! (A perfect cover when continued communication is discovered! You can't leave me now, I can't live without you. . He knows by now that you are probably a caretaker at heart and that you will not leave him or "be mean" to him when he's in crisis. Either that or he's feeding her a different story and using this as an excuse when breaches of no-contact are discovered. I would not put this past him.
2. As much as this is him being manipulative in order to control your behaviour, its also a YOU problem. I agree with Bigger that you are enabling his behaviour. This cycle of drama/victimhood, is an endless cycle that you have likely willingly or unwittingly participated in throughout the relationship. As long as the pattern continues, he will continue. For the sake of yourself and your children, you desperately need to break this cycle. Stop trying to fix his problems. When men are prone to fixing, we call this "knight in shining armour" (aka KISA) syndrome/complex (also known as white knight syndrome or hero syndrome). There is certainly a female version of it and my guess is that it will sounds familiar to you. It's essentially when a person, for whatever reason, is attracted to a partner with problem and they get an ego boost/sense of identity from fixing/saving/helping their partner (who, by the way, always seems to be in some sort of crisis). Female white knights tend to be attracted to men with addictions and abusive patterns (sound familiar??), and often have a strong fear of abandonment. Its an unhealthy dynamic and your constant rescuing is done at the expense of your well-being. It prevents you from having healthy and fulfilling relationships that don't involve round the clock drama. I encourage you to read up on this and to discuss it with your IC. I'll do Sisoon a favour and also recommend you read up on the Karpman drama triangle. Your fixer tendencies will not disappear overnight, but identifying them and understanding them is the first step in breaking the cycle.
3. He's a grown ass man. He apparently is capable of running his own business. He got himself into this mess, and he is perfectly capable of getting himself out. She lives an ocean away, he can avoid her, he can ignore her messages and continue blocking her accounts. If she is indeed feeding off the drama, the best thing he can do is stop responding to her and giving her exactly what she wants. If she is stalking him and issuing threats, and he is actually worried about it, he can go to see a lawyer and seek a restraining order or injunction. Yes, it can be done internationally - it's much more complicated, but again, he was fully capable of embezzling money/time from the business and your marriage and kids in order to carry out elabourate international affairs, he can certainly figure this out too.
..is threatening him with the release of evidence of their relationship that she has saved unless he continues the relationship with her.
4. So let her. Unless she's a giant celebrity with a massive following (in which case, it'll probably hurt her more than it hurts him), who is going to notice or care? You obviously, but at this point, it's probably not going to change much. I think I recall that your kids are young, presumably they will be largely oblivious. But even if they aren't, they are one day going to become aware of the fact that their father is a lying cheater. You can't protect them from that indefinitely and like I said you need to stop trying to save him. Who would she tell? He is is own boss, so his job is safe. Who else is there, that doesn't already know, that would actually care. People knowing that you are a lying cheater is a natural consequence of being a lying cheater. Let him face a consequence. If she starts posting stuff online or contacting his customers/clients directly, I think your ability to seek a restraining order or injunction just got better.
This would hurt my children and ruin the business we have built together.
5. How is it actually going to hurt the business? Like actually. This sounds like catastrophizing. Again, I can't imagine anyone noticing or caring. If his business hinges on his integrity and fidelity to his wife, he's clearly in the wrong business. Again, this is a him problem and a natural consequence of his own actions. Again, this isn't your problem.
6. I also highly doubt she'll do it. Right now she has something to hold over him to keep him in communication, once she plays that card it'll put the nail in the coffin of their relationship and it gives her nothing to hold over him anymore. Call her bluff.
7. I'm glad you're separating. I encouraged you to do so in another thread of yours. The first step is to disengage. Please read about the 180. Detach detach detach.