GlossaryEN1 min readUpdated: Jun 26, 2026
Know Your Customer (KYC)
Freight forwarders, customs brokers, and logistics operators are legally required to identify and verify their business partners and customers through Know Your Customer (KYC)—a core compliance mechanism against money laundering, fraud, and terrorist financing.
Quick Answer
Last updated: Published:
Source: https://www.investopedia.com/terms/k/knowyourcustomer.asp
Category
Find a matching partner on this lane
Reading time
1 min
Words
129
Mentioned in
–
Definition & Explanation
Freight forwarders, customs brokers, and logistics operators are legally required to identify and verify their business partners and customers through Know Your Customer (KYC)—a core compliance mechanism against money laundering, fraud, and terrorist financing. The process covers company registration, beneficial ownership, business activities, sources of funds, and any history of sanctions violations or criminal proceedings. Risk assessment is central: the customer's industry, jurisdiction, and transaction patterns are evaluated for potential exposure. KYC is an ongoing obligation, not a one-time check—monitoring must intensify whenever business relationships or transaction volumes change materially. Failure to comply exposes firms to regulatory fines and serious reputational harm. Unlike Enhanced Due Diligence (EDD), standard KYC applies across the general customer portfolio; EDD is triggered only where the risk profile demands a deeper level of scrutiny.
Next steps
Matching tools and partners
Related Terms
You might also be interested in these terms
Connect
Find a matching partner on this lane
Verified forwarders, ranked by coverage and profile — premium capped at 10%.
Logistics knowledge straight to your inbox
Free · No password · Never a paywall. Weekly top news and facts from logistics.
Community Questions & Answers
Share your knowledge, ask follow-up questions, or add practical insights to this page. Every contribution is moderated before publication.
No community answers yet. Be the first.