Due diligence is an essential element of a comprehensive compliance plan that safeguards businesses from the terrible consequences of financial crimes. But it’s not without its risk, particularly in areas like Latin America, where unique dynamics demand tailored strategies.
To minimize the risks It is essential to be aware of changes in the environment that could impact an organisation’s due diligence process. These can include changes in local regulations, economic trends, or geopolitical events. These factors will assist you in ensuring that your due diligence procedures are current.
If, for instance you identify a person as a PEP (politically exposed person) it could be necessary to perform more due diligence. This typically involves reviewing additional documents and confirming methods to establish the source of their wealth and their source of funds. It also involves identifying the ultimate beneficial owner (UBO) and looking at their transaction patterns to identify money laundering or illegal website link activities.
Based on the risk, you may be able to conduct thorough assessments of their current business operations, including the type and nature of any third-party relationship. You might also wish to examine contractual commitments to determine whether they could pose a risk of not being in compliance. In addition, you may want to consider engaging a specialist third-party due diligence service to aid your own review processes. These services often have access to more comprehensive databases, and may also provide assistance in conducting a thorough risk assessment.