KYB Red Flags

When it comes to corporate clients, we understand that client due diligence can be complex. That’s why we’ve introduced a new red flag summary to all checks initiated using our ‘Know-your-business’ tool. The Red Flag Summary will highlight key risk factors that might otherwise be missed.

You'll find areas of concern or that require additional follow-up within the Red Flag summary. The lack of flags or ‘Not found’ should not be equated with ‘no flags exist’, only that Thirdfort’s system did not find sufficient data to indicate a flag at this time. The presence of flags means that sufficient data to warrant a flag was found. All of the potential flags on a report are detailed below:

Ultimate Beneficial Owners:

This flag is high if:

• A UBO report has been requested AND
• A UBO report has been successfully retrieved AND
• No Ultimate Beneficial Owners were reported OR
• One or more Ultimate Beneficial Owners is linked to a high-risk third country.

This flag is not found if:

• A UBO report has been requested AND
• A UBO report has been successfully retrieved AND
• Some or all Ultimate Beneficial Owners were reported.

If a UBO report was not requested, or if a UBO report was requested but unavailable, the flag will not show up on the report.

Newly Incorporated Company

This flag is high if the date of company incorporation and the date of retrieving the report is less than 12 months apart.

This flag is not found if the date of company incorporation and the date of retrieving the report is more than 12 months apart.

Presence in a High-Risk Third Country

This flag is high if the company itself and/or it has its correspondence address in a high-risk third country. 

This flag is not found otherwise.

Company Status

This flag is high if a company status or sub-status is reported to be anything other than active. For example: Dissolved, In administration, Undetermined.

This flag is not found if a company status is reported as active.

Company Address Status

This flag is high if the company has the default Companies House address for England/Wales (PO Box 4385, [Company number]: Companies House default address, Cardiff, CF14 8LH), the default CH address for Scotland (PO Box 24238, Edinburgh, EH7 9HR) or the company has the default CH NI address (2nd Floor, The Linenhall, 32-38 Linenhall Street, Belfast, BT2 8BG) or does not have an address reported at all.

This flag is not found otherwise.

Limited Reporting Requirements

The flag is high if the company itself is reported to exist and/or has their correspondence address in a country on the Common EU list of non-cooperative third-party jurisdictions for tax purposes. 

This flag is not found otherwise.

Persons of Significant Control

This flag is high if:

• The company is in the UK AND
• No Persons of Significant Control were reported.

This flag is not found if:

• The company is in the UK AND
• Some or all Persons of Significant Control were reported.

If the company is not in the UK, the flag will not appear on the report at all. This is because the PSCs are a UK-specific concept.

High-Risk Industry

This flag is high if:

• SIC code was reported and SIC codewas matched to any of the high-risk industries on the Legal Sector Affinity Group Anti-Money Laundering Guidance for the Legal Sector.

This flag is not found if:

• SIC code was not reported OR
• SIC code was not matched to any of the high-risk industries.

Online Presence

This flag is high if no website was found for the checked company.

This flag is not found if a website is returned.

Sanctions and Adverse Media

This flag is high if screening results were reported for the checked company.

This flag is not found otherwise.

What should I do if something is flagged?

Red Flag Results help you make informed decisions based on your own risk-based AML & compliance requirements. If you have any concerns regarding any highlighted flags, please refer to your internal compliance policy.