31 Days to a More Effective Compliance Program - Know Your Customer

Thomas Fox
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Do FCPA considerations come into play for customers? How should you think about your obligations under the FCPA for a group not traditionally associated with FCPA liability or even FCPA risk? These questions and perhaps others are raised by the 2015 FCPA investigation into certain transactions in Venezuela by Derwick Associates (Derwick) and a U.S. company ProEnergy Services (ProEnergy). ProEnergy supplied turbines that Derwick resold to the Venezuelan government and then installed in that country. This investigation demonstrates why See more +
Do FCPA considerations come into play for customers? How should you think about your obligations under the FCPA for a group not traditionally associated with FCPA liability or even FCPA risk? These questions and perhaps others are raised by the 2015 FCPA investigation into certain transactions in Venezuela by Derwick Associates (Derwick) and a U.S. company ProEnergy Services (ProEnergy). ProEnergy supplied turbines that Derwick resold to the Venezuelan government and then installed in that country. This investigation demonstrates why businesses need to be more concerned with not only who they do business with but how their customers might be doing business. In banking and financial services parlance, you now need to ramp up your organization’s Know Your Customer (KYC) information to continue throughout a seller-purchaser relationship, in the context of the FCPA.

Three key takeaways:

1. Non-banking and non-financial service entities need to consider their KYC obligations in the context of FCPA risk.

2. FinCEN rules on customer due diligence are a good starting point for the non-financial institution.

3. Ongoing monitoring should be used and the information incorporated into your customer risk profile going forward. See less -

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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