Click Questions to see example responses, some of which include embedded links to reference sources.
Depending on the public profile of the individual or company of interest, the countries with which they have a nexus and other factors, it might be possible to identify information. However, this will be heavily influenced by whether reliable information sources are available:
No. The nature and extent of due diligence to be undertaken is often a matter of risk-appetite:
The approach to adopt requires consideration of where risk may exist, whether broad-based or tightly focused research is needed, the skills required to undertake the required due diligence, and prioritisation of the most important issues.
The short answer is 'No':
Examples of third-party relationships, include:
The Bribery Act 2010 and the Criminal Finances Act 2017 - Both present senior management of a commercial organisation with the risk of criminal prosecution where an associated person is involved in criminality. A 'principal' covered by the legislation would need to ensure appropriate consideration of the risks presented by third parties, when considering the level and extent of due diligence required in, say, an M&A transaction.
The Modern Slavery Act 2015 - Every organisation carrying on a business in the UK with a total annual turnover of £36m or more is required to produce a slavery and human trafficking statement for each financial year of the organisation. The statement should identify steps taken by the organisation to ensure that slavery and human trafficking is not taking place in any of its supply chains, and in any part of its own business’. The statement should also aim to include information about due diligence processes in relation to slavery and human trafficking in its business and supply chains.
Not all third-party relationships present the same level or type of risk. Some may present financial, regulatory, reputation or geographic risk, linked to how and where business is undertaken.
Criminal records are not generally available as public information:
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It's a similar conundrum to the question 'How long is a piece of string?! When researching a person who has only worked at one company, lived in one house and has never been appointed as a company director, s/he will take less time to research than, say, someone else who has worked at multiple companies, lived at several historic addresses and who is (or has been) a director of several companies.
Examples of other factors influencing the length of time required, include:
In summary, many factors influence the time required to conduct research, applicable to individuals or companies:
Common issues encountered include applicants who:
SYSC326 is registered with the Information Commissioner's Office ('ICO') - Registration Number: ZB063950. We process information as part of an Investigatory Services offering:
As noted in ICO Guidance Legitimate interests differs from other lawful bases as it is not centred around a particular purpose (e.g. performing a contract with the individual, complying with a legal obligation, protecting vital interests or carrying out a public task), and it is not processing that the individual has specifically agreed to (i.e. consent). Legitimate interests is more flexible and might in principle apply to any type of processing for any reasonable purpose.
For more on how we process personal data and our compliance with the Data Protection Act 2018 - See Privacy
The nature and types of source vary, depending on work scope. They could include a blend, such as:
See also 'Modular approach (examples) to meet client needs' on our Due Diligence site.
Unfortunately, the answer is 'No'. This means that anti-money laundering customer due diligence processes for high-risk clients, such as PEPs, should include a higher degree of due diligence being exercised, when considering doing business with customers who live in:
As noted in UK Joint Money Laundering Steering Group ('Guidance'): "Firms must take adequate measures to establish the source of wealth and source of funds which are involved in the business relationship in order to allow the firm to satisfy itself that it does not handle the proceeds from corruption or other criminal activity. The measures firms should take to establish the PEP’s source of wealth and the source of funds will depend on the degree of high risk associated with the business relationship, and where the individual sits on the PEP continuum. Firms should verify the source of wealth and the source of funds on the basis of reliable and independent data, documents or information where the risk associated with the PEP relationship is particularly high."
JMLSG guidance also notes:"As part of its Enhanced Due Diligence measures, the firm should consider, on a risk sensitive basis, whether the information regarding source of wealth and source of funds should be evidenced...."
Some PEPs are willing to provide relevant evidence of their wealth, but others may be less forthcoming. In the latter case, firms have to decide whether to on-board (or retain) such relationships involving PEPs, particularly if source of wealth lacks transparency. It may be possible to build a documented profile of a PEP (or other high-risk customer), which provides or informs an objective basis for a firm's senior management to assess identifiable risk.
For more on our Due Diligence services - See Due Diligence Services