Due Diligence

How might I perform Enhanced Due Diligence in my business?

Monday, July 13, 2020

As there are many factors which dictate where Enhanced Due Diligence may be applicable - read more about What Enhanced Due Diligence is here - this article covers some of the common cases we will likely encounter.

Non face-to-face:

Non face-to-face transactions represent a significant risk to our business. The anonymity implicit in the transaction makes it difficult for us to ascertain whom it is we are dealing with and moreover, if they are indeed who they say they are.

To bring greater levels of transparency to any non face-to-face transaction, we should consider utilising the data and information made available via the use of the internet as a means to help build up a more complete picture.

Consider our typical process for dealing with sales made online, over the phone etc. As we move towards completing our transaction with our new client, we will obtain a shipping address.

For our own protection, we will then stipulate that the shipping address must match the billing address. This also applies for when we are accepting payment by card.

With billing/registered card address obtained, we could then consider using our clients IP as a means to identify the geographical location from where payment is made, the moment it is made when they complete their transaction.

That is not to say we expect the Billing Address and the clients Geographical location to match each and every time, rather, we are able to identify inconsistencies. Consider our client is based in a high risk country when payment is being made.

ArcartaPay uses multiple sophisticated security measures to dramatically reduce fraud of any kind.

The on-the-spot risk profile for each transaction, geographical tagging and WatchList checks built into every transaction are some many measures that enables businesses to protect themselves against losses caused by fraud, and cybercrime.

High Risk Individuals & Politically Exposed Persons:

Throughout a possible exchange prior to the completion of their purchase from us, we will seek to ascertain our clients first name, last name and country of citizenship.

With these three pieces of information, we may wish to perform a WatchList check, where we can identify if we are dealing with a known high risk individual, or a Politically Exposed Person.

In cases where the former applies, we are advised to first request full identity documentation, such as a scan of a Passport or ID. In the event our client has a common name, we may wish to perform a more thorough WatchList Check.

Using the complete data made available with the ID now supplied, we will be able to accurately identify our client. If this second WatchList check yields a positive result, we are advised to terminate our transaction with individuals deemed a high risk.

When dealing with Politically exposed persons, it is recommended we obtain ID documentation and proof of residency. In addition we may wish to confirm that they are the Beneficial Owner of the Art Object.

Read more about Politically Exposed Persons here. Read more about what a Beneficial Owner is here.

Arcarta enables you to perform accurate Watchlist Lookups and Checks so you know who you’re dealing with and stay on the right side of the5th anti-money laundering directive, avoiding fines and penalties.