As it is not always enough to understand how your customer earns it money. Sometimes, it is necessary to dig deeper to understand where the source of those funds comes from.

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Know Your Customer’s Customer (KYCC) is an additional compliance measure to have an even more thorough understanding of the risk profile of who you are working with. At Avallone, we like to refer to this as Know your Counterparty’s Counterparty - as we feel this is a more accurate representation to include all types of organizations that you would work together with - not just a customer.

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Similar to Know Your Customer (KYC) and Know Your Business (KYB), KYCC supplementary measures are designed to protect financial institutions against fraud, corruption, money laundering, and terrorist financing. With a thorough understanding of the business relationships of your counterparties and the activities of their counterparties - including a deep knowledge of their supply chain / business ecosystem, you can ensure the legitimacy of these organizations and minimize your risk of Passthrough Sanctions breaches and penalties - and being associated with financial crimes such as money laundering, corporate fraud, corruption and the like.

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Whether KYCC stands for “Know Your Counterparty’s Counterparty”, “Know Your Customer’s Customer” or the like, KYCC is becoming increasingly common. Even without regulatory requirements, most financial institutions and banks would expect that you can provide them with an explanation of the activities of your counterparties and proof of your processes to check on the legitimacy of your counterparties.

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