KYC for Sales Agents and Intermediaries: What to Check

KYC for sales agents and intermediaries means verifying who the agent is, who owns and controls it, whether it or its owners sit on a restricted party list, how it will be paid, and what it is authorised to say and do in your name. It is a separate file from your customer KYC. The agent buys nothing from you. It speaks for you.

That single difference changes the risk. A customer who turns out to be sanctioned creates a transaction problem. An agent who pays a bribe, or who quietly resells your goods into a restricted destination, creates a liability that attaches to your company. Under the UK Bribery Act 2010, a company can be liable for bribery by an associated person, with a defence only where it had adequate procedures in place. Under the US Foreign Corrupt Practices Act, payments made through a third party are treated as the company’s payments where the company knew or consciously disregarded the risk.

So the agent file has to be thicker than the customer file. Below is what goes in it, how to score it, and what to do when an answer does not add up. If you want to start with the screening step, Globalior’s free screening tool runs the list checks in the browser.

Who counts as an intermediary

The label on the contract matters less than the function. If a party stands between you and a buyer, earns money from that position, or acts with your apparent authority, it belongs in the intermediary population. Common examples:

Commission sales agents and manufacturers’ representatives.
Consultants, advisers and market entry firms.
Introducers and finders paid a one off fee.
Distributors and resellers who take title but sell under your brand.
Local sponsors and mandatory local partners required by a host country.
Freight forwarders, customs brokers and logistics agents acting on your instructions.
Lobbyists, permit expediters and licence agents dealing with officials.

Enforcement history across anti-bribery cases points the same way. The large majority of actions involve conduct by a third party rather than the company’s own sales staff. That is why an agent population needs its own register, its own owner, and its own review cycle. A list of agents that lives in a sales director’s inbox is not a register.

What goes in the agent file

Identity and legal existence

Start with the certificate of incorporation, the registration number, and the registered address from the national registry rather than from the agent’s letterhead. Pull the current officers. Check the incorporation date. An agent formed three weeks before it approached you about a named tender is a fact worth recording, not a coincidence to explain away.

For a sole trader or an individual consultant, take a passport or national ID, proof of address, and a tax identification number. Ask which entity will invoice you. If the answer is a company in a third country, that company needs its own file.

Ownership and control

Get the full ownership chain to natural persons, with percentages at each layer. Shareholding is only half of it. Ask who can sign contracts, who controls the bank account, and whether any person has a right to appoint directors without holding shares. Nominee shareholders and nominee directors are legal in many places and still need to be disclosed.

Ownership percentages also drive sanctions exposure. Where a listed person holds a sufficient stake, the entity can be treated as blocked even though it never appears on a list itself. The mechanics are set out in our explainer on the 50 percent rule in sanctions screening. Collect the percentages at onboarding. Reconstructing them later, after an alert, is far harder.

Government connections

Ask directly. Is any owner, director, officer or close family member a government official, a political candidate, a party official, or an employee of a state owned enterprise. Ask about former roles and when they ended. Ask whether the agent’s appointment was suggested or required by a customer or an official. Put the question in writing and keep the signed answer. A written false answer is evidence. A verbal reassurance is nothing.

Capability evidence

An agent should be able to show it can do the work. Ask for office address and photographs, headcount, years in the sector, product training history, and two trade references you can contact independently. A serviced mailbox address, no staff, and no track record in your product line, combined with a promise of access, is the classic profile of a party selling influence rather than sales effort.

Requirements by intermediary type

Intermediary type	Function	Dominant risk	Extra items beyond base KYC
Commission sales agent	Wins orders in your name	Bribery, apparent authority	Commission basis, customer list, government contact log, anti-bribery certification
Consultant or adviser	Advice, introductions, permits	Payments with no deliverable	Scope of work, named deliverables, CVs of the people doing the work
Distributor or reseller	Buys and resells your goods	Diversion, unauthorised territory	Territory clause, end user statements, resale reporting, onward customer screening
Introducer or finder	One off referral	Success fee with no service	Written description of what was introduced, fee cap, single payment record
Freight forwarder	Moves and documents cargo	Routing through restricted parties	Sub-agent disclosure, carrier and vessel checks, cargo description controls
Customs broker	Files entries on your behalf	Wrong declarations in your name	Licence number, power of attorney, copies of filed entries, error correction process
Local sponsor or JV partner	Required local presence	State ownership, political exposure	Full ownership chain, state shareholding disclosure, board rights, exit terms

Forwarders and brokers sit in the same population even though nobody thinks of them as sales agents. They act on your instructions and their errors land on your filings. The specific checks are covered in our piece on screening freight forwarders.

Screening the agent and everyone behind it

Screen the entity, every disclosed owner above your ownership threshold, every director and officer, and the trading names the agent uses. Screen the bank account holder if it differs from the contracting entity. Screen the agent’s own sub-agents once they are disclosed. Use a free denied party screening tool at onboarding, then rescreen on a schedule rather than only when someone remembers.

Screening is not a single list. Sanctions lists, export denial lists, debarment lists and PEP data answer different questions, and an agent can be clean on one and flagged on another. If you are unsure whether your business is in scope at all, we set out who needs to do denied party screening and why the duty follows the transaction rather than the company size.

Record the result either way. A clear screen is a finding. Save the date, the name string you searched, the lists covered, and the person who reviewed the output. Our guidance on record keeping for denied party screening covers retention periods and what a reviewer expects to see.

Commission structure is a control, not a commercial detail

Most intermediary problems show up in the payment terms before they show up anywhere else. Set the rules at contract stage and apply them without exception.

Fix the commission rate in writing and benchmark it against what other agents in that market and product line charge. Keep the benchmark note in the file.
Pay only after the customer has paid you. Advance commission on an unbooked order is hard to justify later.
Pay to a bank account in the country where the agent is registered and performs the work. Refuse third country accounts, personal accounts for corporate agents, and accounts in the name of a party that is not on the contract.
Refuse cash, bearer instruments and crypto settlement for commission.
Require an invoice that names the customer, the order number, the value and the rate. Match it to the order before release.
Reimburse expenses only against receipts. Cap entertainment and travel, and require pre-approval above the cap.
Log every request to change bank details and verify it by calling a known number, never by replying to the email that made the request.

Success-only fees are not banned. They do raise the incentive to get a result by any route, so they deserve a tighter file: clearer deliverables, tighter approval, and a closer look at the customer contact list.

Red flags and what to do about each

A red flag is a trigger for a question, not an automatic refusal. What matters is whether the answer holds up and whether you wrote it down.

Customer or official insists on a named agent. Ask who made the request and why. Document it. Consider declining the appointment and quoting direct.
Agent refuses to name its beneficial owners. Stop. There is no acceptable answer that is also confidential.
Commission well above market. Ask what the extra buys. If the answer is access, that is a refusal.
Payment requested to a third country account. Refuse and ask why it was proposed. Record the exchange.
Agent will not sign anti-bribery warranties or an audit clause. Treat as a deal breaker. These clauses cost a compliant agent nothing.
No premises, no staff, recent incorporation, big promises. Request capability evidence in writing and verify two references yourself.
Agent asks for the goods to be shipped somewhere other than the stated end user country. Stop and treat it as a diversion question, not a logistics question.

The last one is where intermediary risk and export control risk meet. Agents and distributors are a common diversion route because they sit between you and the real end user. Our catalogue of red flags of sanctions evasion maps the patterns that show up in shipping and payment instructions.

Contract clauses that do real work

Diligence findings only bite if they reach the agreement. The clauses that matter are short and specific.

Fixed term, no automatic renewal. Renewal forces a review.
Warranty that no owner, officer or close family member is a government official, with a duty to notify any change within a set number of days.
Compliance with applicable anti-bribery, sanctions and export control law, named in the clause.
No sub-agents or sub-representatives without your prior written consent.
Audit rights over books and records relating to your business, exercisable on reasonable notice.
Annual written certification of continued compliance, signed by a named officer.
Immediate termination for breach, with commission forfeit on any tainted order.
Territory and end user restrictions for any agent who touches goods.

Approval, refresh and exit

Split the decision. The sales team proposes the agent and owns the commercial case. Compliance owns the file and the risk rating. Neither should be able to complete an appointment alone. For high risk appointments, government facing work, high commission, or a market with a poor corruption record, add a second approver above the compliance owner.

Set refresh cycles by tier. Low risk agents review every three years, medium every two, high every year. Then add event triggers that override the cycle: a change of ownership or directors, a new bank account, a move into a new country, a request outside the contract, a screening hit, adverse media, or a commission spike without a matching order book. Any of those should run a denied party screening check and reopen the file the same week.

Exit needs a process too. Stop new orders, settle only commission on orders already delivered and paid, recover samples and marketing material, write to customers confirming the agent no longer represents you, and cancel any power of attorney. Keep the file for your normal retention period. Dormant is not the same as terminated, and an agent left dormant on the register still appears to the market as yours.

Key takeaways

Agent KYC is a separate, thicker file than customer KYC because the agent acts with your apparent authority.
Under the UK Bribery Act 2010, a company can be liable for bribery by an associated person, with a defence based on having adequate procedures.
Collect the ownership chain to natural persons with percentages, because ownership drives both control questions and sanctions exposure.
Ask about government connections in writing and keep the signed answer, since a written false statement is evidence and a verbal assurance is not.
Pay commission only after customer payment, only to an account in the agent’s country of registration and performance, and only against an invoice matched to an order.
Refusal to disclose beneficial owners, or to accept anti-bribery warranties and audit rights, should end the appointment.
Fixed term contracts with no auto-renewal force a periodic review that a rolling contract never triggers.

Frequently asked questions

Is KYC on an agent the same as third party due diligence?

They overlap heavily. KYC covers identity, ownership and list screening. Third party due diligence adds the bribery and capability questions: why this agent, what will it actually do, how is it paid, and who does it know in government. For a sales agent you need both, in one file, reviewed by one owner.

Do I need to screen an agent who never handles the goods?

Yes. Sanctions restrictions generally bite on dealings with a designated party, not on physical possession of cargo. Paying commission to a designated person is a prohibited dealing even if the goods never go near them. Screen the contracting entity, its owners and the account holder receiving the money.

How much commission is too much?

There is no fixed ceiling. The test is whether the rate is explainable by the work. Benchmark against other agents in the same market and product line, and write the benchmark down. A rate far above the comparison set needs a documented commercial reason. If the only explanation offered is access or relationships, decline.

Can an agent be paid into a bank account in a different country?

Treat it as a refusal by default. Legitimate reasons exist, such as a genuine group treasury arrangement, but they should be documented and approved in advance. Offshore accounts, personal accounts for corporate agents, and accounts in the name of a party not on the contract are all standard warning signs in anti-corruption reviews.

What if the agent refuses to complete the questionnaire?

Record the refusal and stop the onboarding. A refusal is itself a finding and should go in the file. If the agent objects to a specific question on data protection grounds, that can sometimes be resolved with a narrower wording. A blanket refusal to identify owners or confirm government links cannot be resolved.

How often should agent due diligence be refreshed?

Set the cycle by risk tier, commonly annually for high risk, every two years for medium and every three for low. Rescreen against lists far more often than you refresh the full file, since designations change between reviews. Add event triggers so that ownership changes, new bank details or adverse media reopen the file immediately.

If you want a second opinion on an agent file, a commission structure or a screening result before you sign, get in touch with the Globalior team.