In South Africa, the onus to perform due diligence procedures is on institutions, not the criminals or the government.
By mid-2017, an estimated 155 acts of terrorism since the start of the year had claimed hundreds of victims in several nations around the world. Terrorism and international organised crime have become more and more publicised since the attacks on the Twin Towers in New York on 11 September 2001. Despite laws against terrorism, the heinous acts continue to occur with backing sourced from at least four primary types of terrorist financing. These include Illegal activity, such as drug trafficking, smuggling, extortion and money laundering; legal activity, state sponsorship (in some cases) and through public donations.
This increasing number of incidents highlights the need for stronger counter-terrorist financing and anti-money laundering regulations.
In South Africa, the onus to perform due diligence procedures is on institutions, not the criminals or the government. “An example of AML regulations would be those that require institutions issuing credit or allowing customers opening accounts to complete a number of due diligence procedures to ensure that these institutions are not aiding terrorism and money-laundering activities,” said Rudi Kruger, General Manager of Risk Solutions at LexisNexis Data Services. “Companies are now more aware of the financial and reputation implications of non-compliance, driving more enhanced due diligence on high risk customers,” he added.
Kruger said the following points are vital in the due diligence process:
- Thoroughly understand the companies and individuals with whom the company interacts and/or does business
- Better comprehend the complex relationships and affiliations between companies and individuals or companies and other companies
- Research and stay up to date on key developments with respect to key clients, suppliers, contractors, or partners
- Research and vet a potential investment opportunity, partnership, acquisition, or other strategic alliance
- Ensure the ongoing financial health of key suppliers, clients, or other entities the business relies upon
- Avoid the legal penalties, costs, and reputational damages of being associated with unethical or criminal associates
Assisting with due diligence and investigations into Anti Money Laundering (AML) and Counter Terrorist Financing (CTF) are three complementary solutions from LexisNexis Data Services. The solutions, Diligence Spotter, Batch NameCheck and Lexis Diligence work best together to perform the necessary due diligence in the areas of risk, compliance and fraud.
Lexis BatchNameCheck is a high volume entity screening and monitoring solution that enables ongoing batch screening of new and existing third parties, customers and other entities. Batch Namecheck automates the screening process against critical global watch lists, sanctions and PEP databases.
Lexis Diligence helps to mitigate operational, financial, legal, and reputational risk by providing the tools needed to understand suppliers, partners, acquisition targets, contractors, resellers, grant applicants, and other associates effectively and efficiently.
Lexis DiligenceSpotter is an end-to-end workflow solution that integrates third party screening, risk assessment, ongoing monitoring and case management into one, intuitive tool. With Diligence spotter it is possible to capture a real-time, daily assessment of risk in order to escalate due diligence as needed.
About Rudi Kruger
Rudi Kruger is the General Manager for LexisNexis Risk Solutions. He is responsible for African and International risk solutions. He has 11 years banking experience with strong focus on trade services, risk and compliance. He successfully completed various courses within the banking industry, as well as IOB Certificate in banking and completed a MAP program at WBS in 2014. Rudi is responsible for the execution of new business development, strategy and sustainable growth, by introducing new products offering and enhancements to the Sub Saharan African market.