Due Diligence 2017-09-17T23:33:16+00:00

Due Diligence Advisory Services

Enhanced Due Diligence &  Customer Due Diligence Services

Due Diligence Advisory Overview

Due Diligence in trade finance transactions is required by numerous domestic and international regulatory agencies. Trade Finance Due Diligence has specific requirements to comply with anti-money laundering and counter-terrorism financing laws. The last two decades have seen a significant push for globalism and open markets which has resulted in an explosion of international trade. At the same time there has also been a tremendous increase in global terrorism.

Both of these trends represent structural changes in economics and governance. Although these trends are diametrically different, one positive with the explosion of global trade, and the other negative with just an explosion, it is not surprising that the government reacts to both in very much the same way, by demanding increased regulation.

Regardless of whether it is skyrocketing world trade or terrorism, it is the inherent nature of government to want more restrictions, more regulations, more compliance paperwork and more fees. In this case, there is more at work than just the government’s natural tendency to regulate. Global terrorism has taught prudent people to be more diligent and we must acknowledge that expanding global trade opens the door for increased incidence of cross-border terrorist incidents. This further fuels the government’s instinctual avidity to regulate. It’s a perfect storm of regulatory desire.

Trade Finance Due Diligence Requirements Keep Growing

There is now a 100% certainty of increased due diligence requirements for anyone involved in international trade, trade finance, commodity finance, and project finance. Compliance is no longer a request. It has grown into a rather substantial legal obligation for those doing business internationally.

In addition to terrorism, which continues its inexorable march towards our shores, money laundering and drug trafficking also pose very real threats to the US. If you’re involved in international trade or trade finance, you will have to bear a disproportionate share of the world’s effort to combat these evils.

Expect the increasing demands for more and more Due Diligence along with demands to shift more and more of the workload and responsibility to alternative lenders. Additional compliance requirements will disproportionately impact small businesses involved in global trade or trade finance.

The US spends $8 billion per year on anti-money laundering efforts and only stops 1% of the money laundering every year.

Trade Finance Due Diligence Diagram

Due Diligence Advisory Services We Provide

We undertake a full complement of counter-party trade finance due diligence investigations as part of any trade financing transaction in which we or any client of Global Trade Funding is involved.

We understand the importance of thoroughly vetting every participant in a trade finance deal, thereby ensuring that no fraudulent or unworthy applicants filter into the day to day operations of the business of our business or that of our clients.

Complete, transparent investigations are essential for the success of any financing transaction, while also forming the basis for healthy, ongoing business relationships.

We also find that many clients aren’t prepared or equipped to follow this rapidly changing compliance environment. We perform these investigations as part of our client advisory service for every transaction in which we are involved.

Specifically, our trade finance due diligence services comply with all of the requirements of United States laws and government regulations, including the Patriot Act, the Anti-Money Laundering Act, the Counter Terrorism Financing Act, and also exceeds all of the Know Your Client (KYC) regulations.

We perform these procedures for all trade finance transactions in which we are involved.

Key Elements of Trade Finance Due Diligence

Properly undertaking due diligence investigations is a complex and time-consuming process that requires a great deal of training and experience. Many industry professionals undertake what they believe to be legitimate compliance investigations by simply performing internet searches of names and phrases using internet search engines.

This produces unverified results that can be manipulated. They are also just as likely to produce fake news as anything else. That kind of shallow, ineffective investigation does not meet our standards. Real due diligence incorporates the key elements listed here to comply with anti-fraud and anti-money laundering regulations.

  • To establish compliance with Anti-Money Laundering regulations.
  • To establish the real identities of individuals involved in the transaction.
  • Ascertain that the individuals possess the right qualities to carry out the duties expected of them.
  • To check international fraud registers and criminal record bureaus.
  • To establish the Ultimate Beneficial Owners (UBO) of the company or companies.
  • To ascertain companies are correctly incorporated and their incorporation is current and not hindered by any legal action or pending actions.
  • To ascertain that the people and the business involved have the financial capability to deliver what is required of them.
  • To obtain a full understanding of the source and history of their investment funds.

Key Takeaways

Due Diligence investigations of counter-parties are essential for the success of any trade finance deal. They ensure clients comply with the law, and help to establish the basis for mutually beneficial business relationship. Knowing our customers is very important to us, so  performing client due diligence for every transaction in which we are involved has the desired effect of protecting our clients and ourselves.

Our Trade Finance Due Diligence advisory service performs all Trade Finance Due Diligence required by US law, including the Patriot Act, Anti-Money Laundering Act, Counter-Terrorism Financing Acts and Know Your Client (KYC) regulations. We perform these procedures for all transactions in which we are involved according to strict, consistent guidelines.

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