News
Print Article

The Five STEPS to keeping CDD TIGHT

14/04/2022

A good friend of Comsure's uses TIGHT [an acronym] as a CDD control. I have taken his TIGHT rules and amended them to be more expansive for all enhanced risk clients.

Managing the risk by keeping it TIGHT

  • "Understanding the network of an enhanced risk client [e.g. PEP] is like peeling the layers of an onion.
  • A business needs to understand every layer to understand its overall risk.
  • But armed with the acronym TIGHT, companies [and the compliance teams] can monitor and remediate enhanced risk clients,
The Five STEPS to keeping it TIGHT

First, a business needs to identify the 'T' – TYPE

  1. The type of client and the ER [enhanced risk triggers] – ER clients [ERCs] include
  • PEPs and their family and associates
  • Complex legal persons
  • A Person connected to higher risk countries
  • A person who is representing another [your ultimate client] who you never meet

2. So, companies need to employ identification using a well-regarded and detailed database such as ACURIS.

ACURIS IS Comsure preferred data provider - https://www.acurisriskintelligence.com

3. Also, ask questions. Do we know enough – have we asked and verified?

  • Adverse media surrounding them?
  • How did they get to their position?
  • How did they earn so much money?
  • And what is their source of funds?

4. Always Go Further.

  • Always Be Curious in your due diligence efforts where ERCs are concerned.
  • Your risk-based approach determined the nth degree of CDD/EDD

Next is the 'I' – the Industry

  1. The Industry that the ERC has earned their money in, together with any family and business associates linked to it.
  2. Look for higher risk sectors such as
  • Hydrocarbons,
  • Mining,
  • Construction,
  • Water Resources,
  • Healthcare,
  • Armaments,
  • Telecoms,
  • Railways,
  • Road construction etc.

3. Global corruption prosecution cases tell us these industries carry the highest risk.

Then there is the 'G' – Geography

  1. Geography and jurisdictional awareness.
  2. Most of the Pandora PEPs accused and investigated for corruption and money laundering are from highly corrupt countries.
  3. So you need to pay attention to ERCs in countries in the lower quartile of the Transparency International list of
  • The Perception of Corruption (PCI) countries.

The 'H' in our acronym stands for History.

  1. So, has the ERC, or the introducer or family member, had any previous allegations against them?
  2. Have there been
  • Any public compliance failures at the companies used in the Transaction or connected with the ERC?
  • Any previous wrongdoings or internal controls issues?

3. Is their lawyer

  • Under investigation by the Solicitors Regulatory Authority, or
  • Have they represented anyone prosecuted for financial crimes such as tax evasion or money laundering?

4. These are some of the many red flags, albeit not all red flags

And finally, the 'T' stands for Transaction.

  1. What are the details of the Transaction?
  2. And who are the parties detailed as part of the Transaction –
  • The beneficiaries, trustees, advisors, lawyers, and
  • Last but by no means least, the agents

Read Robs thoughts

COMSURE SERVICES

The Team

Meet the team of industry experts behind Comsure

Find out more

Latest News

Keep up to date with the very latest news from Comsure

Find out more

Gallery

View our latest imagery from our news and work

Find out more

Contact

Think we can help you and your business? Chat to us today

Get In Touch

News Disclaimer

As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.