Thursday, January 24, 2013


You can assume that the direct and blunt threats made by North Korea, against the United States, has further hardened American attitudes towards the DPRK. When a rogue state boasts that it will take military action against America, as it is a sworn enemy, you can assume that investigations, and enforcement action, against anyone caught dealing with the offending state, will increase over at Treasury.

For that reason, it is humbly suggested that you increase Country Risk as to both Singapore and Myanmar. Both countries have a history of dealing with North Korea, including covert transactions. If you are a compliance officer at a financial institution whose clients regularly trade with companies in either country, you should ensure, as much as possible, that goods shipped by your bank clients will end up where you understand they are destined. Does Due Diligence require that you obtain a notarised affidavit from your clients as to end users ? Use your good judgment.

Does your customer ship anything that might be dual-purpose goods, which North Korea could use in its WMD or ballistic missile programmes ? If the answer is positive, you will want to conduct an Enhanced Due Diligence investigation, and document your results, so that you are not embarrassed two years later, when you get a visit from law enforcement, enquiring about funds transfers, shell companies, and transshipment of goods to North Korea. Make sure that your bank is not the poster child for compliance malpractise involving the DPRK.

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