There is no doubt that the advancements in technology are changing the way we do business. Technology has a big influence on our daily activities. Automation has also undoubtedly helped reduce overdependence on human resource and its related overhead costs.

How can compliance officers use automation to their advantage?

The development of new technologies in the compliance space, like ComplianceDesktop® | Compliance Technology Platform and IntegraWatch® I Compliance Screening, have hugely contributed to the efficiency and effectiveness of how we conduct due diligence, undertake investigations, perform know-your-customer checks, manage risks or track suspicious financial transactions.

However, compliance officers continue to face the challenge of conducting FCPA compliance due diligence or AML/CFT investigations in under-developed, high-risk markets.

Some characteristics of high-risk countries

Due to underdeveloped infrastructure, poor governance, or prolonged conflicts, third parties operating in certain countries pose a higher risk to your business. Most of these high-risk countries, mainly found in Africa, Asia, Middle East and Latin America, require a tailored risk assessment and management approach. Such tailored risk management programmes should always include specialist ongoing monitoring. This is because, in most high-risk countries, access to information is usually heavily censored or state-controlled, the media is not pluralised or fully independent, corporate registries are not digitised, record keeping is very poor and government officials are lowly paid which leads to high incidents of corruption, bribery, fraud and money laundering. Lawlessness is inherent in most of these countries such that business decisions are influenced by political patronage or how well one is connected to those in political office. There are also certain practices that are considered normal in some of these countries which constitute integrity risks if weighed on a global compliance scale.

Why ongoing monitoring is essential for your business

Standard due diligence can uncover numerous red flags regarding a target entity or individual however in underdeveloped, high-risk countries like: Ethiopia, Ecuador, Syria, Myanmar, Pakistan or Indonesia, you need a due diligence solution that goes beyond one-time risk reporting.

Once the initial IntegraCheck® | Integrity Due Diligence report is issued, your business can request ongoing monitoring as an add-on for business partners in high-risk countries or high-risk industries at an additional fee. Alternatively, your business can request ongoing monitoring at the time of ordering our IntegraCheck® | Integrity Due Diligence report at a combined fee. Here is why ongoing monitoring is essential for your business:

  • Ongoing monitoring also applies to high-risk targets operating in low-risk markets. If you believe that your business partner operating in a country like the United States or the United Kingdom poses high risks to your business, you can order ongoing monitoring.
  • The Red Flag Group’s ongoing monitoring service can be tailored to your needs and risk concerns. This ensures that your business is kept informed, of any change or development through negative media coverage in ongoing legal or integrity issues involving your third parties.
  • Ongoing monitoring is an economical way to identify risks or minimise potential risks which could affect your reputation and integrity.
  • Ongoing monitoring will alert you of any adverse media finding on a weekly, quarterly or annual basis depending on your requirements. You can also request a review of negative media focusing on a specific timeframe if you believe that a wrongdoing may have occurred during that time.
  • Ongoing monitoring checks through proprietary databases as well as through thousands of subscribed and access-free global news sources to review any negative reportage or information involving your target entity or individual.

Ordering ongoing monitoring at the time of requesting your due diligence or after the issuance of the due diligence report will help you act fast and suitably manage any potential risks from escalating. It is therefore important that you always include ongoing monitoring if you are not certain of the risks that your third parties in risky markets pose to you.