Introduction

Whilst it remains the responsibility for each individual organisation to manage its own risk appetite in deciding whether to trade with a particular counterparty, obtaining KYC information is a common process shared across the industry. Currently, similar questions are asked in a variety of ways, leading to considerable effort in handling different formats with different counterparties, causing unnecessary confusion and with the potential for errors which could prove very costly.

Vision for Value Creation

A common format for gathering the initial information, understandable to all, unlocks a step change, allowing KYC expertise to focus on the assessment, and what specific follow-up is necessary, rather than unnecessary effort in iterative chasing for the basic information amongst a variety of formats. A standard format also allows receiving companies to consider how they can further refine their handling of such information through Digitisation and the adoption of AI.

What is Published

Members of Energy LEAP have worked together, leveraging some of the learnings in the banking industry to design a simple, high level CDDQ for suggested use by organisations in the energy sector. This is specifically designed for obtaining Know Your Counterparty (KYC) information from third parties to enable initial risk assessment and screening.

Whilst the CDDQ is not a comprehensive list of all legal obligations in respect of KYC due diligence, it contains questions across four core topics; Entity Identification, Ownership and Control, Nature of Business and General Compliance, as well as additional questions on Financial Crime KYC, Anti-bribery and Corruption, Sanctions and Trade Compliance and Environmental, Social and Governance matters.

The provision of this tool by Energy LEAP leaves each organisation to decide how the use of CDDQ can support its own internal policies, procedures, and operational realities.

The publication download includes a glossary of terms, Frequently Asked Questions (FAQ), as well as the CDDQ template itself. This can be downloaded here.

Should you wish to provide input to this ongoing work, you can utilise the Energy LEAP contact form as found here.