KYC & SOF Reports for AML

In a world where developed countries are increasingly concerned with creating mechanisms to fight terror finance, money laundering and tax evasion, financial institutions, wealth managers, lawyers, accountants and other professional firms are facing demands to comply with increasingly demanding Know-Your-Client (KYC) and Anti-Money Laundering (AML) laws and regulations.

We provide the following services to help small and medium service providers satisfy their domestic KYC and AML obligations when onboarding new clients from Mainland China or Taiwan.

KYC Background Check

Our team, together with a combination of local service providers, conducts a thorough background check on individuals or every Ultimate Beneficial Owner (UBO) of a corporate client to ensure their onboarding does not become a liability for your organization.

The KYC Background Check includes the following information.  All information below is subject to availability on a case by case basis.

ItemDescriptionIndividualCompany
1)Background of one selected key individual.

Includes: personal information, related companies where individual is shareholder or responsible person, employment history, negative internet/media search, litigation, bankruptcy and law enforcement actions, personal references check

2)Business intelligence findings.

A team of experienced investigators is deployed to collect information about the company or individual from company insiders, suppliers, customers, reporters, or related members of the local business community. Sources vary on a case by case basis.

3)Politically Exposed Person Database Search
4)International Sanctions/Compliance Database Search
5)Comprehensive International English Language Media Searches
6)Comprehensive Local Language Media Searches
7)Credit Record
8)Bankruptcy Records
9)Civil and Criminal Litigation and Other Law Enforcement Actions
10)Legal Name and Address
11)Registry No. & Office & Registered Capital
12)Branch & Subsidiary
13)Capital Structure & Shareholders
14)Change on Registration Information
15)Principals
16)Employees
17)Facilities & Property
18)Trademark &Patent
19)Purchase Information (Raw Materials and Products) & Payment Terms
20)Sales Information & Collection Terms
21)Financial Information- Financial Statement & Ratios & Comparison with Industry Average
22)Bank Information
23)Industry Analysis
24)History
25)Business Status& Ranks
26)Future Prospects

Source of Funds Reports (“SOFR”)

In order to be in compliance and to avoid delays in international transactions, it is important for everyone to properly document (i) the nature of transaction in question, and (ii) the origin of the funds being transferred when making any international payments. Even relatively routine payments may be delayed or rejected by either sending or receiving bank if proper documentation is not available, particularly if either financial institution has any suspicion that the funds in question might be “pre-tax”.

Transaction-related transfers such as equipment/machinery/commodity purchases, outbound M&A, real estate purchases, and investor-immigration programs, are subject to additional scrutiny, especially if any of the Ultimate Beneficial Owners (“UBOs”) of the involved parties is a Politically Exposed Person (“PEP”).

The SOFR prepared by an independent accounting firm is a baseline process to address these requirements.  The SOFR is the best practice to avoid being flagged for “extended due diligence” when attempting to open an account in a foreign financial institution or when trying to complete a transaction.

SOFR Contents

After receiving your information and required documents (depending on the source of your funds, see Section 3 below), the accounting firm will produce a report including some of the sections listed below:

  • BACKGROUND INFORMATION OF CLIENT: Basic information about the client
  • EXPLANATION ON SOURCE OF FUNDS: The contents of this section will vary depending on the source of the funds stated by the client.
  • FINDINGS ON THE PATH OF FUNDS: A summary of the path followed by the funds from the stated source to the Client, including evidence of tax payment for said funds, if required.
  • CERTIFICATION OF ORIGIN AND PATH OF FUNDS
  • APPENDICES

Translation and Certification

Following completion of the SOFR by the accounting firm, a professional translation company will review the SOFR and certify the English translation so a bilingual version will be produced for international use. Many international financial institutions will only accept a certified translation from a properly licensed translation company and documents in English.

Delivery Time and Fees

In most cases, a full report can be produced within 15 days after receipt of all required documents. In cases where the source of funds is more complicated, or where the documentation is unclear, additional time may be required.