Failure to comply with Know Your Customer (KYC) requirements in ...

Intermediaries penalized for negligence in verifying clients' identities, facilitating attempted export of banned goods.

Case Laws Customs

September 24, 2024

Failure to comply with Know Your Customer (KYC) requirements in an export transaction involving banned goods (Red Sanders) resulted in the imposition of penalties u/s 114(i) of the Customs Act, 1962. The appellants, Shri Arup Mukherjee and M/s. Bose Enterprises, acted as intermediaries without adhering to prescribed procedures, neglecting to ascertain the identities and verify the credentials of their clients. Their defense that no allegation of abetment was made against them was rejected. Their omissions facilitated the attempted export of banned goods through a chain of intermediaries, and their lack of due diligence in fulfilling KYC requirements was considered a serious and deliberate omission. Although the appellants did not make a convincing case for non-imposition of penalties, considering the circumstances, a penalty of Rs. 4,00,000/- each was deemed appropriate to meet the ends of justice.

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Failure to comply with Know Your Customer (KYC) requirements in ...

Intermediaries penalized for negligence in verifying clients' identities, facilitating attempted export of banned goods.

Case Laws Customs

September 24, 2024

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