Due Diligence is a valuable and key risk management tool.

Thorough Due Diligence investigations allow business partners to make informed decisions and avoid surprises at the end of a Transaction (import, export, partnership, joint venture, merger & acquisition).

Thus the Due Diligence practice should be slotted into existing onboarding processes and should operate alongside them.

Know Your Partner may also enable the business to identify potential reputational risks associated with dealing with particular Third Parties.
In some cases the full cost of violations, remedial measures and integration could adversely affect business case and price.

The 4AMLD (Fourth Anti-Money Laundering Directive) reinforces the existing rules by introducing the following changes:

(i) enhanced ML/FT risk assessment by banks and other financial institutions (with regard to all relevant risk factors, including those relating to customers, countries, products, services, transactions);

(ii) clear transparency requirements about beneficial ownership for companies (with the institution of a central register);

(iii) enhanced cooperation and exchange of information between FIUs to identify and follow suspicious transfers of money and to prevent and detect crime or terrorist activities; (iv) coherent policy of EU countries towards non-EU countries that have deficient AML/CFT rules (like Iran at the present time);

(v) more sanctioning powers of competent National Authorities

Against this background, EU exporters (or Non-EU organizations dealing with EU) who fail - because of lack or inadequacy of internal controls and KYC procedures - to fully comply with EDD requirements and proactively align with EU government-sponsored compliance initiatives, can find themselves seriously exposed to legal and reputational risks, with a potential disruptive economic and financial impact on their business continuity.

Therefore, it is mandatory and prudent that EU economic operators follow a structured process of EDD (Enhanced Due Diligence), in order to carry out an adequate screening of their counterparts (so called KYC/Know-Your-Customer procedure) based in or connected to high risk jurisdictions, gathering and verifying all possible available information, including but not limited to: (i) “UBOs” (Ultimate Beneficial Owners), that directly or indirectly control the Iranian counterpart; (ii) and actual “DMs” (Decision Makers).

Given the complex and fast-changing regulatory framework above outlined, EIFEC has implemented several specific Export Compliance Enhanced Due Diligence program in order to incentivize all interested economic and financial operators to proactively and fully comply with the applicable EU directives and regulations, national laws and regulations (including US) as well as with the appropriate best practices, in any relevant business relationship and transaction with natural and legal persons from high risk countries.