The most important risk factor in this scenario is the proposed offshore jurisdiction that is known for its strong privacy laws limiting access to customer information by law enforcement. This indicates that the customer may be trying to evade tax, hide the source or destination of funds, or engage in other illicit activities that could expose the bank to money laundering or terrorist financing risks. Offshore jurisdictions are often used by criminals to create complex corporate structures that obscure the beneficial ownership and control of the entities involved. The bank should conduct enhanced due diligence on the customer, the offshore company, and the nature and purpose of the transactions.
References:
ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 2, page 35-36, 38-39 ACAMS CAMS Certification Video Training Course, Module 2, Lesson 2.3, Offshore Financial Centers
1, CAMS Certification Package - 6th Edition | ACAMS, Offshore Financial Centers and Money Laundering
2, CAMS Certifications: How to Get CAMS Certified | ACAMS, CAMS Exam Outline, Domain 2, Task
2.3