Glossary
What is Know Your Customer (KYC) in trade?
Know Your Customer (KYC) in trade is the due diligence a business performs on its counterparties customers, agents, forwarders and end users — to establish who they really are and whether dealing with them is lawful. |
What does trade KYC cover?
- Identity and beneficial ownership of the counterparty
- Screening against sanctions list and denied-party lists
- Whether the stated end use and destination are plausible
- Payment routes and any third-party intermediaries involved
- Red flags: vague end users, illogical routing, payment from unrelated jurisdictions
Trade KYC is not financial KYC
Banking KYC asks whether the money is clean. Trade KYC also asks whether the goods should move at all whether an export control, sanction or embargo applies to this customer, this destination or this end use. The two overlap, but they answer different questions.
Who carries the liability
The exporter, not the bank and not the freight forwarder. Sanctions breaches are treated strictly: not knowing is rarely a defence where reasonable checks would have surfaced the problem. Outsourcing the shipping does not outsource the obligation.
iCustoms keeps counterparty and licence checks attached to the declaration, so due diligence is evidenced. |
