Enhanced Due Diligence Procedures in French Polynesia: Key to Compliance with Anti-Money Laundering Regulations
French Polynesia, a collection of islands in the Pacific Ocean, has become an attractive destination for foreign investors and businesses seeking to expand their operations. However, with this influx of capital comes the risk of money laundering and other financial crimes. To mitigate these risks, organizations operating in French Polynesia must implement enhanced due diligence (EDD) procedures as part of their know-your-customer (KYC) processes.
Risk-Based Approach to KYC
The modern KYC framework takes a risk-based approach, where the level of due diligence is proportionate to the risk posed by each customer. In French Polynesia, this means that customers with higher risk profiles will require more stringent EDD procedures, while lower-risk customers can be subject to standard and simplified due diligence.
Who Qualifies for Enhanced Due Diligence?
A range of circumstances may indicate that a customer represents a high risk in French Polynesia, including:
- High-net-worth individuals
- Cash-intensive businesses
- Unusual business relationships or anonymous transactions
- Businesses with unclear or complex ownership structures
- Companies based in countries with lax or non-existent anti-money laundering regulations
- Private and correspondent banks
- Politically exposed persons (PEPs)
- Any business that may represent a higher risk of money laundering, such as gambling
What Is Included in Enhanced Due Diligence?
EDD procedures in French Polynesia must provide reasonable assurance of reaching an accurate understanding of the money laundering and financial crime risk posed by each customer. This involves conducting rigorous investigations, gathering significant evidence, and documenting all due diligence reports.
Recommended information sources and CDD measures vary depending on the customer and the circumstances of the relationship, but may include:
- Obtaining additional information about the customer’s occupation, volume of assets, publicly available data, and media reports
- Investigating the intended nature of the business relationship
- Determining the source of funds or the customer’s source of wealth
- Assessing the reasons for intended or performed transactions
Implementing Enhanced Due Diligence in French Polynesia
Implementing EDD procedures in French Polynesia requires collecting information about the customer’s name and aliases, corporate records, company background, negative media coverage, global compliance status, current and past litigation, and more. This process can be time-consuming and requires substantial expertise.
To streamline this process, organizations can utilize specialized software solutions that automate risk scoring and EDD reporting, such as Alessa’s AML Compliance Solution. By leveraging these tools, organizations in French Polynesia can efficiently manage their EDD procedures and ensure compliance with anti-money laundering regulations.