Recently, a friend reminded me of Abraham Lincoln’s phrase: “If you find education is too expensive, try ignorance”. This wisdom could be applied to our KYC sphere, saying “If you find that Anti-Money Laundering procedures are expensive, try without”.
Since the entry into force of the 4th European AML/CTF Directive in June 2017 and its various transpositions, implementation of a strict customer identification policy is felt to be cumbersome and costly.
However, in the past, some more diligent colleagues, quite satisfied with arrival of new business opportunities, still had a critical eye on the newcomer’s file. Others less.
Diligence is now a strictly regulated obligation. We will not be able to say “… we didn’t knew …”.
Take the time to watch our video to remember all of this. As a reminder, our application IBAKUS®KYC has set itself the goal of providing SMEs with a very effective solution and making Anti-Money Laundering procedures inexpensive.
For those who take these “due diligence” obligations lightly, remember the Directive transpositions into national laws don’t put gloves about sanctions.
First of all, there are professional sanctions ranging from the warning to the prohibition of practice. It’s already a whole program! To this may be added fines that can be in millions of euros. A real disaster.
Without going so far, there is a risk that is often forgotten : the media risk. Imagine the situation of a law firm or accountant, in connection with money laundering activities and/or tax evasion. Your life of work is reduced to nothing, when your name appear in the press. Put the key under the doormat and you’re done.
Finally, there’s also a moral hazard. Being blamed for having transgressed rules of life commonly accepted in our society. How can you justify having collaborated in an operation to plunder archaeological property? Having facilitated a waste disposal operation that impacted populations? Not to mention drugs or human trafficking.
No, all this is far too serious to risk lending flank ! So think twice before letting in a folder without looking at it from all angles (… KYC). I have in mind a few cases of confreres very light on this subject who have bitten their fingers in the past.
So, you think Anti-Money Laundering procedures are expensive ? Tell yourself that fines and troubles incurred that are likely to accumulate are much more.
Founder and CEO @ Ibakus Europe SA.
Founder of FMV & Partners SA in 2000s.