Enhanced due diligence is a due diligence based on risk process that empowers companies to efficiently manage transactions and customers with high risk while still adhering to the requirements of regulatory authorities. When properly implemented it shields companies from severe legal and reputational harm while ensuring that their Anti-Money Laundering (AML) and Customer Due Diligence (CDD) procedures are effective in combating financial criminality.
Typically, EDD is required when a customer or transaction is classified as high-risk due complex ownership structures, political exposure or involvement in sectors that are prone to financial crime. In addition, a significant change in customer behavior for example, an increase in volume of transactions or unfamiliar types of transactions, may require an EDD. Also, any transaction involving any region or country that is more prone to financial terrorism and money laundering requires an EDD.
EDD concentrates on identifying beneficial owners and uncovering hidden risks such as the true beneficiaries in a transaction or a account. It also detects suspicious or unusual patterns in transactions, and then validates the information using independent checks, interviews, site visits, and third-party verification. The risk assessment is completed by a review of the local market’s warpseq.com tips are here reputation through media sources, and existing AML policy.
EDD isn’t just a regulatory requirement; it’s a crucial element of safeguarding the integrity of global financial system. Implementing EDD procedures that work is more than a matter for compliance. It’s an investment in the safety and security of the global financial system.