The Hidden Dangers of Third-Party Payments
in International Trade

Why a payment from an unknown party puts your business directly in the danger zone.
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In international trade everything revolves around speed and trust. But what do you do when the invoice for a container of goods sold to Client A is suddenly settled by “Company C” from another country? At first glance the problem seems solved: the money is in. In the world of compliance, however, this is exactly the moment the alarm bells should go off.

What is a Third-Party Payment?

In a standard business transaction the flow of money mirrors the flow of goods: Client A buys from Company B, and Client A pays Company B. In a third-party payment this mirror is broken. A party with no direct legal or economic connection to the transaction executes the payment. Company C pays on behalf of Client A — but who is Company C, why is it paying, and what does it expect in return?

These questions are legally required. Under anti-money laundering legislation you, as the recipient, are responsible for establishing who the actual payer is and where the money comes from. There is also a separate obligation: you must not only know the company name of the paying party but also identify the Ultimate Beneficial Owner (UBO) — the natural person behind the company. A company name without an identifiable UBO is insufficient as evidence of a completed client check.

The Three Biggest Risks for International Businesses

Accepting a third-party payment without thorough investigation can lead to the freezing of your bank account, heavy fines or even criminal prosecution. In 2026 “I didn’t know” is no longer a valid defence — courts look at whether you should have known.

Based on current guidelines from FIU-Netherlands, the NCA (UK) and FATF, three critical risks stand out:

Trade-Based Money Laundering (TBML)

Third-party payments are an essential instrument for laundering money through legitimate trade. Criminal organisations use bona fide companies as unwitting intermediaries: the money from a third party becomes “clean” the moment it appears in your accounts as regular trading income.

Sanctions Evasion

Since the sweeping sanctions against Russia and Iran this risk has escalated sharply. A sanctioned party has a non-sanctioned company in an alternative country — such as Turkey or the UAE — make the payment on its behalf. You deliver the goods, receive the money, and have unwittingly breached sanctions.

Tax Fraud via VAT Carousels

In VAT carousel schemes third-party payments are used to make money flows so complex that the tax authority loses track. Buffer companies pay on behalf of the actual fraudster while the invoice trail points in a different direction.

Current Case Law.
 What Is Happening in 2026?

The EBA published new guidelines in March 2026: transactions where the sender does not match the contracting party must be immediately blocked for investigation. Your bank flags this — but the legal responsibility rests with you.

This is not a theoretical risk. Regulators and courts are actively enforcing:

Region / Date Case / Authority Key Facts
Netherlands
14-03-2026 		Car dealer / FIOD Fine imposed on a car dealer that systematically accepted payments from foreign entities for vehicles delivered to Dutch customers.
Netherlands
10-03-2026 		Amsterdam District Court Conviction of a trading company that "deliberately turned a blind eye" to third-party payments from offshore jurisdictions. (ECLI:NL:RBAMS:2026:142)
United States
12-03-2026 		FinCEN National Money Laundering Risk Assessment 2026: third-party payments via MSBs are the #1 method for layering in the US.
United Kingdom
15-01-2026 		FCA / Nationwide Following a record fine in 2025, the FCA is specifically targeting governance of third-party dependencies and monitoring of unusual payment patterns.

Checklist: When Should You Refuse a Payment?

Use the following red flags in your internal KYC process. With one or more hits, further investigation is mandatory — and refusal is the wisest decision.
  • Red flags in third-party payments

The payer is located in a Free Trade Zone or a country on the EU list of high-risk third countries.

The client cannot provide a written statement explaining the business relationship between them and the paying party.

The payer is a shell company: no website, no demonstrable staff, a P.O. box address or letterbox entity.

There is a round-tripping pattern: money originates from the same country as the ultimate destination of the goods, but takes an indirect route.

The payment is split into multiple smaller amounts just below the reporting threshold — a classic sign of structuring.

Download The Third Party Payment Checklist!

KYC Is More Than a tick-box Exercise

Compliance does not stop at client onboarding. It applies to every payment and every party involved — even if that party is not named in your contract. A professional KYC investigation into the paying party costs a fraction of what a fine or reputational damage would cost you.

A practical risk that is often underestimated: if your bank flags an unexplained third-party payment — without you having documented or reported it — your own bank account may be frozen. Not after a court case, but immediately, as a precautionary measure. The burden of proof then lies with you to demonstrate that you acted diligently.

For businesses subject to AML legislation — such as financial institutions, accountants, tax advisers and notaries — there is also an obligation to report unusual transactions to the relevant FIU, including suspicious third-party payments. This is an active obligation: even if you refuse the payment, a report may still be required.

Unsure About a third-party Payment?

KYC-Checks.nl swiftly and thoroughly investigates paying parties, UBOs, and trade chains. Bank-grade report, within 48 hours.
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