#QuickBiteCompliance Day 64
Who’s on the Other Side of the Deal? Let’s Talk About Counterparties 🤝💰
Every time you buy something, there’s someone on the other side selling it to you. That person or business is called a counterparty. This is the same for banks and companies—they make deals with counterparties all the time.
Sounds simple, right? But here’s the twist: bad guys can sneak into the system and use counterfeit counterparties to do illegal things like:
🚨 Fake Companies: A bad guy might set up a pretend company to sell fake products or launder money. For example, they might sell something that doesn’t exist just to move money around.
🚨 Shady Partners: Criminals could team up with real companies but use them to fund illegal activities, like smuggling or bribery.
🚨 Fraud in Disguise: A bad counterparty might not deliver on their promise, leaving the buyer (or the bank) with a big loss.
Here’s a real-life example: Imagine a bank’s customer buys expensive electronics from a seller (the counterparty). The seller seems legit, but they’re secretly run by criminals. The electronics never arrive, and the money is used for illegal activities like drug trafficking.
What can we do to stop this?
🔍 Banks and companies must investigate who they’re dealing with (this is called due diligence).
⚙️ Use tools and technology to spot fake counterparties.
🤝 Share information to expose bad actors hiding in the system.
Every transaction has two sides—let’s make sure both are clean and honest!
#AntiFinancialCrime #KnowYourCounterparty #FraudPrevention #AML #FinancialIntegrity #InclusiveRegtech #OpenSourceAML
Source: https://www.acams.org/en/resources/aml-glossary-of-terms
