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Making KYC Easier When Growing Internationally—6 Tips

  • By Andrew Deichler
  • Published: 6/3/2016
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NEW YORK -- Corporate treasury professionals whose organizations are expanding internationally discussed how to make the know-your-customer (KYC) process easier at this week’s New York Cash Exchange 2016 conference.

Paul Canavan, CFA, senior director, corporate finance for Netscout Systems, a network monitoring company that recently acquired three companies overseas, explained that his department was “overwhelmed by the amount of information we needed to provide” for KYC. He added that since each country is different, it would help if banking partners would provide clients a list of KYC requirements for each country before going in.

Stuart Gleichenhaus, senior managing director, officer of the CFO Solutions for FTI Consulting, said that the KYC requirements were probably the “most painful” thing he’s had to deal with when expanding internationally. “The way, I think, to streamline that process would be for whichever law firms are involved to create a repository of all the documents that almost every country will need,” he said.

Gleichenhaus also recommends moving quickly to get your people identified in each country who are going to be the officers or directors of a new entity. Most of the time, banks are going to require their personal information—passports, signed documents, etc.—so having that ready in advance can make the process run smoother. He also believes it is essential to have a bank partner that is working alongside you that controls most or all of the accounts.

“There’s no perfect way, but that’s what I’ve found can work—get the documents ready, get the people in place, and then get the bank to help you,” Gleichenhaus said.

KYC lessons learned

In a separate session, Robert W. Campbell III, director of corporate accounting and reporting for Lydall Inc., also noted that working closely with your banking partner is crucial for KYC. “Finding that expert within that banking partner for that region is key,” he said. “In my opinion, it doesn’t hurt to get down to the nitty-gritty detail in terms of developing an action plan for a particular region to simply open up accounts.”

But before you put that action plan in place, it’s important to also bring everyone to the table—legal, tax and finance. “It’s very important to have them at the table up front because you could have one set of plans and you could be ready to go and then you find out tax or legal aren’t on the same page you are,” he said.

Campbell explained that when his company first began expanding into Europe, he didn’t follow those steps and he learned very quickly how problematic the process could be. “From that point forward, I came up with very detailed action plans in terms of moving from region to region and working with the different departments within the organization—they have to be at the table when you tackle these issues. And I found that the use of a banking partner was incredible,” he said.
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