Development of AML/CFT Systems and Strategic Due Diligence
In the modern global economy, compliance with anti-money laundering and counter-terrorism financing (AML/CFT) regulations has ceased to be a formality. It has become a fundamental requirement for survival and successful operation. For companies, financial institutions, and private clients whose activities involve high-risk jurisdictions or complex cross-border operations, having a reliable compliance system is not just an option but a critical necessity.
Non-compliance with international FATF standards and national regulatory requirements leads to catastrophic consequences. These include transaction blocking, account freezing, multimillion-dollar fines, loss of banking relationships, and complete reputational collapse. Regulators and correspondent banks no longer accept “paper” compliance. They require an effectively functioning internal control system integrated into business processes.
Our service is the development and implementation of customized AML/CFT compliance strategies and systemic due diligence frameworks that go beyond mere “rule compliance.” Our goal is to build sustainable legal protection based on the client’s current risks and the specifics of their business, in order to reduce the likelihood of claims from financial intelligence units and regulatory authorities.
When AML Risks Become Reality?
Many managers and asset owners perceive AML/CTF (Anti-Money Laundering/Counter-Terrorism Financing) as a bureaucratic obstacle until they face real consequences. The lack of preventive protection makes business and capital vulnerable to a wide range of threats.
- Banking “De-risking”: The most common outcome. Banks (especially international and correspondent ones) conduct their own due diligence on their clients. Upon discovering that your company operates in high-risk jurisdictions or has an opaque structure, they simply close your accounts to avoid risks for themselves.
- Transaction Blocking: Your complex cross-border operations will be stopped by the correspondent bank for additional verification, which may drag on for weeks or months, disrupting deals and undermining partner trust.
- Regulatory Fines and Sanctions: Supervisory authorities and financial intelligence units around the world are tightening control. Fines for inadequate KYC (Know Your Customer) procedures or missed suspicious transactions can reach tens of millions of dollars.
- Criminal Investigations: Systematic AML violations can be qualified as aiding in money laundering. This paves the way for criminal cases, extradition requests, and activation of Interpol notices concerning the management and beneficiaries of the company.
- Reputational Damage: Being mentioned in public reports about fines or investigations causes irreparable harm to the brand, deterring investors, clients, and qualified employees.
Building an Individualized Internal Control System
We do not offer template solutions. An effective internal control system that complies with international FATF standards must be created based on a deep understanding of the client’s current risks and business specifics. Our team develops customized AML/CFT compliance strategies and systemic due diligence frameworks in several stages.
Individual Risk Assessment
At the core of everything lies a risk-oriented approach — a key requirement of FATF. Before building protection, we must understand what we are protecting against. Our assessment includes:
- Client Base Analysis: Risk assessment related to the types of your clients (e.g., presence of PEP — politically exposed persons).
- Geographical Analysis: Identification of operations with high-risk jurisdictions (including countries from the FATF “grey” and “black” lists).
- Analysis of Products and Services: Determining how your services can be used for money laundering (e.g., complex corporate structures, cryptocurrencies).
- Analysis of Delivery Channels: Risk assessment associated with remote service or the use of intermediaries.
Development of Policies and Procedures
Based on risk assessment, we create or completely revise your internal regulatory framework. These are not just “papers for the regulator,” but working tools for your team.
This process includes a detailed elaboration of the following components:
- Know Your Customer (KYC) and Customer Due Diligence (CDD) Policy: We develop clear procedures for the identification and verification of clients and their beneficial owners (UBO). We determine when standard due diligence (CDD) is sufficient and when enhanced due diligence (EDD) is required — for example, when dealing with PEPs or clients from high-risk jurisdictions. This directly implements FATF Recommendation 10.
- Monitoring of Transactions and Sources of Funds (SoF/SoW): Creation of procedures for verifying the source of funds (Source of Funds) and wealth (Source of Wealth) of your clients. We also implement a transaction monitoring system to identify unusual and suspicious operations that do not match the known client profile.
- Data Storage and Confidentiality: Ensuring compliance with data collection and storage procedures not only with FATF Recommendation 11 (on record-keeping) but also with personal data protection laws (such as GDPR).
- SAR Filing Procedures: A clear algorithm for employees: what to do when identifying a suspicious transaction, how to document it, and how to file a Suspicious Activity Report (SAR) with the national financial intelligence unit.
Implementation of Technologies and Staff Training
The best policies are useless if they are not implemented.
Technological Solutions: We provide consulting on the selection and configuration of software for AML. This includes systems for automatic client screening against sanction lists and PEP lists, as well as software for transaction monitoring, which helps to detect anomalies in real-time.
Team Training: We conduct specialized training for your employees — from front office to compliance officers. We teach them to recognize “red flags,” correctly carry out CDD/EDD procedures, and understand their personal responsibility within the internal control system.
Strategic Due Diligence
In addition to regulatory AML, we offer services for conducting Strategic & Enhanced Due Diligence. This service is essential for companies, financial institutions, and private clients when entering new markets, concluding M&A deals, or onboarding key partners.
Unlike standard CDD, our goal is to identify hidden reputational, political, and sanction risks. We answer the questions:
- Who really is your partner?
- What is the real source of his capital?
- Does he have any hidden connections with politically significant individuals or individuals under sanctions?
- Does the deal pose any risks to your reputation?
This proactive approach protects not only from regulators but also from toxic alliances that can destroy the business from within.
Our Advantages: Interdisciplinary Protection
The choice of an AML/CFT consultant determines the resilience of your business. It is not enough to simply know national regulatory requirements; it is necessary to understand how regulators, financial intelligence units, and correspondent banks think.
We do not just help you comply with the rules. We build sustainable legal protection. Our interdisciplinary approach brings together lawyers, financial investigation specialists, and risk management experts. We develop customized AML/CFT compliance strategies based on the client’s current risks rather than formal templates.
We focus on the practical implementation of international FATF standards (including Recommendations 10, 11, and 15 on new technologies) in such a way that it aligns with the specifics of the client’s business. This reduces the likelihood of claims from financial intelligence units and supervisory authorities and transforms compliance from a cost center into an element of strategic asset protection.
Protect Your Business Today
In today’s financial environment, reacting to compliance issues after the fact means guaranteed losses. Being “proactive” is not just a trendy word but the only effective strategy.
Do not wait until your correspondent bank blocks the transaction, regulatory authorities initiate an inspection, or financial intelligence units take an interest in your operations.
Contact us today to conduct an audit of your AML/CFT system, develop a reliable internal control system, and build sustainable legal protection for your business and assets on the international stage.
FAQ
We already have an AML policy. Why do we need your services?
Having a policy on the shelf is not the same as effectively implementing it. Regulators and banks do not check for the mere presence of a document but rather how your internal control system works in practice. Does it identify risks? Is your staff trained? Is your policy based on a real risk assessment (Risk-Based Approach), or is it just a downloaded template? We conduct an audit and a “stress test” of your existing system to identify its weaknesses before the regulator does.
We are not a bank; we are a trading/IT/consulting company. Does AML concern us?
Absolutely. AML/CFT requirements have long extended beyond financial institutions. They apply to “designated non-financial businesses and professions” (DNFBP), including lawyers, real estate agents, dealers in precious metals, and casinos. Moreover, even if you are not formally subject to regulation, any bank through which you conduct your complex cross-border operations will require you to have a transparent AML structure. Without it, you simply won’t be allowed to conduct international business.
What is the Risk-Based Approach?
This is a key principle of FATF standards. It means that you must identify and assess your risks of money laundering and terrorist financing. After that, you should apply compliance measures proportionate to these risks: stricter measures (Enhanced Due Diligence, EDD) for high-risk clients and transactions, and possibly simplified ones (Simplified Due Diligence, SDD) for low-risk cases. This allows for the efficient allocation of resources instead of checking everyone with the same intensity.
