KYC – Know your Client

Money launderers need not apply ! 

Yacht Brokers have been a traditional go-to target for money launderers, Thieves, pickpockets and muggers have also used boat viewings as a way to access boats. owners and brokers.

So you need to know who, precisely, potential buyers really are.

Especially if you intend to show, or send them round with the owner to view their boat, as thieves have previously used this opportunity to slip something into their pocket, or “case the joint” before to returning and removing valuable items.

Yacht Brokers in USA must Form 8300 with IRS in respect of total cash receipts of $10,000 or more from any one client.

UK Yacht Brokers must register with HMRC if you accept €10,000 or more in cash .

The European Parliament and EU member States, agreed in January 2024 to limit cash payments within the European Union to €10,000, as part of legislation to combat money laundering.

Some countries, such as France, already have stricter rules than the new European provisions on cash payments.

But in other countries, such as Austria and Germany, cash payments have until now been unrestricted.

 

KYC is required in most countries now.

Always ask for Name. Address and phone number as a first step

In smaller transactions asking to see  an online profile(e.g. facebook) and confirming it with an ID card or driving licence will often suffice.

Any one failing to respond to these requests should be treated  with the utmost suspicion and further Investigation.

Larger sums (e.g. anything approaching a million USD) require more a rigorous approach

 

  1. Verifying the client’s identity and ensuring authenticity through KYC activities.
  2. Gathering necessary documentation to support the client’s claims and transaction legitimacy.
  3. Ensuring the client is not listed on any sanction or frozen asset lists.
  4. Evaluating the intention behind the transaction to ensure it aligns with legal standards
  5. Determining the origin of the client’s funds to avoid illicit financial activities.

 

KYC regulations call for customers to prove their identity in a variety of ways, like producing an ID card, completing facial or biometric verification, or demonstrating their identity with other documentation or database searches.

UK KYC law

KYC is also a requirement in the UK, which has some of the most robust AML and KYC regulations. The Financial Action Task Force (FATF), an international organization committed to combating money laundering, has even named the UK, “a global leader in promoting corporate transparency.”

Parliament began enacting legislation for AML and KYC in 2000. e.g.

  • The Terrorism Act of 2000, which required financial services to take numerous measures to stop the financing of terrorism, such as monitoring transactions, completing CDD, and complying with new reporting regulations.

In July 2021, HM Treasury started an amendment review of the MLRs of 2017 to further develop the UK’s AML regulatory system. As of September 1, 2022, these amendments are now in force.

EU KYC law

Anti-Money Laundering Directive was first launched in 1991. ( 1AMLD)

Subsequent directives are

6AMLD attempts to unify the definition of money laundering across the entire EU,remove potential money laundering loopholes. 

Ut seeks to achieve these by

A unified definition of money laundering across all member bodies. This definition now includes specific mentions of offences such as environmental and cyber crimes.

Deeper cooperation and connection amongst EU member states, which includes a requirement that all member states criminalise certain serious offences.

Expanded regulations around the enabling or aiding and abetting of criminal activities for inciters, initiators, facilitators, and more.

The ability to prosecute legal entities for money laundering activities, which may include criminal or non-criminal fines in addition to other sanctions.

Harsher sanctions against individuals and legal entities that participate in money laundering, which includes minimum four-year prison sentence.

USA KYC law

KYC is required in the USA as a part of AML efforts. AML regulations in the USA go back to the Bank Secrecy Act (BSA) of 1970, which was the initial piece of legislation to combat money laundering in the USA. According to the BSA, businesses must maintain records and provide reports deemed useful in tax, criminal, and regulatory problems.

As financial fraudsters enhanced their techniques, Congress determined at various points in time that additional legislation would be necessary. This resulted in new acts, including:

The AMLA of 2020 was one of the biggest updates to AML laws in the USA over the past few decades. It mandates a study of the application of innovative technologies, like blockchain and artificial intelligence (AI), to modernize AML legislation.

*This is intended as an alert that you should investigate your local liabilities and obligations . It is not legal advice. 

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