KYC and compliance: what we ask, why we ask it, and what it protects

Compliance has a bad reputation as paperwork that slows deals down. In this market it does the opposite. It is the fastest way to separate a real counterparty from a costly one. What we ask for, we ask because the deals that skip it are the same deals that fall apart later, usually after someone has spent money.

• Corporate documents: incorporation, ownership and control. This confirms you are a real entity, not a name attached to an email address.
• The signatory's passport: the person signing has to have the authority to bind the company.
• Bank confirmation: for a buyer, confirmation of the bank that will issue the DLC or SBLC. That is evidence of capacity to pay, not just the intent to.
• Disclosed principals: who is actually buying and who is actually selling, from one end of the chain to the other.

Identity is the start, not the end. We screen counterparties against sanctions lists and watchlists, because cross-border trade runs on the banking system and the banks apply the same screening. A counterparty that fails it cannot be paid through a first-tier bank no matter what the contract says. It is far better to learn that during KYC than after cargo has been mobilised and money has moved.

Undisclosed multi-broker chains are the environment in which fraud grows. When no one will say who the buyer or the seller actually is, there is usually a reason, and it is rarely a good one. We do not work chains where the principal is hidden, in either direction. That rule costs us some conversations. It saves us from all the ones that were never real to begin with.