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All SMEs need to consider financial crime risks when applying for export finance.听

This is because when you apply for export finance like credit insurance or export guarantees, your bank must check they are following the laws, regulations and 鈥榗ustomer due diligence鈥� rules on financial crimes such as:聽

• money laundering聽

• 蹿谤补耻诲听

• bribery and corruption聽

• tax evasion聽

• 蝉补苍肠迟颈辞苍蝉听

This guide will help show you what you need to consider and might need to show your bank. This is likely to help you access finance easier and quicker and do safer business.听

This guide does not constitute advice, and you should get professional or specialist advice to address your circumstances and before doing anything based on its contents.听

Customer due diligence聽

Banks need to demonstrate they have completed 鈥榗ustomer due diligence鈥� to sufficiently reduce their exposure to any financial crime risk. They must consider:聽

• what countries and regions you鈥檙e exporting to聽

• your customers and any beneficial owners they may have聽

• product, service, transaction or delivery channel risks聽

Banks need to make these checks:聽

• when establishing a relationship with you for the first time聽

• throughout their relationship with you - banks can 鈥榙e-bank鈥� you for financial crime reasons聽

Banks may not be able to work with you if they鈥檙e not satisfied with the information you provide them.听

For example, if the product you鈥檙e exporting is at a high risk for financial crime, it鈥檚 unlikely the bank would work with you until the financial crime risks have been adequately considered.听

Your bank may make a risk assessment based on the information you give them about this. This will help them decide if they can do business with you. Accurate information provided by you from the start may help you to access banking products and services better.听

Customers and ownership聽

Banks need to understand your business, and any 鈥榖eneficial owners鈥� you may have. They may also need to understand what the purpose and nature of your business relationship with the bank will be.听

Your identity聽

Your bank may ask you for documents proving the identity of:聽

• your business, including:聽

• company name聽

• company number of registration聽

• registered office address聽

• principal place of business聽

• the directors of your business, for example passports and photocard driving licenses聽

These documents should be from a reliable independent source, for example official government documents.听

Beneficial owners聽

A beneficial owner is someone who ultimately owns or controls your business. This means they either own or control more than 25% of body corporates or partnerships or otherwise own or control your business.听聽

Your bank may need documents proving the identity of any beneficial owners. These should be from a reliable independent source, for example official government documents.听

Politically exposed persons聽

Your bank may want to know if your business is associated with any politically exposed persons (PEPs). These are people with prominent public roles, along with their family members or known close associates. It does not include middle or junior-ranking officials.听

The Money Laundering Regulations have a .听

PEPs and their families or close associates can be riskier for banks to work with. This is because they may be vulnerable to corruption, money laundering or other financial crimes.听

Being associated with a PEP does not mean that you won鈥檛 be able to access export finance but does put your business into a higher risk category. It鈥檚 likely your bank will need to make enhanced financial risk checks. This could include adverse history checks or reviewing media reports to check against financial crime risks.听

Ownership and control structure聽

Your bank may want to know if your ownership and control structure is transparent and makes sense. A complex or unclear ownership structure does not mean financial crime is necessarily occurring, but you may need to show your bank an obvious commercial or legal reason for it. This could include:聽聽

• a diagram of the control structure explaining the commercial or legal reason for it聽

• official documents showing a company name, number of registration and registered office address聽

• identification documents like passports and photocard driving licences if the beneficial owner is an individual聽

• evidence that the expected source of funds is from legitimate sources, for example VAT and income tax returns, copies of audited accounts, pay slips, or public deeds聽

Sources of wealth聽

Your bank may ask if your source of wealth (or source of wealth of beneficial owner) can be easily explained, for example through occupation, inheritance or investments.听

For example, if your business鈥� wealth is from inheritance, then a copy of the will may be needed.听

Where you are exporting to聽

If you export to any high-risk countries, it鈥檚 likely this will put your business into a higher risk category. Your bank may need to make enhanced checks, for example requesting additional information on:聽

• your business and beneficial owner. This means that your bank may carry out enhanced customer due diligence and enhanced ongoing monitoring on your business. The level of enhanced customer due diligence and enhanced ongoing monitoring undertaken is likely to be proportionate to the level of risk attributed to your business. This will differ between institutions, depending on other risk factors present as indicated in this guide.听

• the intended nature of the business relationship in the high-risk country聽

• your source of funds and wealth and your beneficial owners聽

• the reasons for the transactions聽聽

These high-risk countries are:聽

• 础濒驳别谤颈补听

• 础苍驳辞濒补听

• 叠耻濒驳补谤颈补听

• Burkina Faso聽

• 颁补尘别谤辞辞苍听

• C么te d鈥橧voire聽

• 颁谤辞补迟颈补听

• Democratic People鈥檚 Republic of Korea聽

• Democratic Republic of the Congo聽

• 贬补颈迟颈听

• 滨谤补苍听

• 碍别苍测补听

• 尝别产补苍辞苍听

• 惭补濒颈听

• 惭辞苍补肠辞听

• 惭辞锄补尘产颈辩耻别听

• 惭测补苍尘补谤听

• 狈补尘颈产颈补听

• 狈颈驳别谤颈补听

• 笔丑颈濒颈辫辫颈苍别蝉听

• South Africa聽

• South Sudan聽

• 厂测谤颈补听

• 罢补苍锄补苍颈补听

• 痴别苍别锄耻别濒补听

• 痴颈别迟苍补尘听

• 驰别尘别苍听

Of these jurisdictions, the following are also subject to financial sanctions measures at the time of drafting this guidance:聽

• Democratic People鈥檚 Republic of Korea聽

• Democratic Republic of the Congo聽

• 贬补颈迟颈听

• 滨谤补苍听

• 惭补濒颈听

• 惭测补苍尘补谤听

• South Sudan聽

• 厂测谤颈补听

• 痴别苍别锄耻别濒补听

• 驰别尘别苍听

Read more about money laundering and high-risk countries.听

Product, service, transaction or delivery channels聽

You should consider your product, service or transaction鈥檚:聽

• level of transparency or opaqueness聽

• 肠辞尘辫濒别虫颈迟测听

Transparency or opaqueness聽

Your bank may want to know if your products or services allow anonymity or opaqueness of customer, ownership or beneficiary structures that could be used for illegal purposes. This could be through:聽

• pooled accounts聽

• bearer shares聽

• fiduciary deposits聽

• offshore and other trusts聽

• legal entities like foundations structured to take advantage of anonymity聽

• dealings with shell companies or companies with nominee shareholders聽

A transaction involves two parties who are making or benefiting from the transaction or executing it, for example the bank and your business. It also includes you facilitating a transaction between two third parties.听

颁辞尘辫濒别虫颈迟测听

Your bank may want to know more if your transactions are complex, for example they involve multiple parties or jurisdictions.听

They may look at:聽

• how much of your business relationship is not on a face-to-face basis聽

• any introducers, intermediaries or third parties your business uses and their relationship to them聽

• any transactions that may favour anonymity, for example through cryptocurrencies聽

If any of these apply, it would be helpful to have evidence around the legal and commercial purpose of such transactions. All transactions carried out on behalf of your business must be recorded. This could be through your credit or debit account statements, for example.