An Introduction to KYC Regulations for Startups & Small Business

As a fact of the matter, to succeed as an entrepreneur, you must know your customer. The KYC or know your customer is actually an act that is implemented to make sure that money laundering is not only detected but measures are taken to eliminate it.

The act was passed in 2013 and for the years to follow it has completely dominated the financial landscape. It is just due to the fact that the laws under this act make money laundering almost impossible. Not just the banks but all financial institutes are required to implement KYC in full. The European Union, as well as Eurasian Economy, has completely accepted it.

There are many advantages that are associated with this awesome law. Some of these are as follows:

1- Say NO to terrorism

KYC has ensured over the period of time that terrorism is not financed at all. From 9/11 to 7/11 it has been proven a countless number of times that money laundering was the main reason of these activities. Have there been no embezzlement these events would not have taken place. KYC in this regard ensures that the greatest challenges for anti-money laundering are met. These challenges are eliminated to make sure that KYC works in its best form.

 

2- Covering AMLR requirements

There are many requirements to anti-money laundering. There is no way all these requirements are met if there is no proper law in place. AMLR are not only mentioned in KYC but there are steps to fulfill all the requirements. It ensures that the best outcome is generated which curbs money laundering. AMLR costs, their comparison with GDP, cost cutting, and overall success rate are all met with KYC. This law is, therefore, a combination of efficiency and effectiveness and therefore should be implemented in its original form.

 

3- Increasing the impact

It is a known fact that AMLR implementation was not as rigorous as it should be. KYC increases the importance of AMLR and makes its implementation strong. KYC is actually a strong message to all financial institutes that money laundering and cash embezzlement stood no chance. The security of economy, as well as the country, is also made stronger with this awesome law. KYC further ensures that the impact is far reaching for the years to come. KYC once implemented in its true sense will remove the combination of cash and terrorism. Increased impact will also make sure that KYC gets the desired results to the financial institutes.

 

4- Reconciliations

Finance is all about cash reconciliation. Money laundering only occurs if the reconciliations are not made or people making it are dishonest. KYC does very best in this regard to ensure that never happens. The primary focus of KYC is all the cash intensive transactions of financial institutes. Auditing is done by taking samples of all major transactions. It also ensures that the work done in this regard meets the international standards. From offshore bank accounts to black money turned white KYC deals with all forms. KYC also forbids the integration of funds in the normal economy. The earlier steps of KYC make sure that these funds are never released in the normal economy.

 

Here you can learn more about KYC Regulations.

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