ShankuChakra Protocol
SCP-002 — Buyer KYC Protocol
Revision date: 2026-09-01
Purpose
To perform reasonable due diligence on a prospective buyer before committing to production, shipment or extending payment flexibility, reducing the risk of non-payment or fraud.
Scope
Applies before confirming a first-time order with a new buyer, and periodically for existing buyers with materially larger or changed order patterns.
Definitions
- KYC
- 'Know Your Customer' — the process of verifying the identity and legitimacy of a business counterparty.
- Beneficial owner
- The individual(s) who ultimately own or control the buyer entity.
Required Information
- Registered company name and registration/incorporation number
- Business address and country
- Import license or relevant trade registration, where applicable
- Bank details for the buyer's issuing/paying bank
- Trade references or prior transaction history, if available
- Website and any public business profile
Procedure
- Request company registration documents and verify against a public or official registry where accessible.
- Cross-check the company website, contact details and business activity for consistency with the stated line of business.
- For first-time buyers, prefer safer payment structures (e.g., advance payment or confirmed LC) until a payment track record is established.
- Verify banking details independently before sharing bank account information or accepting payment instructions received only by email.
- Record KYC findings and any open concerns before final order confirmation.
Checklist
- Company registration verified
- Business address and contact details cross-checked
- Bank details verified through an independent channel
- Payment terms appropriate to buyer risk level
- KYC findings documented
Documents Required
- Company registration certificate or equivalent
- Buyer bank details (verified)
- Trade reference(s), where available
Risks
- Email-based payment instruction fraud (business email compromise)
- Dealing with an unregistered or shell entity
- Extending open account terms to an unverified first-time buyer
Common Mistakes
- Accepting changed bank details received only by email without independent verification
- Skipping KYC because the enquiry appears urgent or high-value
- Not documenting KYC checks performed, making later disputes harder to resolve
Verification Points
- Has the buyer's registration been checked against an independent source?
- Have bank details been verified outside of email correspondence alone?
- Is the payment term appropriate for a first-time or higher-risk buyer?
Disclaimer
This is a ShankuChakra recommended operational protocol, not an official government, regulatory, or international standard. It reflects common industry practice and should be adapted to the specific buyer, product, destination and contract. Always verify current legal, regulatory and customs requirements with the relevant authority before relying on this protocol for a commercial shipment.