Assessing the AML/CFT vulnerabilities of your company during festive seasons

Ho Ho Ho, Christmas is here, so are Criminals!

Enjoying the festive seasons with a glass of wine and decrease supervision shall make you whine. Festive mode on, this busy time of the year calls for decrease in staffs at the office and less focus on transactions, your organisation may be a target of exploitation.

Red flags:

1. Transfers of amount below the threshold toward new recipient contrary to the entity’s business plan. A real time monitoring is highly recommended under the AML/CFT handbook. Among such monitoring, a comparison of the purpose of the intended transfer with the company’s business activity should be made.
2. Incoming of funds from unexplained sources should also fall under the same scrutiny as outward transfers. It is advisable to cross check the due diligence documents of the company and ensure the receipt of funds is from a legitimate source in line with the business activity of the company.
3. Be wary of third-party funding. As part of a Christmas gift, its quite common that a third party may be making payments. Entities should take precautionary measures for third-party transactions since criminals do try to launder money through third party funding. Hence, the need for conducting CDD on third parties becomes a must.
4. A client may refuse to provide you for additional information/documentation upon request. This is a trigger for Suspicious Transaction Reporting. The MLRO of that entity should consider reporting such activity should the client be non-cooperative, bearing in mind Data Protection as an excuse for refusal to provide CDD should not be the case for non-reporting of Suspicious Transactions.
5. ‘Out of the blue’ clients, such as clients with no relationship with your existing clients / introducer and has no business rationale to conduct business with your organisation may be the kick-start of your investigation.

Knowing Your Customer, ensuring transaction monitoring, implementing a robust compliance framework are major key components to protect your organisation from being exploited by criminals.

To know more, kindly get in touch with us on (+230) 210 3588 or templeconsulting@templegroup.mu