Continuing to address the risk of money laundering, let’s go to key controls upon the questions in last article:
a) No matter what type of customer is, make sure you meet that person and make a surprise visit. Meeting that person will help you to confirm it exists and visiting by surprise will diminish the risk of front and shell companies.
b) If your customer is one of the vulnerable sectors to launder money, don’t panic. This only means that you need more information and monitoring. But corroborate how many business lines he has and that they make sense. E.g.: customer owns a bakery shop but also a school and a beauty salon. Keep in mind that expertise is different in businesses and that we all focus in what we are good at.
c) Help yourself by using the Transparency International index like others, to confirm the levels of corruption and money laundering. If the country is high risk you should ask for more information to make sure what kind of risk level you are assessing. This is because it’s more likely to be used by organized crime.
d) If for example: you are a financial institution and your customer is dedicated to education (owns an English school) why should he be interested in trade based services? Unless he has another business but it would be unusual, which brings us back to b).
e) Screen the real owner through any sanction list that applies to your jurisdiction; even intermediaries, representatives. Ask for id.
f) Analyze the behavior and trend of the transactions made and compare it against the industry behavior in which that customer is. Does it make sense?
Don’t forget to obtain the support documentation for every answer and transaction. You can start addressing the money laundering risk based on your scale in high, medium and low.
By Mónica Ramírez Chimal, Partner of Asserto RSC, Mexico City