As the world continues to turn into increasingly riskier, anti-money washing (AML) and other compliance strategies need to progress as well. Increased due diligence (EDD) is normally an advanced higher level of KYC that dives dark into assessing high-risk customers, transactions and business associations. It goes beyond the standard individuality verification and risk assessment steps of Customer Due Diligence (CDD), to include extra checks, stringent monitoring procedures and more.

Contrary to CDD, which can be typically accomplished prior to starting up a business marriage and can quite often be automatic, EDD is certainly triggered by specific people, businesses, areas or countries that offer a greater risk of money washing or various fraud. During EDD, the info collected is more in-depth safeguarding sensitive information with advanced encryption and may include screening meant for financial transgression risks like sanctions email lists, adverse media channels studies and more.

When to Use Increased Due Diligence

When CDD may be a critical AML requirement for almost all companies, it might be difficult to distinguish red flags to get high-risk people and businesses. That’s why EDD is used to screen for much more complex risk indicators, just like PEPs and the close contacts and members of your family. It’s as well used to carry out in depth research into people or entities diagnosed with a history of financial crime, just like criminal activity, tax forestalling, corruption and terrorism.

Is also used to review the organization background of your business, such as details of their management group and final beneficial owners (UBOs), and reviewing company documents just for red flags. When you require to perform EDD, it’s necessary to understand the dangers and how to do it proper.