Enhanced due diligence is a risk-based due diligence process that empowers businesses to effectively handle transactions and customers at risk while still adhering to the regulations. When implemented correctly it shields businesses from severe reputational and legal penalties while ensuring that their Anti-Money Laundering (AML) and Customer Due Diligence (CDD) procedures are efficient in combating financial criminality.
Typically, EDD is required when a customer or transaction is deemed to be high-risk due to complex ownership structures, political exposure or involvement in industries susceptible to money laundering or financial crime. Additionally, a significant shift in the behavior of a customer like an increase in the volume of transactions or the nature of transactions that are not well-known could require an EDD. Lastly, any transaction involving an area or country that is more prone to financial terrorism and money laundering requires an EDD.
EDD is focused on identifying beneficial owners, while revealing risks, such as the true beneficiaries of a transaction or account. It also identifies unusual or suspicious patterns of transactional behavior and confirms the information through independent checks and interviews, website visits and third-party verification. The risk assessment is completed by a thorough review of the local market’s reputation, based on media sources, as well as the current AML policy.
EDD is more than a requirement to ensure his explanation of Board Software Pricing Breakdown compliance and is a crucial element in ensuring the integrity of the global finance system. Implementing EDD procedures that are efficient is more than just an issue of compliance. It’s an investment in the safety and security the global financial system.
