Latin America Due Diligence Risk Factors

Due diligence is one of the most crucial elements of a comprehensive compliance program, shielding organizations from the devastating effects of financial crimes. It’s not completely free of risk particularly in regions like Latin America where unique dynamics require tailored strategies.

To limit the risks, it’s essential to keep track www.getvdrtips.net/angel-investor-due-diligence-checklist/ of the ever-changing factors that could impact the due diligence process of a company. These include changes to local regulations as well as geopolitical and economic trends or even the proliferation of new methods and technologies. Staying current with these factors will ensure that your due diligence processes are appropriate for the task.

For instance, if a risk assessment identifies an individual as a politically exposed individual (PEP) then you might need to carry out enhanced due diligence on them. This usually involves checking additional documents and confirming methods to determine the source of their wealth and their source of funds. It also includes identifying the ultimate beneficial owner (UBO) and analysing their patterns of transactions to detect money laundering or illicit activities.

Depending on the level of risk, you may also want to perform detailed assessments of their current operations. This includes the type and nature of any third-party relationship. You might also want to examine contractual obligations in order to determine if they pose a risk of not being in compliance. You may also think about engaging a third-party due diligence expert to aid in your review process. These services usually provide access to more comprehensive databases and have the expertise to conduct an extensive risk assessment.