Enhanced Due Diligence

Enhanced due diligence is a due diligence based on risk process that allows businesses to effectively handle high-risk customers and transactions while remaining in compliance with the requirements of regulatory authorities. When properly implemented, it protects businesses from serious legal penalties and reputational damage while ensuring that their Anti-Money Laundering (AML) and Customer Due Diligence (CDD) procedures are efficient in combating financial criminality.

Often, EDD is required when the transaction or customer is deemed high-risk because of complex ownership structures, political exposure or involvement in sectors that are prone to financial crime. A significant change in the customer’s behavior, like an increase in volume of transactions, or the creation of new types of transactions may be a reason for an EDD. Additionally, any transaction that involves a country or region with higher risks of money-laundering or terrorism financing is likely to require an EDD.

EDD is focused on the identification of beneficial owners and uncovering potential risks that are not obvious, such as the real beneficiaries of a transaction or a account. It also identifies suspicious and unusual patterns of behavior in transactions and validates the information with independent interviews and checks, as well as site visits and third-party confirmation. The risk assessment is completed by a thorough examination of the local market’s reputation using media sources and the existing AML policy.

EDD isn’t just a legal requirement, it’s a crucial element of protecting the integrity of the global financial system. Implementing EDD procedures that are effective check these guys out https://warpseq.com/board-software-pricing-breakdown-detailed-review-of-the-cost/ is not just an issue of compliance. It’s an investment into the safety and security of the global financial system.