KYC/Due Diligence

Below we have outlined a KYC / Due Diligence case study that illustrates the kind of challenges we help our clients to tackle and the advantages we can deliver. This is just a small selection of our experience – if you would like to discuss a specific intelligence requirement, please contact a member of our team.

Introduction to service area:

Over the last 30 years, the global commodity trading and freight markets have faced an increased requirement for transparency. The traditional layers of trust and long-standing relationships have been broken down by a flood of new industry entrants, including completely opaque physical or derivative market speculators, and longer term investors from outside the industry who wish to enforce more established KYC and compliance procedures.

This process has accelerated more recently, as external compliance requirements have been enforced, in particular anti-bribery and sanctions avoidance. Infospectrum’s long experience in the commodity trading and freight sectors, and its knowledge of the unusual and often highly complex corporate structures used in these sectors, helps our clients meet their KYC and due diligence obligations, even for some of the most low-profile, off-shore registered companies.

Case background

Our client had the opportunity to trade with a Geneva-based commodities trader, but was concerned about the subject’s potential exposure to sanctioned entities in Russia. Our client had significant business dealings in the United States, and could not afford the significant financial and reputational damage that would have occurred if it had been found to be dealing with a sanctioned entity. It already had access to online data sources, but wanted to ensure it had up-to-date and more informed feedback.

How did InfoSpectrum proceed?

We are well aware that certain Russia-linked companies have been viewed as being sanctioned, without due cause. Equally, we are aware that others have made efforts to distance themselves from sanctioned individuals and companies (but not to the extent that dealing with them could be described as free from sanctions-related risk). Using our contacts in the region and in the specific trades, we were able to provide clear advice as to the ultimate beneficial ownership of the company concerned, and that the beneficial owners were not sanctioned at this time.

What were the impacts?

The client was able to make an informed decision and were able to trade confidently with the target company, with greater awareness of the near-term risk of sanctions being imposed.