Know your customer

Victoria
By Victoria March 11, 2013 12:43

Know your customer

An airline is reported to being under investigation for any involvement in the sale of one of its older aircraft that ended up in Iran. Financial services firms are only too aware of the importance of compliance with US economic sanctions – Standard Chartered was fined $300m in November last year for sanctions breaches. Although banks are in the spotlight for ensuring they have effective anti-money laundering and sanctions compliance systems and controls in place, all firms need to be aware of the rules in this atmosphere of increased regulatory scrutiny. Although your KYC screening on direct customers may be adequate, ensuring any third parties are also absent from sanctions or PEP lists is critical. When dealing with big ticket items such as aircraft and engines, firms of all sizes need to have in place effective systems and controls that have been independently verified to ensure any gaps or weaknesses can be identified and fixed. In some cases, firms should install transaction monitoring solutions to filter payments and prevent or detect money laundering on large transactions. Equally all employees, particularly those involved in the sales process need to be sufficiently trained to raise awareness of the dangers of non-compliance with US sanctions and anti-money laundering rules.
Although compliance can be costly, the severe financial damages from regulatory fines and the ensuing reputational damage would be much worse.

Victoria
By Victoria March 11, 2013 12:43
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