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How to pass compliance in financial companies

Compliance is a set of procedures aimed at preventing money laundering and terrorist financing.

This analysis is based on documents provided by the client as well as information that the reviewing company can obtain from various sources.

There are 2 parts to the compliance procedure:

  • KYC – “know your customer”
  • AML – Anti Money Laundering

In light of recent events and increased sanctions pressure, the compliance process in foreign financial institutions is tightening. Even existing customers face compliance scrutiny and account closures.

Many previously popular jurisdictions are now closed to Russian money, with foreign banks refusing to continue cooperation with Russians or imposing minimum balance sheet requirements of 2-3M USD, as in Switzerland.

The example of the popular broker Interactive Brokers is illustrative, which last year again asked all clients to go through the compliance procedure, providing all income documents, closed the possibility of opening accounts for KIKs with Russian owners, and then announced the closure of sub-brokers’ accounts in Russia and a number of other countries.

All this leads to the fact that Russians are not insured that their account will not be closed tomorrow, because of which they will incur significant costs due to the urgent sale of investment positions, closing strategies and taxation of all operations at the current high USD exchange rate.

And clients, being forced to urgently seek alternatives to place their funds and portfolios in foreign jurisdictions, often choose investment insurance products for the following reasons:

  • Compliance is simpler
    The client does not go through this procedure at the bank itself, but at the insurance company that holds the clients’ funds at the final bank.
  • Compliance is carried out once – at the stage of account opening
    If the insurance company has agreed on the basis of the reviewed documents that the client will be able to place 500K USD, the client can be sure that during the entire service period the compliance procedure will not be started again and his account will not be closed, as the insurance product cannot be closed prematurely on the initiative of the insurance company.
  • Starting amount – from 100K USD
    Hundreds of thousands of Russians with balances from 100K to 1-2M USD are now having trouble opening a bank account abroad. Banks are simply not interested in such clients. In the case of investment and insurance accounts, investors can access leading international banks (e.g. HSBC) with as little as 100K. And having connected American Express card with a limit of up to 50K USD per month, you can use these funds all over the world.

Our extensive experience working directly with compliance control allows us to build a good story and prepare the necessary documentation package.

To simplify the compliance process, we recommend choosing ULIP / PPLI and are available to assist with the selection and preparation of your case.

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