AML/CFT Sanctions

AML/CFT Sanctions

AML/CFT Sanctions against Russia require businesses to review their existing clientele (B2B and B2B) and identify risks that require an update and/or greater controls in place to manage the wide ranging AML/CFT sanctions imposed upon Russia.

Now is the time for businesses to test operational policies, procedures and controls to ensure compliance with AML/CFT laws.  Businesses should be checking underlying business links to Russia territory including asset location, business payments,  customer place of birth, customer residency status.

Russia, like Iran and North Korea, will be looking for innovative options to bypass the reach of economic sanctions.

Previously Iran traded gold and leased ships from lower risk countries to move cargo.  By flying under a leased ship registered under a low risk country, the red flag may not be so obvious.  

Customer Due Diligence

Many countries are now operating under Risk Based regulations.  The risk based approach requires an objective reasoning to decision making, including customer due diligence levels. 

When applied to customer due diligence, the risk based approach means identifying the beneficial owners and controllers, and the true underlying beneficiaries. Depending on the circumstances (that is the risks presented), this may require reviewing several layers of an ownership structure.  

AML RegTech

Online Trading

Online trading includes all types of payments services, from retail online stores, FX trading platforms, invoice payment services, secondhand online auctions and online games and social networks.

When carrying out customer due diligence, businesses must always understand the nature and purpose of the customer’s business. This incorporates knowing your customer’s customers

Know Your Customer’s Customer (KYCC) means understanding their –

  • typical client types;
  • geographic reach;
  • products/services offered;
  • methods of payment and/or method for delivery of service(s).

The more knowledge that a business has of its customer underlying relationships, the greater the capability to make decisions on inherent risks and/or real risks from the underlying business relationship.