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KYC and sanctions screening in aircraft leasing: what a compliant NCNDA actually requires

18 September 2026 · 5 min read

An NCNDA is the first document most aircraft introductions start with. It protects a commercial position — who introduced whom, and who gets paid. It says nothing about who the counterparty is, who owns it, or whether the aircraft may lawfully go where it is meant to go.

What an NCNDA does — and what it doesn't

A non-circumvention and non-disclosure agreement binds its signatories to each other. It identifies no one, and gives no comfort to a lessor's compliance team, a bank or an escrow agent — each of whom will run their own checks later, and stop the transaction if they fail. At the start, that work costs days. At documentation stage, it costs the deal.

The file that sits next to it

• The principals, identified. Legal name, registration number, signatories and their authority to sign — from the company registry, not from a presentation.
• Ultimate beneficial owners. Natural persons, all the way up the chain. EU anti-money-laundering rules take 25% plus one share as the indication of ownership; sanctions rules count differently — see below.
• Evidence of mandate. Who represents whom, in writing, signed by the principal. A chain in which nobody can produce a mandate is the pattern described for government tenders.
• Sanctions screening of the entity, its owners, its directors and the intended operator against the United Nations Security Council Consolidated List, the EU consolidated list of financial sanctions, OFAC's SDN List and the UK Sanctions List — the only source for UK designations since 28 January 2026.
• PEP exposure. Frequent with state carriers and government entities, and not disqualifying — provided it is known, documented and escalated, not discovered by the bank.
• Source of funds on the buy side. Where the deposit and the price come from, through which bank, in whose name. Funds move through a specialised escrow agent, never through our accounts.
• Export-control analysis of the aircraft, the destination, the operator and the registry.

Ownership: why 25% and 50% are both the right number

KYC thresholds tell you whom to look at; sanctions thresholds decide whether an unlisted company is treated as a listed one. Under OFAC's 50 Percent Rule, an entity owned 50% or more — directly or indirectly, and in the aggregate — by blocked persons is itself blocked, even if its name is on no list. Two listed shareholders at 25% each are enough. The EU's Best Practices on restrictive measures, updated in July 2024, apply the same threshold and add a control test. Screening only the name on the letterhead misses the cases that matter.

Export controls: the aircraft itself is a controlled item

Under the US Export Administration Regulations, civil aircraft, engines and parts carry a classification (ECCN 9A991), and the rules follow the asset, not the parties. A foreign-built aircraft remains subject to the EAR when its controlled US-origin content exceeds the de minimis share — 25% by value for most destinations, 10% for the most restricted. A lease between two non-US parties, for a European-built aircraft with US-origin engines, avionics or components, can still call for a US licence analysis.

Red flags we stop on

BIS publishes its own — the "Know Your Customer" Guidance and Red Flags, Supplement No. 3 to Part 732 of the EAR. Transposed to an aircraft transaction:

• The operator is not named — "to be confirmed after signing".
• The lessee, the registry or the delivery location changes late, with no commercial reason.
• Delivery or ferry routed through a jurisdiction where neither party is based.
• A chain of intermediaries in which each knows only the next link.
• A newly formed buyer, payment offered by a third party from another country, no interest in records or inspection — or urgency offered as the reason to skip a step.

One flag is a question. Several left unanswered is a declined file.

Why anonymous mandates are declined

Confidentiality towards the market is normal, and we protect it: a counterparty's name is released only once the other side is qualified. Anonymity towards us is something else. An intermediary who cannot name their principal cannot screen them or evidence a mandate. We decline those mandates before any introduction, not after.

Twice, not once — and on the record

Screening at intake is a snapshot: lists are amended continuously, ownership changes, and a lessee acceptable at LOI may not be at delivery. We screen again before closing, over the same perimeter; if that pass fails, the transaction stops, whatever has been spent — our fee exists only at closing, so the incentive is to find the problem early. Each check leaves a dated record, kept for the strictest period touching the file: OFAC has required ten years since March 2025, against five under the EAR.

We are a brokerage firm, not a law firm: none of this is legal advice, and on a live file the analysis is confirmed with aviation counsel.