Do you already do customer due diligence? With a customer survey or ‘Know Your Customer’ survey, you can find out who you are actually doing business with. And that is exactly what financial institutions, such as banks, require of you. Exporters, traders, growers, and service providers are increasingly getting questions from banks about customer relationships and specific banking transactions. The newspapers are full of it: another sky-high fine from a reputable bank for serious negligence in preventing money laundering and thus violating the Money Laundering and Terrorist Financing Act (Wwft). AgroCheck’s KYC Check allows you to comply with the Wwft.
From left to right: Mark Weitjens, Tessa Weitjens, and Bart Weitjens
Mark Weitjens, director of AgroCheck, explains: “We have been producing credit reports for companies in the floriculture sector for years, which is the basis and basically a standard client survey including credit advice. Due to the stricter requirements of the Anti-Money Laundering and Anti-Terrorist Financing Act and at the request of one of our major clients, we have added a KYC report to this by the end of 2021. The Anti-Money Laundering and Anti-Terrorist Financing Act requires you to carry out a client due diligence before carrying out any purchase and/or sales transaction or before entering into a business agreement with your client and supplying products.”
You must carry out a comprehensive client due diligence if:
- You do business with customers in high-risk countries (including Eastern European countries, Middle East, and offshore countries);
- You suspect an increased risk of money laundering or terrorist financing;
- You receive payments from a third party (often from another country), i.e. not directly from your customer;
- Your customer is a politically exposed person (PEP), or a family member or close associate of a PEP;
- The bank requires you to do so.
AgroCheck calls such a comprehensive investigation a KYC (Know Your Customer) Check, consisting of a credit report and KYC report. “We conduct extensive customer research and check the available information for accuracy through reliable sources of information. The KYC report contains a risk profile of the customer, which shows, among other things, whether the debtor complies with the conditions, whether the debtor and UBOs (Ultimate Beneficial Owners) are on sanction or PEP lists, whether there are any registered issues or procedures pending and therefore whether a business can be done safely,” says Weitjens.
“There are exporters who receive a letter from the bank with an extensive questionnaire on customer relations and leave it in the pile unanswered as they do not yet see the need for it. The follow-up letters they receive are often a little less friendly and in some cases, banks have even indicated that failure to meet KYC requirements may result in the cancellation of the bank account! So it can go that far, and only then does panic often set in. We advise businesses to get ahead of that, especially as banks’ KYC policies are getting stricter every month. With thorough research into your business relationships, you will avoid a lot of problems in the future.”
For more information:
Tel.: +31 655853923