“Is the person who he claims to be?” old fashion due diligence may give the correct answer!

George Demetriades

Journal of Money Laundering Control, 2016, vol. 19, issue 1, 79-91

Abstract: Purpose - – This paper aims to critically examine the impact of the evolution of technology regarding customer due diligence (CDD) measures and highlight potential weaknesses in the areas of business emerged from third parties, politically exposed persons and international clients. The paper explores whether the use of old-fashioned CDD measures can aid relevant professionals to examine whether the (potential) client is who he claims to be. Design/methodology/approach - – The paper is focused primarily on the use of important evaluation reports, in Cyprus and the UK, to identify potential flaws regarding CDD measures and the legal framework in fighting economic crime. Interviews from professionals were carried out to provide first-hand experience on relevant issues. Findings - – The view, that nowadays due to the evolution of technology, CDD is more efficient than ever, is based on solid ground. However, taking in consideration relevant reviews and reports, the paper concludes that there are significant problems and difficulties in gathering and assessing client’s information. Therefore, the use of old-fashioned due diligence measures, in appropriate circumstances, might provide a more adequate investigation for high-risk customers. Practical implications - – The paper, in contrast with a professional’s recorded opinions, uses high profile reports to prove that there is a loophole in current legal framework relating to CDD measures. Originality/value - – The paper uses two important reports from Cyprus and the UK to prove the weaknesses of current application of CDD measures. The analysis provided in the paper can be used to persuade professionals that there is space for the use of old-fashioned CDD.

Keywords: Economic crime; Cyprus; Money laundering; Due diligence (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-11-2014-0041

DOI: 10.1108/JMLC-11-2014-0041

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