List Highlights Export Control Red Flags From Possible Shell Companies
A list published this week by the Institute for Financial Integrity outlines red flags that may signal a bank’s customer or counterparty is a shell company working to evade export control regulations.
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Banks should scrutinize customers using companies that have been “dormant for an extended period,” that are making an “unusually” large number of transactions compared to the company’s stated business, or that have directors that hold an “unusually high” number of directorships, said the institution, which provides training and certification for compliance professionals. Other red flags include the same address housing many different companies or when the age of the beneficial owner is improbably young or old, which may “indicate that the beneficial owner is a ‘straw person’ rather than a real owner.”