Risk, Legal & Compliance
Rigorous AML/CTF, Sanctions Screening, and Regulatory Adherence Across All Transactions
Our Commitment to Compliance
Black Diamond Group operates in highly regulated sectors—structured finance, trade finance, credit insurance, and international payments. Compliance with anti-money laundering (AML), counter-terrorism financing (CTF), and sanctions regulations is not merely a legal obligation; it is fundamental to our business model and reputation.
We maintain robust policies and procedures aligned with UK law, EU regulations, US OFAC requirements, and international standards including FATF (Financial Action Task Force) recommendations, Wolfsberg Principles, and ICC/BAFT trade finance compliance guidelines.
AML/CTF Framework
Know Your Customer (KYC)
Comprehensive identity verification and due diligence for all clients, beneficial owners, and counterparties. We collect and verify:
- • Company incorporation documents and structure
- • Beneficial ownership registers (25%+ ownership)
- • Identification documents for directors and signatories
- • Proof of registered address and trading address
- • Financial statements and source of funds/wealth
Sanctions Screening
All parties screened against international sanctions lists including:
- • UK HM Treasury Consolidated List
- • EU Sanctions List
- • US OFAC SDN and Sectoral Sanctions Lists
- • UN Security Council Consolidated List
- • Politically Exposed Persons (PEP) databases
- • Adverse media and financial crime databases
Transaction Monitoring
Ongoing monitoring of client transactions for unusual patterns or red flags:
- • Inconsistency with stated business activity
- • Unusual payment routes or jurisdictions
- • Structuring to avoid reporting thresholds
- • Involvement of high-risk countries or entities
- • Changes in beneficial ownership or control
Suspicious Activity Reporting (SAR)
Procedures in place to identify, escalate, and report suspicious activity:
- • Designated Money Laundering Reporting Officer (MLRO)
- • SAR submission to UK National Crime Agency (NCA)
- • Transaction suspension pending clearance when required
- • Training for all staff on red flag identification
- • Regular internal audits and compliance reviews
Non-Performance Bonds: Purpose & Structure
In certain structured finance and trade finance transactions, Black Diamond Group or its partner institutions may require a non-performance bond from the client. This is a common risk-mitigation mechanism in complex cross-border transactions, particularly where third-party costs are incurred upfront on behalf of the client.
What is a Non-Performance Bond?
A non-performance bond is a cash deposit or bank guarantee provided by the client at the outset of a transaction. It serves as security to cover costs incurred by Black Diamond Group, its banking partners, or insurance providers in structuring, documenting, and executing the transaction—particularly in cases where the transaction involves:
- Engagement of external legal counsel, auditors, or compliance consultants
- Bank due diligence, credit committee review, and documentation preparation
- Insurance underwriting fees, policy setup costs, or collateral arrangements
- SWIFT messaging, account setup, or escrow arrangements
How Non-Performance Bonds Work
1. Bond Amount
Typically 0.5% to 3% of the total transaction value, depending on complexity, transaction size, and upfront costs anticipated. For example, a £10 million transaction might require a £50,000 to £300,000 bond.
2. Deposit or Guarantee
The bond may be provided as a cash deposit held in escrow, or as a bank guarantee from an acceptable issuing bank. Cash bonds are held in a designated client account or escrow arrangement with a third-party trustee.
3. Refund Upon Completion
If the client proceeds with the transaction in good faith and complies with all contractual obligations (including providing required documentation, funding arrangements, and approvals), the bond is fully refunded upon successful completion of the transaction or at an agreed milestone.
4. Forfeiture for Non-Performance
If the client withdraws from the transaction after third-party costs have been incurred, fails to provide required documentation or approvals, or otherwise breaches the transaction agreement, the bond (or a portion thereof) may be forfeited to cover:
- Legal fees for contract drafting, opinions, and review
- Bank due diligence and credit review costs
- Insurance underwriting fees and policy setup costs
- SWIFT or account setup charges that cannot be reversed
- Third-party advisory or structuring fees
Important Clarifications
- Not an upfront fee: The bond is security, not a fee. It is refundable upon successful performance.
- Proportionate to transaction: Bond size reflects genuine third-party cost exposure, not arbitrary percentages.
- Documented in term sheet: Bond amount, conditions for refund, and conditions for forfeiture are always clearly stated in the term sheet and transaction agreement.
- Escrow protection: Cash bonds are held by independent escrow agents or trustees, not by Black Diamond Group directly, to ensure transparency and client protection.
Legal & Regulatory Framework
Governing Law & Jurisdiction
Transaction agreements are typically governed by English law, New York law, or other mutually agreed jurisdiction. Dispute resolution may be through arbitration (ICC, LCIA, or other recognised institutions) or through courts of the governing law jurisdiction. Legal opinions from qualified counsel are obtained for complex or high-value transactions.
Data Protection & Privacy
Black Diamond Group complies with UK GDPR and Data Protection Act 2018 for processing of personal data. Client information is stored securely, accessed only by authorised personnel, and shared with third parties (banks, insurers, legal counsel) only as necessary for transaction execution and with appropriate data processing agreements in place.
Professional Indemnity Insurance
Black Diamond Group entities maintain professional indemnity insurance appropriate to the nature and scale of their activities. Insurance coverage details are available upon request for qualifying professional clients.
External Legal & Compliance Advisors
For complex structures or cross-border transactions, we engage external legal counsel with expertise in banking law, insurance law, trade finance, and regulatory compliance. Clients are informed of external advisor engagement and associated costs (which may be covered by non-performance bonds or transaction fees).
Important Disclaimers
No Guaranteed Outcomes
All structures, facilities, and outcomes are subject to due diligence, KYC/AML checks, sanctions screening, credit or underwriting approval, and formal documentation. Black Diamond Group does not guarantee approval, funding, issuance, or execution of any transaction.
Indicative terms, LTV ranges, pricing, and timelines are estimates only and may change based on market conditions, issuer appetite, legal review, or regulatory requirements.
Professional Clients Only
Black Diamond Group serves professional and institutional clients only. We do not offer retail financial services, consumer credit, deposit-taking facilities, or retail insurance products. All clients are expected to have or to engage independent legal, financial, and tax advisors before entering into transactions.
Regulatory Status
Black Diamond Investment Bank Limited is not authorised or regulated by the FCA or PRA as a deposit-taking bank and does not offer FSCS-protected deposits or retail banking services.
Black Diamond Brokers Limited operates as an Appointed Representative of an FCA-authorised principal firm for insurance distribution activities only. All other services are provided by unregulated group entities and are subject to contract law, not financial services regulation.