The current importance of compliance work

You've probably already gone through a due diligence process, whether opening a bank account or applying for credit from a bank. This is an example of a Compliance procedure, something we often come across in professional relationships and activities.

In a broad sense, Compliance procedures ensure acquiescence with all legal rules, regulations issued by supervisors/regulators, and rules derived from each organisation’s policies and procedures.

Which entities are obliged to fulfil Compliance procedures in terms of combating money laundering and terrorist financing?

According to the provisions of Portuguese Law no. 83/2017, of 18 August, various types of entities are required by law to observe Compliance procedures.

These include:

• Financial entities, such as credit institutions, payment institutions, investment companies and other financial companies.
• Non-financial entities, such as lawyers, auditors, certified accountants and tax advisors, service providers to companies, real estate agents, other legal persons or collective interest centres without legal personality, and others.

What are Compliance procedures?

There are various types of Compliance procedures. Some of the most important are Know Your Client (KYC), Know Your Transaction (KYT) and Know Your Business (KYB).

Obliged entities contribute to breaking the cycle of money laundering by defining and implementing these procedures.

The KYC procedure, for example, consists of identifying and verifying the customer's identity before the start of the business relationship or the provision of an occasional service and periodically throughout the duration of the business relationship.

During the KYC procedure, obliged entities obtain supporting documentation of the information collected, keeping a record of the identifying data and other elements relating to customers, their representatives and beneficial owners.

Obliged entities must always be able to detect the status of a politically exposed person and identify any persons or entities to which restrictive measures (sanctions) have been applied, namely those on the UN and EU lists.

For the duration of services provided to a client, obliged entities must define and update the risk profile associated with clients and adopt all the measures that prove necessary to prevent any attempt to use their services to commit illicit acts.

Role of a Compliance department

A Compliance department is responsible for ensuring accordance with specific legal duties, namely:

• Definition of an Effective Risk Management Model - Identifying, assessing and managing money laundering and terrorist financing risks, which involves carrying out risk analyses and implementing measures to mitigate these risks.
• Internal control system - Define and implement adequate internal control policies and procedures to effectively manage the risks identified to prevent using its services for illicit activities.
• Identification and due diligence - Identifying and verifying the identity of its clients and understanding the purpose and intended nature of the business relationship.
• Collaboration with the authorities - Acting as a point of contact between the obligated entity and the authorities.
• Training and awareness-raising - Ensure that its managers and employees are trained to be aware of the risks of money laundering and terrorist financing and the prevention measures to be adopted.
   

NEWCO's Compliance department

The main objective of NEWCO's Compliance department is to ensure that everyone who is part of our company or deals with us does the right thing. In this way, it ensures that all the laws, regulations and standards applicable to our various activities are complied with, particularly regarding risk assessment, the prevention of money laundering and terrorist financing, and the reporting of irregularities through whistleblowing channels.

NEWCO is aware of the current and future importance of Compliance in our areas of intervention. We have invested considerably in this department, both in terms of human resources and training.

The importance given to the Compliance department is a natural reflection of our values:

• Knowledge;
• Integrity;
• Transparency;
• Responsibility.

These values are NEWCO's identity matrix.

What are the benefits of working with our Compliance department?

An effective Compliance department offers significant benefits to our clients:

• You can trust NEWCO to protect your interests, knowing that we strictly adhere to industry regulations.
• The transparency and integrity that our compliance department promotes results in a reduction of potential risks.
• Our compliance department is proactive and keeps up to date with legal and regulatory changes, ensuring that our services meet the highest standards.