Latin America Due Diligence Risk Factors

Due diligence is a crucial component of a comprehensive compliance plan that safeguards businesses from the devastating effects of financial crime. There are risks especially in areas like Latin America where unique dynamics require customized strategies.

To limit the risks, you must keep track of any changes in factors which could affect the due diligence process of your organization. These may include changes to local regulations, geopolitical developments, economic trends or even the proliferation of new methods and technologies. These factors will aid you in ensuring that your due diligence processes are up to date.

If, for instance, you identify an individual as PEP (politically exposed person) it could be necessary to conduct additional due diligence. This typically involves reviewing additional documents and methods to establish the source of their wealth and their source of funds. It also includes identifying the ultimate beneficial owner (UBO) and looking at their transaction patterns to identify money laundering and illegal activities.

Based on the risk, you may also want to conduct thorough checks of their current business operations, including the type and nature of any relationships with third parties. You might also wish to look over contractual commitments to determine if they pose a risk of non-compliance. You may also want to consider hiring a third-party due diligence expert to aid your review http://www.getvdrtips.net process. These services often have access to more comprehensive databases, and can provide assistance in conducting a thorough risk assessment.