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Terrorist financing gains prominence
29 Aug 2018 8:00 am by Rudi Kruger
- Lexis Diligence
- Money Laundering
- Batch NameCheck
- Diligence Spotter
- FICA Act
In the past 20 years, threats and incidents of terrorism have grabbed global headlines and urged nations to step up laws against not only the act but also the financing of terrorist activities.
In South Africa more recently, the spotlight fell on the threat of terrorism after a spate of incidents in which alleged bombs were placed in shopping centres around Durban. These local incidents as well as ongoing global concerns serve as a reminder to companies that they should do their bit in the fight against terrorism by remaining compliant with the relevant regulations, designed to address Counter Terrorist Financing (CTF) and Anti Money Laundering (AML).
Businesses operating in South Africa are required to abide by the Financial Intelligence Centre Act (FIC Act), which was introduced to fight financial crime, such as money laundering, tax evasion, and terrorist financing activities. As required by the Act, companies are required to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations and take responsibility for ensuring that those they do business with are not involved in illegal activity such as terrorism financing.
In November 2017, it was also announced that government had plans to set up a forum to combat money-laundering and financing of terrorism, which would replace the Counter Money-Laundering Advisory Council (CMLAC). While the forum is yet to be formally established, non-compliance with existing laws and regulations or failure to prevent incidents could result in unlimited fines for companies, jail terms, director disqualification and individuals could be imprisoned for up to 10 years. Companies, therefore, must take measures to ensure they understand their suppliers, partners, acquisition targets, contractors, resellers, grant applicants, customers and other associates effectively and efficiently says Rudi Kruger, General Manager of LexisNexis Data Services.
Relevant measures include:
- Researching and staying up-to-date on key developments with respect to key clients, suppliers, contractors, or partners to thoroughly understand the companies and individuals with whom the company interacts and/or does business.
- Researching and vetting potential investment opportunities, partnerships, acquisitions, or other strategic alliances.
- Ensuring the ongoing financial health of key suppliers, clients, or other entities the business relies upon.
- Seeking information on your potential business associates’ legal history, including local and international cases to determine how litigious an individual or company may be.
- Conducting ongoing screening and monitoring, particularly around high risk third-parties to ensure you are alerted to any changes as soon as they happen.
- Understanding that the onus to perform these procedures is on the institutions, not the criminals or the government and making a commitment to remain consistent.
Meeting the needs of ongoing FICA compliance, LexisNexis Data Services offers a suite of enhanced due diligence solutions for corporate security professionals. These complementary solutions include Lexis®Diligence, Diligence Spotter and Batch NameCheck.
With Lexis Diligence, users get access to comprehensive adverse news, sanctions and extensive warning lists, PEPS, director and shareholder listings, biographical references and directories, and comprehensive legal source material. The solution also enables compliance officers to review data from the UK, EU, US and selected Asian jurisdictions.
With Batch Name Checker, users onboard and identify up to 1 million customers as well as perform enhanced due diligence on high risk customers. Ongoing monitoring functionality allows you to continue to screen individuals on an ongoing basis and flags any new risks. Diligence Spotter provides an automated due diligence on high risk individuals against multiple data sources such as sanctions, watch lists and adverse media using seven key words.
Together, they are useful tools during due diligence and investigations into Anti Money Laundering (AML) and Counter Terrorist Financing (CTF) and have the ability to help safeguard businesses from risks.
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