Latin America Due Diligence Risk Factors

Due diligence is a crucial component of a comprehensive compliance program which protects companies from the devastating effects of financial crime. But it’s not without its dangers, particularly in regions like Latin America, where unique dynamical circumstances demand specialized strategies.

To mitigate these risks It is essential to keep track of the evolving factors that can affect an organisation’s due diligence process. These factors might include changes to local regulations or geopolitical events, economic trends or even the rise of new techniques and technologies. Being up-to-date with these trends will ensure that your due diligence processes are up to date and effective.

For instance If a risk analysis indicates that a person is a politically vulnerable person (PEP) You may need to carry out enhanced due diligence on them. This typically entails verifying additional documentation and methods to determine the source of their wealth and funds as well as in determining their ultimate beneficial owners (UBO) and analyzing their transactions to determine possible money laundering and other illegal activities.

Depending on the level of risk, you may be able to conduct thorough examinations of their current operations, including the nature and nature of any relationships with third parties. This could include examining the contractual obligations to determine if they pose a compliance risk. Also, you might think about enlisting a specialist third-party due diligence service to support your own review processes. These services typically provide access to more extensive databases and have the expertise to conduct an accurate risk assessment.

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