KYC, otherwise known as Know Your Customer or ‘Customer Due Diligence’, refers to a set of practices that companies regulated by Money Laundering regulations must apply. The key obligations are to verify the identities of Customers and certain beneficial owners, obtain additional information about Customers’ sources of wealth, their occupations etc., and to monitor Customer financial activity.

This refers to the obligatory approach that must be taken by regulated businesses to target anti Money Laundering resources in a proportionate manner, and especially to areas of business where the risks of Money Laundering or terrorist financing are high. The most recent international regulations also make it necessary for regulated businesses to apply either simplified KYC (for low-risk customers) or enhanced KYC (for high risk customers) in specific situations.

 

The types of identification that you should obtain and verify varies dependent on the type of Customer, the transaction involved and the nature of business relationship. The golden rule however, is that the information should be verifiable using independent and reliable sources.

 

 

 

This will depend on the type of Customer you are dealing with, but in order to compensate for the higher risk that this type of business relationship involves, you should obtain and verify evidence in a more rigorous manner than you would do for face-to-face business interactions.