What is enhanced due diligence?
Enhanced Due Diligence (EDD) is the stringent version of Customer Due Diligence (CDD), performed on customers that pose a high-risk of Money Laundering (ML), Terrorism Financing (TF), and Proliferation Financing (PF). It is a part of Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT) and Counter Proliferation Financing (CPF) compliance obligations of businesses. EDD involves measures such as:
• Stricter investigation into the identification and verification of the customers and their Ultimate Beneficial Owners (UBOs) as part of Know Your Customer (KYC) process
• Seeking additional details regarding nature and purpose of business relationship and transactions
• Verifying the customer’s Source of Fund and Source of Wealth
• Requiring first transaction to be conducted through a bank account in the customer’s own name
• Adverse media check
• Enhanced monitoring of the business relationship with the customer including frequent transactions monitoring on an ongoing basis
• Seeking approval from Senior Management regarding onboarding the customer or continuing the business relationship with them
• Regularly reviewing and updating the of information collected during the Enhanced Due Diligence (CDD) and KYC process
To understand EDD in detail, check out our guide here: