Due Diligence Q&A
Why is Due Diligence important?
Due Diligence is a term used in various contexts to describe the process of investigating and evaluating a business, investment opportunity or any subject matter before entering into a transaction. It can be defined as a comprehensive examination that aims to gather relevant information to be able to assess the risk and verify the accuracy of representation.
Due Diligence is commonly performed before providing the service. The purpose is to identify any red flags, uncover hidden issues or risks, and make informed decisions based on the findings. Overall, due diligence plays a crucial role in mitigating risks, ensuring transparency, and maximizing the chances of a successful outcome as it enables the service provider to make well-informed decisions based on a thorough understanding of the subject matter.
What are the Due Diligence requirements?
Customer Due Diligence (CDD) which is known also as Customer Identification and Verification is the process that a business undertakes to establish the identity of a customer and verify the information provided. The process typically involves collecting and verifying certain information about the customer including identification documents and proof of address.
The nature and purpose of the business-customer relationship refer to the dynamics, interactions and objectives that exist between a business and its customers. This is crucial for businesses to build long-term success.
Some cases of CDD sometimes require ongoing monitoring for suspicious activities. This refers to the process of continuously reviewing and assessing customer transactions, behaviours, and patterns to detect any signs of illicit or fraudulent activities. On-going monitoring is an essential component of an effective anti-money laundering (AML) and Counter-terrorism financing (CTF) program.
Ongoing monitoring also involved updates in Know Your Customer (KYC). This helps ensure the accuracy and currency of customer data and facilitates the identification of any material changes that may require further scrutiny. Regularly updating KYC information helps maintain a comprehensive and up-to-date understanding of the customer’s activities.
What is an Name-check?
Name-checks, also known as name screening, are an integral part of AML compliance processes. They involve comparing the names of customers against lists of known or suspected individuals or entities associated with money laundering, terrorist financing or other illicit activities.
Why are they important?
Name-checks are important to identify potential matches between the names being screened and the names on designated lists for sanctions such as lists maintained by governmental bodies and international organisations, United Nations Security Council Sanctions list, Office of Foreign Assets Control (OFAC) Financial Action Task Force (FATF) High-Risk Jurisdiction list. Name-checks are important for Politically exposed Persons (PEPs). Individuals are screened to identify PEPs and assess their associated risks.
What due diligence services can DZ Advisory offer?
DZ Advisory may assist individuals to conduct the necessary checks in order to ensure that individuals qualify as applicants for Maltese citizenship or residency.
If you would like to receive more information on the enrollment and processes, please provide us with your contact details and one of our team members shall be in contact with you promptly.
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