What Is Enhanced Due Diligence?

If a business or customer is at a greater risk of money laundering, terrorist financing and other financial crimes, they must be subject to an additional level of due diligence. This is known as enhanced due diligence, which goes beyond the standard KYC/AML checks to gather details that are not in the normal scope.

This includes identifying the people and entities that have a connection to clients, such as the ultimate beneficial ownership (UBO), uncovering the source of wealth as well as funds and business activity. Also, it investigates unproven activities and transactions and investigates the underlying connections.

It’s an important tool to fight criminal and terrorist funding. However it’s important to keep in mind that EDD should be applied on a case-by-case basis. For instance an UK bank account opening with a clear passport, a good address history and no CCJs may not require CDD, while a different customer may require EDD due to the large amount of cash deposits or the complexity of transactions.

The best way to determine if EDD is required is to establish a comprehensive risk analysis and screening framework. It should encompass your internal controls as well as external factors such as negative media as well as sanctions, political instability and terrorism finance and organized crime, as well as fraud and money laundering.

Ultimately, effective due diligence isn’t just about satisfying regulatory requirements or protecting your brand’s reputation. It’s about making a difference on the fight against global crime. You need an identity verification and EDD system that is swift precise, reliable, and cost-effective to accomplish this.

https://warpseq.com/virtual-data-room-pricing-what-you-need-to-know/