Financial Crime World

Wallis and Futuna Financial Institutions Face Stringent Customer Due Diligence Regulations

Combating Money Laundering and Terrorist Financing

Financial institutions in Wallis and Futuna are required to implement robust customer due diligence (CDD) procedures as part of their know-your-customer (KYC) processes to combat money laundering and terrorist financing. The Financial Crimes Enforcement Network (FinCEN) has imposed CDD obligations on financial institutions and a broad range of financial services companies operating in the region.

Risk-Based Approaches to KYC

To ensure compliance with anti-money laundering (AML) regulations, organizations must tailor due diligence to the risk that each customer presents. Customers deemed high-risk are subject to enhanced due diligence (EDD), while lower-risk customers can be governed by standard and simplified due diligence.

  • High-risk customers: enhanced due diligence, including complex ownership structures, countries with lax AML regulations, or under sanctions
  • Lower-risk customers: standard and simplified due diligence

Implementing Customer Identification Programs

Wallis and Futuna financial institutions must implement a customer identification program, which includes:

  • Verifying customer identity
  • Identifying beneficial ownership
  • Investigating the purpose of the business relationship
  • Establishing the risk of money laundering and illegal activity

Enhanced Due Diligence (EDD)

EDD involves a more thorough investigation of customers deemed high-risk. This includes:

  • Private and correspondent banks
  • Politically exposed persons (PEP)
  • Complex ownership structures
  • Countries with lax AML regulations or under sanctions

When conducting EDD, financial institutions must provide reasonable assurance of reaching an accurate understanding of the money laundering and financial crime risk a customer presents.

Documenting EDD Processes

All EDD processes must be exhaustively documented for regulatory scrutiny. This includes:

  • Adequate gathering of information
  • Assessment by an experienced professional
  • Documentation of all EDD measures

Recommended information sources and CDD measures vary depending on the customer and circumstances, including:

  • Obtaining additional information about the customer’s occupation, volume of assets, and publicly available data
  • Media reports and the intended nature of the business relationship
  • Source of funds or wealth

Simplifying EDD with Alessa

Implementing EDD can be a significant burden for organizations, requiring substantial time and expertise. However, Alessa offers an enhanced due diligence software solution that simplifies the process, enabling users to:

  • Risk score customers in 1/3 of the time at 1/3 of the cost
  • Order EDD reports quickly and efficiently