Due diligence is required when a customer or business is at greater risk of money laundering, terrorist financing, and other financial crimes. This is known as enhanced due diligence which goes beyond the standard KYC/AML checks in order to gather details that are not in the normal scope.
This includes identifying individuals and organizations behind customers, like the ultimate beneficial ownership (UBO) and identifying the true source for wealth and funds as well as business activity. Additionally, it examines the relationship behind it and investigates unexplained transactions and actions that could indicate hidden risks.
It’s a key aspect in the fight against criminal and terrorist funding. It’s important to remember that EDD is a security measure which should be applied on a case by case basis. For example the case of a UK bank account opening with a clean passport, a good address history and no CCJs might only require CDD, while a different customer might require EDD due to the large quantity of cash deposits or complex transactions.
The best way to determine whether EDD is required is to design a thorough risk analysis and screening framework. This should include both your internal controls and external factors like negative media or sanctions, political instability as well as terrorism finance, organized crime, money laundering and fraud.
In the end, effective due diligence isn’t just about meeting the requirements of regulatory agencies or protecting your check these guys out https://warpseq.com/board-software-pricing-breakdown-detailed-review-of-the-cost/ brand’s reputation. It’s about making a difference in the fight against criminality in the world. You require an identity verification and EDD system that’s fast, accurate, and cost-effective to achieve this.