Who needs it and why
Banks, money services businesses, broker-dealers, and certain other institutions have formal anti-money laundering program obligations under the Bank Secrecy Act. Many other businesses, including those in real estate, art, luxury goods, and private investment, face growing expectations from regulators, banks, and counterparties even when formal rules are limited. In money laundering cases, prosecutors sometimes argue that a person deliberately avoided learning the truth, which is why a documented review matters. Sanctions compliance is a separate but related obligation that applies broadly to U.S. persons.
Building a sensible review
Due diligence usually starts with identifying the customer or counterparty and the people who ultimately own or control it. From there, it looks at the source of funds, the purpose of the transaction, and whether the activity fits the customer's profile. Red flags can include unusual payment routes, reluctance to provide information, third-party payments, and transactions that lack a clear business reason. Keep records of what you asked, what you received, and how decisions were made, and do not tip off a customer if a report to authorities is being considered. Due diligence should be proportionate: a long-standing local customer usually needs less review than a new counterparty sending large payments from an unfamiliar jurisdiction.
When to bring in counsel
We help businesses design or review due diligence procedures, respond to bank inquiries or account closures, and assess transactions that have raised concerns. If you have already completed a deal and later learn of troubling facts, we discuss what reporting, remediation, or cooperation may be appropriate. We also advise individuals and companies facing investigations where the adequacy of their due diligence is at issue. Because rules and enforcement priorities change, we check current requirements rather than relying on assumptions.
