Despite the Panama Papers leak of 2016, and the Paradise Papers and Bahamas leaks that followed, some banks still didn’t get the message. These leaks disclosed a large number of people who run businesses in an offshore country, in many cases to illegally avoid tax payments.
To comply with tax regulations, it is a must for a bank to check customers against these lists to avoid non-compliance, a damaged reputation and the support of illegal activity.
Still, we now see headlines of a major European bank that didn’t perform such checks. Prosecutors raided the bank’s HQ and other offices.
That’s one of the worst things that can happen to a bank’s reputation. The fact that the compliance officer was not aware that there were high-risk clients running businesses in Panama is a no-go.
FICO® TONBELLER® Siron®KYC solution would have helped, because it has an interface with the ICIJ Offshore Leaks Database. Not only is this database constantly updated, it’s exhaustive. Screening against the ICIJ offshore leaks data base would automatically alert compliance officials if the bank’s customers were running businesses in Panama, the Bahamas or other offshore tax havens. These customers and their transactions would also be classified as high risk in the system, and automatically put on enhanced due diligence.
The last thing you want to see as an officer of a bank is blue police cars outside your front door. Any banks that hadn’t already learned the message from the Panama Papers just got a wake-up call.