Compliance in the logistics sector
Marius de Groot (United): “As a logistics service provider, you can get excellent support.”
Compliance. For many international logistics service providers, it’s an increasingly heavy burden. First, the sheer volume of rules and regulations to fight money laundering, crime and the financing of (state) terrorism only keeps growing. Banks set increasingly stringent demands for their long-standing clients. Not to mention the ever-expanding package of sanctions resulting from the war in Ukraine. How can you adequately prepare yourself for the future in this environment? Marius de Groot, managing director of United in Amsterdam, holds some answers. “As a logistics provider you have plenty of good options to partially or wholly outsource your processes, and that also goes for compliance. That’s what specialists are for.”
Doing nothing is not an option
“We’re seeing many of our clients struggle with this,” says De Groot. “As a distribution country, the Netherlands is home to many logistics service providers. We support a number of them, but also extend our legal and financial services to international shippers and the clients in their relationship network. The question on everybody’s lips is: how do you keep up with the ever-changing legislation and regulations? An understandable concern, considering the fast pace of these developments, especially now. And you can’t just stick your head in the sand, of course. For ethical reasons, but also because of the severe consequences of non-compliance: fines, legal proceedings, personal liability of directors or worse. Doing nothing is not an option. That’s why we have invested in advanced compliance systems. And we offer them to our clients as well.
Check all current sanctions for free!
Russia and Belarus, as well as numerous organisations and individuals, are subject to the extensive package of international sanctions resulting from the war in Ukraine – and the situation is constantly changing. To enable companies to comply with the sanctions, Vartion and United have decided to make a free Sanctions Check available within compliance support platform Pascal.
Click here to explore Free Sanctions Screening
This is what Pascal checks:
- Worldwide sanctions lists
- Lists of Politically Exposed Persons (PEP)
- Global news data
Because of the highly dynamic nature of the situation, Vartion has further fine-tuned the update policy for Pascal, so that no change in sanctions goes unnoticed. Thanks to Free Sanctions Screening you can now rest assured that you have the most up-to-date information at your fingertips.
Would you like to get to know the full functionality of Pascal? Start exploring here.
Compliance as a Service
For United, compliance is essentially a licence to operate. As De Groot explains: “The financial industry has long been under the scrutiny of governments, regulatory bodies, the press, and the general public. For us, as a regulated financial service provider, it goes without saying that compliance is an important part of our daily processes. But if you’re a logistics service provider, to take that example again, you want to focus your attention on logistics processes and related services. Compliance is really our expertise, so we’re coming forward to say: you can leave it to us. And that’s working like a charm.” United calls this Compliance as a Service, or CaaS. Read more about CaaS offering under Our Solution.
This is United’s Compliance as a Service:
- Compliance Screening and Monitoring – screening of customers and third parties at the onboarding stage, and continuous monitoring for concerning changes (using compliance support platform Pascal).
- Compliance Reporting – periodic reporting with feedback on findings and resolved items, optionally supplemented with instant alerts when we identify serious risks.
- Compliance Policy Framework Review – analysing the compliance policy and the policy documents (internal rules and manuals for daily operations) that have been drawn up for this purpose.
Screening and monitoring
For logistics service providers, screening and monitoring new customers and third parties (including business relations such as intermediaries and suppliers) is in many cases a major challenge. But it’s a legal obligation: you have to know everything about your customers, their ultimate beneficial owners, their customers and their transactions; and once you start doing business, you also have to keep a constant eye out for any changes in their situation that could put you at risk. United itself has decided to invest in compliance and systems right from the start, which ultimately benefits United’s clients as well. One of the most groundbreaking tools in United’s arsenal is Pascal, a highly advanced and reputable system for screening and monitoring.
Pascal: AI-driven compliance support platform
De Groot: “When the financial crisis began, we could already foresee a major increase in regulation concerning Client Due Diligence (CDD) and Know Your Customer (KYC). We designed our own procedures accordingly. At the same time, we were looking for a way to simplify our many compliance processes and even automate them where possible. In doing so, we met the founders of Vartion, which was still a start-up at the time. In 2017, we entered into a partnership with them. We saw Vartion as a very promising specialist in Artificial Intelligence (AI) and data analytics, who had everything we needed to build the solution we were looking for. The result was Pascal, a unique AI-driven compliance support platform. At United, we use Pascal to screen clients during the onboarding process and continuously monitor them once aboard – as is required by law. But we also offer Pascal to our clients as a primary service within CaaS.”
Comfort in certainty
At breakneck speed, Pascal performs the laborious tasks that had to be done manually until quite recently. It screens individuals, legal entities and companies for inclusion in sanctions lists and PEP lists (PEP stands for Politically Exposed Person – this is reason to be more alert to bribery and abuse of power). It checks public business sources across the globe, including data from Chambers of Commerce or World-Check, and data provided by users themselves. And the most remarkable thing: thanks to its advanced AI, it’s able to “read” and interpret international media in dozens of languages, looking for negative news stories (“adverse media”). De Groot: “The information Pascal retrieves is more complete and reliable than that of other systems. Among the hits, there are far fewer false positives: results that look suspicious but are not, but do require human attention. The speed and accuracy with which Pascal does its work gives a tremendous boost to the efficiency of the compliance process. You can enjoy the comfort of certainty as you spend the freed-up time to concentrate on your core business.”
As part of CaaS, United deploys Pascal to manage the most concrete part of the compliance process. It’s the perfect solution to automate the bulk of the time-consuming screening and monitoring process. “You send us a list of customer data through a secure and discrete channel, and we put Pascal to work. During the first use the full list will be processed, but subsequent uses only require you to provide the data acquired during the onboarding process of new customers. Existing customers and all their relationships and activities will continue to be monitored. Any hits that come out of Pascal also need to be assessed: do they really pose a risk or are they false positives? We take care of that too. Obvious cases we solve immediately, doubtful cases we discuss with you. The next step is Compliance Reporting. You’ll receive periodic updates and reports at the frequency and the level of detail that we agree in advance. Should Pascal detect a real red alert situation, you will of course be notified immediately so we can determine whether you need to take any steps.”
Concentrate on what matters: logistics
“It’s clear that the pressure of compliance is only increasing. International banks are investing heavily to meet their more and more stringent obligations. So how do you manage that if compliance is supposed to be a side issue for you? For United, it’s not a side issue. We’ve built up a wealth of knowledge and experience with compliance – because we deal with it ourselves and because our clients have to deal with it – and all that knowledge and experience is available for your benefit through Compliance as a Service. Including Pascal’s supreme intelligence. Compliance doesn’t have to be a challenge. As a logistics service provider, you can get excellent support with CaaS. Let us enable you to concentrate on what really matters: logistics.”