Due diligence is among the most critical components of a holistic compliance program protecting organizations from the devastating effects of financial crimes. However, it’s not without dangers, particularly in regions like Latin America, where unique situations require customized strategies.

To minimize the risk to reduce the risk, you should keep track of any changes in factors that could impact the due diligence process of your organization. These factors could include changes in local regulations, economic trends, or geopolitical events. Staying up-to-date with these issues will ensure that your due diligence processes are fit for purpose.

For example, if a risk assessment identifies an individual as a politically exposed individual (PEP) You may require more thorough due diligence on them. This usually means conducting a thorough review of additional documentation and verification methods to determine the source of their wealth and funds as well as the identification of their ultimate beneficial owners (UBO) and analysing their patterns of transactions to spot the possibility of money laundering or other illegal activities.

Based on the degree of risk, you might also want to perform detailed checks on their current business operations. This includes the type and nature of any third-party relationship. You might also wish to examine contractual commitments to determine if they pose a risk of non-compliance. You might also consider engaging an outside due diligence expert to assist your virtual data room service providers own review process. These services often have access to more comprehensive databases, and they can offer the expertise needed to conduct a thorough risk assessment.