2. Red Flag Indicators for PF
Effective from 4/7/2021| (i) | Transaction involves person or entity in foreign country of proliferation concern. | |||
| (ii) | Transaction involves person or entity in foreign country of diversion concern. | |||
| (iii) | The customer or counterparty or its address is similar to one of the parties found on publicly available lists of “denied persons” or has a history of export control contraventions. | |||
| (iv) | Customer activity does not match business profile, or end-user information does not match end-user’s business profile. | |||
| (v) | A freight forwarding firm is listed as the product’s final destination. | |||
| (vi) | Order for goods is placed by firms or persons from foreign countries other than the country of the stated end-user. | |||
| (vii) | Transaction involves shipment of goods incompatible with the technical level of the country to which it is being shipped, (e.g. semiconductor manufacturing equipment being shipped to a country that has no electronics industry). | |||
| (viii) | Transaction involves possible shell companies (e.g. companies do not have a high level of capitalisation or displays other shell company indicators). | |||
| (ix) | Transaction demonstrates links between representatives of companies exchanging goods i.e. same owners or management. | |||
| (x) | Circuitous route of shipment (if available) and/or circuitous route of financial transaction. | |||
| (xi) | Trade finance transaction involves shipment route (if available) through country with weak export control laws or weak enforcement of export control laws. | |||
| (xii) | Transaction involves persons or companies (particularly trading companies) located in countries with weak export control laws or weak enforcement of export control laws. | |||
| (xiii) | Transaction involves shipment of goods inconsistent with normal geographic trade patterns (e.g. does the country involved normally export/import good involved?). | |||
| (xiv) | Transaction involves financial institutions with known deficiencies in AML/CFT controls and/or domiciled in countries with weak export control laws or weak enforcement of export control laws. | |||
| (xv) | Based on the documentation obtained in the transaction, the declared value of the shipment was obviously under-valued vis-à-vis the shipping cost. | |||
| (xvi) | Inconsistencies in information contained in trade documents and financial flows, such as names, companies, addresses, final destination etc. | |||
| (xvii) | Pattern of wire transfer activity that shows unusual patterns or has no apparent purpose. | |||
| (xviii) | Customer vague/incomplete on information it provides, resistant to providing additional information when queried. | |||
| (xix) | New customer requests letter of credit transaction awaiting approval of new account. | |||
| (xx) | Wire instructions or payment from or due to parties not identified on the original letter of credit or other documentation. | |||
| (xxi) | Involvement of items controlled under WMD export control regimes or national control regimes. | |||
| (xxii) | Involvement of a person connected with a country of proliferation concern (e.g. a dual-national), and/or dealing with complex equipment for which he/she lacks technical background. | |||
| (xxiii) | Use of cash or precious metals (e.g. gold) in transactions for industrial items. | |||
| (xxiv) | Involvement of a small trading, brokering or intermediary company, often carrying out business inconsistent with their normal business. | |||
| (xxv) | Involvement of a customer or counterparty, declared to be a commercial business, whose transactions suggest they are acting as a money-remittance business. | |||
| (xxvi) | Transactions between companies on the basis of “ledger” arrangements that obviate the need for international financial transactions. | |||
| (xxvii) | Customers or counterparties to transactions are linked (e.g. they share a common physical address, IP address or telephone number, or their activities may be coordinated). | |||
| (xxviii) | Involvement of a university in a country of proliferation concern. | |||
| (xxix) | Description of goods on trade or financial documentation is nonspecific, innocuous or misleading. | |||
| (xxx) | Evidence that documents or other representations (e.g. relating to shipping, customs, or payment) are fake or fraudulent. | |||
| (xxxi) | Use of personal account to purchase industrial items. | |||
7 Available at: fatf guidance on proliferation financing (fatf-gafi.org)