Latin America Due Diligence Risk Factors

Due diligence is among the most essential elements of a holistic compliance program that protects organizations from the ravaging consequences of financial criminals. But it’s not without its dangers, particularly in regions like Latin America, where unique circumstances require specialized strategies.

To mitigate these risks it is crucial to keep track of the evolving factors that can affect an organisation’s due diligence process. These may include changes in local regulations, economic trends or geopolitical events. These factors will assist you in ensuring that your due diligence procedures are up-to-date.

For example in the event that a risk assessment identifies an individual as a politically exposed individual (PEP) You may have to perform more due diligence on them. This typically involves checking additional documents and methods to establish their source of wealth and money. It also includes identifying the ultimate beneficial owner (UBO) and analysing their transactions patterns to determine if they are involved in money laundering or illegal activities.

Based on the level of risk, you may also want to conduct detailed checks of their current business operations, including the type and nature of any third-party relationship. You may also want to look over contractual commitments in order to determine if they pose an issue of non-compliance. Also, you might consider involving an expert third-party due diligence service to support your own review procedures. These services often offer access to more comprehensive databases and can assist in conducting an extensive risk assessment.