Guide · Checklist
The counterparty due diligence checklist.
A counterparty due diligence checklist is the ordered list of checks that takes a new business partner from unknown to defensibly approved: identify the entity, verify it, map its owners, screen everyone, rate the risk, decide with evidence and keep the file current. The ten steps below are the working version KYCK automates.
LAST UPDATED AUG 2026
How to use this checklist
Run the steps in order for every new counterparty and rerun the screening and review steps on a schedule for existing ones. The order matters: ownership mapping before screening means the right people get screened; risk rating after screening means the score reflects findings rather than guesses. Evidence is collected at every step, not reconstructed at the end.
The ten steps
Identify the legal entity
Start from the registry, not the email signature: legal name, registration number, jurisdiction and registered address, evidenced by a current registry extract. Trading names and group brands are noted, never substituted.
Verify registration and status
Confirm the entity exists, is active and is in good standing in its home registry, and that its license covers the business you are about to do with it.
Map ownership to the UBO
Unwind the shareholding chain to every ultimate beneficial owner, applying the 25 percent threshold where your regime requires it, and evidence each layer with documents rather than declarations.
Screen the entity and its people
Run sanctions, PEP and adverse media screening on the company, its directors and its UBOs together; record match decisions with reasons, not just results.
Screen vessels where cargo moves by sea
For maritime and trade flows, check the vessel by IMO number and screen its owning entities; a clean charterer with a sanctioned ship is still a blocked trade.
Risk-rate the relationship
Score the counterparty on jurisdiction, ownership complexity, sector and screening results, and let the score set the depth of review rather than applying one process to everyone.
Apply enhanced due diligence where triggered
PEP matches, high-risk jurisdictions and opaque structures trigger deeper verification: source of funds, extra documents, senior sign-off.
Record the decision
Approve, reject or block with a named approver, a timestamp and the evidence attached; a decision that lives in an inbox is not a defensible decision.
Set the re-screening cycle
Lists change daily and ownership changes silently: schedule re-screening and periodic reviews so the file stays current instead of aging until the next audit.
Keep the evidence exportable
The end product is the disclosure package: every check, match and sign-off exportable in one file a bank, auditor or regulator can read without you in the room.
The test at the end
A checklist is complete when a stranger could reopen the file and see what was checked, what was found and who decided. That is the standard a screening report, an ownership map and a signed approval add up to, and it is the standard KYCK produces automatically as the flow runs.
Frequently asked questions
How often should the checklist be rerun?
Screening should be continuous or scheduled frequently, because sanctions lists change daily. The fuller review cycle follows risk: high-risk counterparties yearly or on trigger events such as ownership changes, lower risk on a longer cycle. A fixed calendar alone misses the day the risk actually appears.
Does the checklist differ for commodity trading?
The spine is identical; two steps get heavier. Vessel screening becomes mandatory where cargo moves by sea, and speed matters more: a fixture will not wait a week. That is why trading desks automate the checklist rather than running it by hand for every charterer and intermediary.