The word ‘compliance’ floats around the business world carrying both positive and negative associations. Business owners who are compliant can associate the word with protection or security, however the thought of compliance may cause headaches among others. So what is compliance? If you’re unsure what it is, who needs to do it and what’s involved, read on. We have all your questions answered here.
What is compliance? Being compliant is ensuring your company is adhering to outstanding guidelines and policies set out by the government. The policies are there to protect businesses from commercial fraud, identity fraud, money laundering and criminal financial activity. A good compliance programme should help prevent errors or failures before they occur or detect them at an early stage. Anti-Money Laundering (AMLs) checks and ID Verification is vital in the Know Your Customer (KYC) policies, and by knowing your customers you can ensure you aren’t dealing with businesses involved in laundering illegal money or committing financial or identity fraud. The bottom line of being compliant is making sure you are paid with legally obtained money by your clients. Corrupt business dealings could leave your business out of pocket, therefore following the guidelines set up by the government can help protect your business.
Who needs to be compliant? For some companies such as banks, financial institutes or any corporations handling large amounts of money such as credit or loans; being compliant with current guidelines is a legal requirement and is punishable if the HMRC has found a business of not complying with their guidelines. All FSC companies are required to be compliant by law, however all companies should take the approach of being compliant as the guidelines are there to protect businesses from dealing with criminal organisations. You could face significant fines and/or be left without being paid if you are dealing with fraudulent companies or directors.
What’s involved? Industries that should take the due diligence approach to compliance are any dealer or company doing business worth over 15,000 euros. Industries such as credit institutions, insolvency practitioners, chartered surveyors, trust service providers, solicitors, estate agents, accountants, tax advisors etc. could be subject to doing due diligence processes by law. If your company in this industry has been found to not have carried out correct due diligence procedures you could face a fine or criminal prosecution. Anti-Money Laundering (AML) checks and ID verification, Politically Exposed Person(s) PEPs and Sanctioned businesses checks are deemed necessary under due diligence guidelines and help to protect a company from fraud.
AML Checks. Money Laundering is the disguise of money from an illegal origin of assets so that it cannot be linked to criminal activity. AML checks are an essential part of ‘Know Your Customer’ (KYC) policies and are becoming increasingly important when preventing identity theft, money laundering and financial fraud. Creditsafe’s AML system has been developed to ensure Anti Money Laundering regulations and meets all the standards outlined as per the Joint Money Laundering Steering Group (JMLSG) guidance. Creditsafe’s online AML Checks will allow you to exhibit good governance with a paperless audit trail, identify clients not physically present and run checks against the PEPs and Sanctions database.
ID Verification. Checking who you are dealing with is very important in business to help combat identity fraud. Creditsafe’s ID Verification is a flexible service designed for organisations that need to verify an individual’s details but do not want to carry out a full AML identity verification check. It is fully configurable to return a simple pass / refer decision based upon data sources and the logic specified by you in seconds, helping you make strategic business decisions, streamline the sign up process and transact with customers quicker.
PEPs and Sanctions. Politically Exposed Person(s) are people or close relatives of people who have a high public status, such as a government official; who pose a higher risk for potential involvement in bribery and corruption. If you are dealing with a PEP, you need to run a check on them as part of the due diligence process. Sanctions are businesses that have been banned from doing business with others. You could face a hefty fine or even a criminal prosecution if your business is dealing with a sanctioned business. With Creditsafe you can search anyone, domestically and internationally so you get the inside information. It’s very simple to search for an individual or a business on our system and you can set your own criteria to search what you require.
Once in our system you can search using the following criteria:
- Sanction – current
- Sanction – previous
- Financial regulator
- Law enforcement
- Disqualified director
- Adverse media
- Corporate registry
We can help you stay compliant in business, click here for more information.