BUSINESS I GLOBAL AWARENESS
D
oing business in a global economy can be a challenge. As the marketplace grows, it is critical to ensure your business partners are not subject to restrictions. While opportunities abound, some companies practice due diligence and others just go ahead and hope things fall into place smoothly.
Although it may sound simple, a major element of diligence is to Know Your Customer (KYC). Commonly referred to by bank regulation and financial institutions, KYC is the due diligence that they and other regulated companies must perform to identify clients and gather pertinent business information. It usually takes the form of an internal policy used to conform to a customer identification program mandated by the Bank Secrecy Act (BSA) and the USA PATRIOT Act.
Many international jurisdictions take their cues from the U.S. to form their own similar version. The policy of knowing your customer is becoming more important on a global scale, to prevent identity theft fraud, money laundering and terrorist financing. It’s important to implement these types of procedures in your company to ensure you, your agents, consultants or distributors are in anti-bribery compliance.
Who to look out for
So how does one make the connection between knowing the customers they do business with and bribery? Although they are called slightly varying names in different countries, there are prominent public figures generally known as a Politically
Exposed Person (PEP) or Foreign Official. These people, due to their position and influence, are a higher risk for possible bribery and corruption. The Financial Action Task Force on Money Laundering (FATF) also includes the immediate family members or publically known individuals that are close personal or professional associates of the PEP in their definitions.
While there is no global definition for the term, most countries have based their own definitions of the FATF. The anti-bribery provision of the Foreign Corrupt Practices Act (FCPA) “makes it unlawful for a U.S. person, and certain foreign issuers of securities, to make a corrupt payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person.” The penalties for violation are severe. Criminal penalties could include fines up to $2,000,000,
Global business practises
The solar industry is truly a global market place and for many new companies in the sector there is a minefield of knowledge required in building associates and relationships in foreign markets. Jackson Wood, corporate business manager of MSR eCustoms, takes a look at what to be wary of when building a global presence and asks how well do you know your customers?
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www.solar-pv-management.com I Issue IX 2011
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