Risk Factors for Due Diligence
Due diligence is a vital compliance process that acts as a deterrent against financial crimes such as money laundering and financing terrorists. Due diligence requirements are advancing and it is vital to develop strategies that are tailored to the specific needs of each region while meeting international best practices.
Due diligence may appear to be a time-consuming and tedious task however, it is an important part of doing business. The process usually covers two main areas: sale or purchase of goods and services, and mergers and acquisitions. Due diligence in both situations is carried out to ensure that businesses are properly informed before entering a transaction.
Businesses should investigate the background and reputation as well as affiliations of third parties. This can include a review of internet search results as well as questionnaires and verification via independent sources like business registries and watch list databases. An in-depth analysis of the structure of management is also important. The founders and other top executives are likely to own a greater percentage of company shares, therefore it is important to understand the ownership levels of these individuals. Also, it is worth examining whether they have been selling shares recently.
KYC/Know Your Customer checks are more detailed for high-risk customers, as required by anti-money laundering laws and counter-terrorism financing regulations. This is based on factors such as the jurisdiction where they operate and the nature and amount of transactions they conduct, and the source of the funds used for these transactions. In addition, a thorough review of AML policies and local market reputation through media sources is a good method to further refine risk assessments.
دیدگاهتان را بنویسید
برای نوشتن دیدگاه باید وارد بشوید.