Why are CDD and EDD important?
Customer Due Diligence (CDD) and Enhanced Due Diligence measures are crucial steps in ensuring effective compliance with the Anti-Money Laundering (AML) framework in Singapore, preventing criminals from misusing innocent businesses and institutions for their illicit activity. Regulated entities can identify and reduce the risks of Money Laundering and Terrorism Financing (ML/TF) by putting CDD and EDD measures into practice.
CDD measures such as:
- Customer identification and identity verification through Know Your Customer (KYC)
- Customer Screening
- Understanding Business Relationship
- Customer Risk Assessment
Enhanced Due Diligence measures include:
- Obtaining senior management approval for establishing or continuing business relationships with high-risk customers
- Determining the source of funds and source of wealth
- Conducting enhanced ongoing monitoring
Implementing EDD measures demonstrates the dedication and commitment of the regulated entity in implementing controls to combat ML/TF risks and elevates customer trust and confidence.
To learn more about EDD visit this informative article.