Sunday, August 11, 2013


Readers who have been following my work for several years know that I have written financial crime articles for two major AML/CFT database companies, over a total of eight years. My articles were not always well-received by certain staff members at those firms, because sometimes the individuals or entities I was analyzing were not profiled in the company's AML/CFT databases. Many of the subscribers would ask the nagging question: why doesn't the information Ken Rijock is writing about appear in the database already ? Obviously, there were deficiencies in the information contained in those databases.

The reason for those gaps in coverage is simple: when you collect, and display, data via profiles, rather than by information, you will always come up short. By definition, there are not enough researchers on staff, at any AML/CFT database, to create new profiles, and update existing profiles, on all new information that becomes available through open sources, 24/7. It is a physical impossibility, and you will always be playing catch-up, without success.

The answer, in my humble opinion, based upon twenty years of experiences in this field, is to use resources that focus on information, not on specific individuals or entities. Negative information on your subject is the primary form of intelligence that one must consider when making an informed decision on whether to on board a potential client. When there is no profile on an individual, you are totally in the dark, but in a system where the entries are made by negative information, and not limited to profiles, there are no fatal flaws.

Is the profile method of displaying information on AML/CFT databases inadequate ? You be the judge, but the next time you read an open-source article, about a financial crime matter, and then see that the individuals and entities listed in the article are not profiled in your database, you need to switch to one that contains negative information. To do any less is folly.

The shortcomings of profile-based AML/CFT databases are particularly significant for US-based compliance officers, in light of the American requirement that you have access to all information that is "knowable" when it comes to Iran. You as a compliance officer are expected to have all available information. You cannot afford to be on the wrong side of any criminal charges regarding violations of providing material support to Iran's WMD and ballistic missile programs, because you did not have information about sanctions evaders.

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