Money laundering is a massive international problem, estimated to account for around $500bn per year. It affects banking, the futures market, professional services such as accountants, solicitors and stockbrokers, finance houses and building societies.

Money launderers have spread into casinos and other gambling outlets. They target businesses dealing with highly valuable, highly portable goods, such as antique dealers, jewellers and suppliers of designer goods.

They’re to be found wherever large amounts of cash are transferred every day, such as airline ticket sales, travel agents and currency exchanges. And they abound on the internet, targeting any business operating only online and dependent on electronic payment of funds is vulnerable.

So you want to avoid those hefty fines?

There is a wide market and a lot of activity. So what can a business do itself in any of these sectors to mitigate the risk of getting exploited by money launderers, paying hefty fines even when it is a completely innocent party, and facing the real fear of loss of reputation and income?

There are certain stages in the money laundering process that leave criminals particularly unprotected, and this is where companies need to be vigilant. One key area of vulnerability is when cash is actually entered into the financial system and then taken out again.

British anti-money laundering law insists on companies reporting any suspicion of money laundering. Businesses have to “know their customers”. Enhanced due diligence is the answer, involving a series of exhaustive checks on who you are entering transaction with – it digs deeper into people’s backgrounds than ordinary due diligence.

Enhanced due diligence is key

This approach is designed to reassure you that any potential partner, customer or staff member is not there to prey on your company but is the genuine article. It is also – just as importantly – a process that will prevent you from inadvertently breaking the ever tougher array of anti-money laundering laws built up by UK governments, particularly since the crash in 2008.

You cannot afford to be ignorant of any money laundering going on in your businesses – if you don’t know what is happening in your own patch, you’ll only have yourself to blame and the verdict in court will be “guilty”.

Fraudsters a constant threat with IT

Fraud ThreatNow companies have to constantly review any enhanced due diligence techniques to stay abreast of fraudsters and their ability to master new technology. Do you have the time, knowledge and staffing capacity to keep up with the latest computing breakthroughs?

It’s time-consuming but essential if you are involved in large transactions, and meeting major partners remotely, not face-to-face. If they are high risk, such as a politically exposed person (PEP), there is a significant chance of them getting sucked into criminal activity and bringing you down if you don’t keep close tabs on them.

There is thus a strong argument for calling on the services of a corporate intelligence agency such as Blackhawk, with its strong reputation for due diligence overseas.

Monitoring for money laundering never stops

Enhanced due diligence consists of an exhaustive range of checks embracing additional documents, company history and company checks plus other measures to ensure key documents being used in a deal are the genuine article. But once one set of tests has been carried out to your satisfaction, you have to continue monitoring your partners and the databases of PEPs, so you are fully aware of which customers are PEPs at any one time.

You need to have considerable knowledge of your client or partner, such as any previous trading names. Do you know where they operate and, if outside the UK, what is that country’s anti-money laundering policy? Is bribery commonplace – and, if so, how secure is your business? Will you offer just a single core service or add to that with additional products and services?

Blackhawk could be your answer

Blackhawk sees due diligence as an ongoing process of continual risk assessment, so it undertakes checks both before and after a deal. Particularly if you are working with overseas partners, the agency offers access to a comprehensive network of trusted local contacts built up over many years, which cut through what may prove barriers for your own due diligence staff. Blackhawk prides itself on performing a “Rolls Royce” service that is far less expensive than many of its larger competitors.

Dealing with partners abroad in often corrupt, poorly policed jurisdictions is a big ask without sound due diligence procedures in place. Money launderers waiting in the wings will take full advantage if you ever drop your guard. The rewards can be great but only if you can guarantee your reputation will remain intact. Blackhawk could be your answer.

Article Name

How to deal with dirty laundry


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