What Is Enhanced Due Diligence?

When a company or client poses a higher risk of money laundering, terrorism financing, or other financial crimes, they require an elevated level of due diligence. Known as enhanced due diligence (EDD) which is more extensive than the standard KYC and AML checks by gathering information outside the scope of normal KYC and AML.

This involves identifying the people and entities behind customers, including the ultimate beneficial ownership (UBO), uncovering the source of wealth as well as funds and business activities. It also examines the relationships behind them as well as investigates unproven transactions and activities that could be a sign of check these guys out https://warpseq.com/board-software-pricing-breakdown-detailed-review-of-the-cost/ hidden dangers.

It’s a crucial tool in the fight against terrorist and criminal funding. It’s important to remember that EDD is a security measure that should be used on a case-by-case basis. For instance, a bank account opening in the UK with an unclean passport, a solid address history and no CCJs could only require CDD. But, another customer might require EDD because of an abundance of cash deposit or complex transactions.

The best way to determine the need for EDD is to establish an entire risk assessment and screening framework. This should include both internal controls as well as external elements such a negative media, political instability and sanctions, financing of terrorism and organized crime, as well as fraud.

Effective due diligence isn’t about only meeting regulatory requirements or protecting brand reputation. It’s about making a real impact in the fight against global criminality. You require an identity verification and EDD system that is quick, accurate, and cost-effective to accomplish this.