Enhanced Due Diligence

Enhanced due diligence is a risk-based due diligence process that allows businesses to effectively handle transactions and customers with high risk while remaining compliant with the regulations. When properly implemented it safeguards businesses from severe legal penalties and reputational damage while ensuring that their Anti-Money Laundering (AML) and Customer Due Diligence (CDD) procedures are effective in combating financial criminality.

EDDs are typically required when a transaction or customer is deemed to be high risk due to complex ownership structures or political risk. EDDs may also be required if a customer is in an industry that is susceptible to financial crime or money laundering. A significant change in customer’s behavior, for example, an increase in volume of transactions or the introduction of new types of transactions, may be a reason for an EDD. Also, any transaction involving an area or country that is more prone to terrorist optimizing data flow in acquisitions with VDR’s structured repositories financing and money laundering requires an EDD.

EDD is focused on identifying beneficial owners, uncovering hidden dangers, like the real beneficiaries of a transaction or account. It also detects suspicious and unusual patterns of transactional activity and validates the information with independent interviews and checks, site visits and confirmation from a third party. A review of local market reputation by examining media sources as well as existing AML policies round out the risk assessment.

EDD isn’t only a requirement for regulatory compliance; it’s an essential element in safeguarding the integrity of global financial system. Implementing EDD procedures that work is more than just a matter for compliance. It’s an investment into the safety and security the global financial system.