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#1617878 - 10/19/11 11:00 PM Trade Finance Due Diligence
DDPAND Offline
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I would like to enhance our Trade Finance Due Diligence documentation. How do any of you document due diligence - checklists, forms, etc.

Thank You for your help

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#1617879 - 10/19/11 11:36 PM Re: Trade Finance Due Diligence DDPAND
Hrothgar Geiger Offline
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Once upon a time, I did an informal survey of banks with a healthy volume of trade finance. Most relied on checklists; some more elaborate than others, some electronic records, some paper. A very small number were in the process of building automated profiling processes.

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#1617935 - 10/20/11 12:39 PM Re: Trade Finance Due Diligence Hrothgar Geiger
Retread Offline
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Can't really help much since we are not involved in Trade Finance, but this site may be of some interest to you.

http://www.wolfsberg-principles.com/pdf/Wolfsberg_Trade_Principles_Paper_II_(2011).pdf
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#1618018 - 10/20/11 02:33 PM Re: Trade Finance Due Diligence Retread
BrendaC Offline
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We conduct annual review and when a client deviates significantly from established expectations. We look at type of transactions, geographic locations, volume and velocity stats and periodically test to ensure all pertinent parties are being verified to OFAC on each transaction.
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#1619218 - 10/24/11 07:02 PM Re: Trade Finance Due Diligence DDPAND
Ted Dreyer Offline
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There is some useful information on due diligence and risk mitigation in the BSA Exam manual:

http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_079.htm

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#1619222 - 10/24/11 07:09 PM Re: Trade Finance Due Diligence Ted Dreyer
Hrothgar Geiger Offline
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This is my favorite line from that section,

"The sophistication of the documentation review process and MIS should be commensurate with the size and complexity of the bank’s trade finance portfolio and its role in the letter of credit process. "

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#1619346 - 10/24/11 09:04 PM Re: Trade Finance Due Diligence Hrothgar Geiger
DDPAND Offline
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Joined: Dec 2006
Posts: 207
Thanks for all the input.

Is there anywhere that I can find checklist(s) to do the onsite monitoring due diligence reviews?

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#1619395 - 10/24/11 10:27 PM Re: Trade Finance Due Diligence Hrothgar Geiger
Princess Romeo Offline

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Originally Posted By: Hrothgar Geiger
This is my favorite line from that section,

"The sophistication of the documentation review process and MIS should be commensurate with the size and complexity of the bank’s trade finance portfolio and its role in the letter of credit process. "


Hahaha! In other words - if you're going to swim in the deep ocean, you better have some really effective shark repellent.
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#1619397 - 10/24/11 10:29 PM Re: Trade Finance Due Diligence Princess Romeo
Kathleen O. Blanchard Offline

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I usually find that the banks who don't do this often and don't know what they are doing are the ones who create a mess. I suppose there are some who go off the deep end without proper systems, etc.
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