Navigating The Complexity of Ownership From The Lens of Sanction By Extension
Tuesday, 30th April. 13:00 - 14:00 London Time (GMT+1)
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The KYB serves as the primary data source for verifying businesses and conducting corporate due diligence in over 250 countries and states.
Navigating the Complexity of ownership from the lens of Sanction by Extension
Mitigating Business verification complexity with The KYB in MENA Region
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Mitigating Business Verification Complexity with The KYB in MENA Region
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KYB stands for Know Your Business, which is a due diligence process that companies use to verify the identity and legitimacy of their business partners or customers.
12 March, 2024
The Digital Market Act is the EU’s first law to regulate “gatekeepers.” Gatekeepers are digital media platforms providing online apps, search engines, messenger services, etc. Six businesses were named gatekeepers according to the European Group in September 2023: Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft. These gatekeepers hold one core digital service from the various online platforms. To safeguard from illicit activities, they must comply with the latest DMA regulation according to updated requirements before March 2024.
The European Commission proposed the Digital Market Act and Digital Service Act in December 2020 to combat growing scams in online services. DMA aims to create a secure environment for businesses and consumers. The DMA came into effect on November 1, 2022. Companies offering critical platform services must notify the Commission and submit all pertinent information within two months of that date, assuming they satisfy the quantitative requirements.
In April 2023, the Commission disclosed the very large online platforms (VLOPs) and two very large online search engines (VLOEs). The VLOPs included Google Maps, Google Play, Facebook and Instagram, LinkedIn, TikTok, YouTube, and Zalando. Moreover, Bing and Google were added to the VLOEs. They stressed that these platforms have 45 million active users, so they must comply with DMA in five months. The commission extended this date in September 2023 till March 2024.
When it comes to regulating online money-making machines, including Google, Meta, and Amazon, the EU’s Commission constantly upgrades its obligation to protect the integrity of the global economy. The DMA is implemented along with the EU’s Competition Laws and General Data Protection Regulation (GDPR) to mitigate the power of digital platforms and supervise their activities. The Commission also imposed the Fines for noncompliance with the DMA might equal 10% of a company’s yearly revenue.
Interoperability- the first requirement is compatibility with the third-party sellers in the online platforms. Communications with third-party service providers to provide the same level of opportunity for competition. This will assist the government in monitoring if they are preventing small businesses from selling on their platforms and providing the same service as their competition. They also don’t have the right to surpass their competitor’s service by offering the same product and service as the competition.
Data Protection- Customer confidential information breaches are a significant global threat. EU obliges gatekeepers to secure the consumers’ data in high-bolstered cloud-based databases. The Gatekeeper is prohibited from processing end users’ data obtained through third-party services that utilize the Gatekeeper’s core platform features to offer online advertising services.
Transparency – under DMA, online platforms must inform users about the data they store and share for advertising. Consumers should decide which information they want to disclose or what they do not, including the notification enable. The companies require transparency about the purpose, duration, and impact of consumer profiling. In addition, gatekeepers have to make sure that every attempt is taken to get consent from users and give them the ability to revoke or refuse consent for the gathering and utilizing their data.
The gatekeepers comply with rigid regulations, including AML, KYB, and GDPR. Now, DMA EU’s latest regulations raise the bar and cost for online service providers to combat cybercrimes. DMA compliance is not cost-efficient; It will expose companies to significant challenges in the future. In order to comply with DMA compliance standards, it will probably be necessary to make adjustments to data collecting and processing procedures, upgrade equipment, and take other steps. Regulators will be crucial in enforcing the rules and ensuring gatekeepers follow them rather than merely regarding data sharing obligations and other measures.
Eight online core platform sectors must comply with the DMA in March 2024. Below are the gatekeepers from the European Commission:
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