{"id":2586,"date":"2021-01-12T00:29:13","date_gmt":"2021-01-12T00:29:13","guid":{"rendered":"https:\/\/blog.kyc2020.com\/?p=2586"},"modified":"2023-07-25T08:17:19","modified_gmt":"2023-07-25T08:17:19","slug":"compliance-what-does-it-mean-to-know-your-customer","status":"publish","type":"post","link":"https:\/\/www.kyc2020.com\/blog\/compliance-what-does-it-mean-to-know-your-customer\/","title":{"rendered":"What does it mean to Know Your Customer?"},"content":{"rendered":"

Keeping your business\u00a0<\/span>compliant<\/span><\/a>\u00a0when it comes to sanctions screening can be a bit intimidating. \u00a0Let\u2019s start with understanding what it means to Know Your <\/strong>Customer or Client (KYC).<\/b><\/span><\/p>\n

Banks must check the identity of their clients at the time of onboarding. \u00a0In other words, they must make sure that clients are genuine. \u00a0They must also identify the risk they represent as clients to the banking system. \u00a0Different types of clients come with different levels of risk.\u00a0<\/span>The level of risk determines the frequency of ongoing monitoring and transactional screening that must be conducted throughout the client relationship.\u00a0<\/span><\/p>\n

Lets take a look at high risk clients, and how to identify them.<\/p>\n

Sanctioned Persons and Entities<\/span><\/h4>\n

These are the individuals, companies, and organizations that are persona non grata. \u00a0They are prohibited counter-parties. You should not be doing business with them. \u00a0Depending on your jurisdiction, dealing with them can incur severe penalties. \u00a0<\/span><\/p>\n

Most government bodies and regulatory authorities publish these lists. \u00a0These are generally knows as sanction lists. \u00a0Sanction lists are regularly updated and you must continually screen your customers against these lists as part of your KYC process.\u00a0<\/span><\/p>\n

PEP’s<\/span><\/h4>\n

Politically Exposed Persons usually have a high profile political role or serve in public office. They may be at increased risk of involvement in money laundering or even terrorist financing based on their position.\u00a0<\/span><\/p>\n

Companies looking to do business with PEP’s need to disclose this and continuously monitor their transactions to ensure they are compliant and not engaging in nefarious activities.<\/span><\/p>\n

Who can fall into this category?<\/span><\/h4>\n

Here is a list people can make the PEP list.<\/span><\/p>\n