Financial Crime

Financial Crime and Due Diligence Obligations

Whilst you will be well aware of the obligations to conduct due diligence on your own clients, have you ever thought about who might be conducting due diligence on you, or how your staff conduct themselves when abroad?

Following the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and other measures designed to reduce bribery and corruption levels in business, OECD members and many other countries around the world have introduced various pieces of legislation which affect business significantly.  National laws, including for example, the US Foreign and Corrupt Practices Act, the UK Bribery and Corruption Acts, and the Canadian Corruption of Foreign Public Officials Act, to name a few, introduce significant penalties to firms who become engaged in corrupt practices.  Most laws place specific due diligence requirements on firms and many require firms to introduce procedures and controls, including staff training to reduce the risk of such involvement.

Sator is actively engaged in two aspects of this work

Protecting your firm from becoming involved in financial crime

It is essential your firm (financial services or trading companies) adopts ethical business policies and trains staff in the appropriate way to conduct themselves in order to reduce risks to your business and maximise the opportunity to claim the statutory defences incorporated in many laws.

Just as you have concerns about these areas, your counterparties are equally taking care to defend their own position and will be conducting due diligence on you prior to entering into business relationships.

Providing enhanced due diligence reports for international firms or individuals seeking to do business with Crown Dependency based businesses

Sator provides international clients with bespoke, enhanced due diligence reports on any Jersey, Guernsey or Isle of Man company or individual for the purpose of complying with these Acts.

Overseas companies seeking to fulfil their obligations want a report which covers sufficient information to ensure that the Company and its management are legitimate and socially responsible – that they are a good company to do business with – and they are not in any way misrepresenting themselves.  It is particularly important in the investigation to establish whether the Company and its management are related to any political figures, political causes or controlled by the Government. It is also very important to determine whether there are any reasons to suspect that the Company or the designated principals are involved in any corrupt activities, such as bribery or money laundering, or have connections to organised crime.

Sator can assist you prepare your defences internally and your responses externally.

Sator researches the following facts using legally accessible information:

Corporate records and overview

We provide corporate filings which reflect the legal structure and ownership of the Company. (Are key principals known criminals? Do they have controversial pasts or associations? etc.) Based on the research and facts, the report will include an overview of the Company and its Principal(s).

Operations verification

Verification of the actual business location to ensure that the Company has legitimate business operations and is doing business where it claims. Photographic evidence of the location is included in the report. The report will establish whether the local operation is a “real presence” (e.g. heart and mind of management, premises, staff) or whether it is a managed or “brass plate” operation.

Civil and criminal litigation history

Using publicly available records the report seeks to establish whether the Company and/or its principal(s) have been involved in any civil or criminal matters (either as a plaintiff or defendant) including whether they have had a judgement or fine levied against them.

Credit/financial

The report researches the Company’s financial history, tax liabilities, revenue reporting (where available) with a view to determining whether the Company is financially stable, and whether the principals have filed for bankruptcy on behalf of themselves or a business entity. The company’s record with regard to paying its taxes on time and any types of tax judgements or liens filed against them is also checked.

Press Review

The report includes a search both native language and English press, including local business reports and professional journals, and mainstream media, to determine the Company’s business reputation, any known controversy, major business activities and other social and business relationships of interests. Note: Special emphasis should be placed on identifying any relationship with governmental or political figures/families.

Regulatory information

Does the Company’s business/industry require any special licensing to operate in its jurisdictions of operation and/or is it regulated by any agency? If so, are they compliant with regulations and do they have any history of non-compliance, violations, fines, or complaints?

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