Due diligence is an essential component of a comprehensive compliance plan which protects companies from the terrible consequences of financial crimes. However, it’s not without dangers, particularly in regions like Latin America, where unique dynamical circumstances demand specialized strategies.

To minimize the risks it is crucial to keep track of the ever-changing factors that could impact an organisation’s due diligence process. These factors could include changes in local regulations, economic trends, or geopolitical events. Staying current with these developments will ensure that your due diligence procedures are appropriate for the task.

If, for instance, you identify an individual as PEP (politically exposed person) It could be necessary to conduct additional due diligence. This typically involves conducting a thorough review of additional documentation and verification methods to establish the source of their wealth and funds and in determining their ultimate beneficial owners (UBO) and analyzing their transactions to determine possible money laundering or other illegal activities.

Depending on the level of risk, you may be able to conduct thorough checks due diligence risk factors on their current business operations. This includes the type and nature of any third-party relationship. This could include looking at contractual commitments to assess whether they pose a compliance risk. It is also possible to engage an outside due diligence expert to assist you in your own review process. These services can often provide access to more comprehensive databases as well as the expertise needed to conduct a thorough risk assessment.