KYC/AML implications for smaller physical commodity traders post-FATF updates
Been looking into the latest FATF guidance updates, specifically as they pertain to 'virtual assets' and any spillover effects on traditional commodity markets, especially for firms dealing in physicals. It's clear the regulatory dragnet is widening, and while most of the discussion tends to focus on crypto, I'm wondering if anyone's seen increased scrutiny or operational challenges regarding enhanced due diligence for counterparties in less liquid commodity markets – think smaller regional deals, niche metals, or even some agricultural products.
Specifically, what kind of internal shifts have you had to make? Are the banks pushing harder on source of funds for seemingly innocuous transactions? Concerned that some of the smaller players, who are vital for market liquidity in certain segments, might find the compliance burden prohibitive. It's not just about avoiding fines; it's about maintaining banking relationships and operational fluidity. Any insights into how this is playing out for those not operating at the scale of a Glencore or Cargill would be valuable.
Definitely seeing more pressure on the 'source of funds' verification, even for established physical trades. It's not just crypto; the bar is clearly rising across the board, making due diligence more extensive.