Compliance professionals are aware that substandard anti-money laundering (AML) processes and procedures and insufficient know-your-customer screening can open the floodgates for financial crime. Even with this knowledge, the high-profile scandal engulfing Denmark’s largest financial institution, Danske Bank, is a vivid reminder of the monumental scale of legal and reputational risks that arise from inattention to internal controls.
Our study of the impact investing diligence space revealed scores of complex and unresolved questions about measuring the tangible, and not-so-tangible, concepts that make up the ethical investing picture. And it inspired us to create IntegrityRisk ImpactCheck.
The US Department of Justice (DoJ) Criminal Division’s recently updated guidance for white-collar prosecutors — about evaluating corporate compliance programs — offers a roadmap for companies to pressure test whether their compliance policies meet defensible standards of care.
Recent developments on the US and foreign law enforcement fronts, alongside signals of a potential shift in Bank Secrecy Act (BSA) obligations, renew pressure on entities to ensure that the quality of their beneficial ownership compliance and third-party screening practices meets rising expectations.
Geopolitical upheaval, simmering trade wars, and shifting regulatory and legal norms demand thoughtful recalibration of business risks. They also require diligence and investigative capabilities that are agile and up to date.
The execution of a smooth third-party screening plan can quickly get tangled up in costly multi-vendor complexities. First, there’s the task of absorbing output from one vendor for initial, high-volume screening. Then, getting clarity on the output from the first screen about the subjects requiring a closer look. Next, securely handing off the data on subjects that require a deeper dive to a reliable diligence provider. Finally, monitoring all subjects going forward.
Recent data indicates that there are over 125 open FCPA-related investigations — across 56 industries — into violations of the US federal law prohibiting bribery payments to foreign officials. Those numbers, however, only tell a small part of the story.