What is CIP vs CDD vs EDD?
The Anti-Money Laundering (AML) regulations in Singapore require regulated entities to apply adequate Customer Due Diligence (CDD) measures based on a customer’s risk profile.
Customer Identification Program (CIP), commonly referred to as the Know Your Customer (KYC) process in Singapore, is an essential component of CDD.
KYC and Screening processes as a part of CDD help regulated entities assess a potential customer’s risk profile. Based on the Customer Risk Assessment (CRA), if a regulated entity is of the opinion that their potential client is a high-risk customer, then they perform Enhanced Due Diligence (EDD) measures such as:
- Establishing the legitimacy of the customer’s income level,
- Determining the source of funds and source of wealth,
- Understanding the purpose of transactions
- Obtaining senior management’s approval before dealing with such high-risk customer
Check out these resources to learn more about KYC, CDD and EDD: