Enhanced due diligence is a risk-based due diligence procedure that allows businesses to effectively manage transactions and customers with high risk while remaining in compliance with the regulatory requirements. If properly implemented enhanced due diligence can protect businesses from serious reputational and legal damages while ensuring their Anti-Money Laundering and Customer Due Diligence processes are effective at combating financial criminals.
Often, EDD is required when the transaction or customer is deemed to be high-risk due to complicated ownership structures, political exposure or involvement in industries that are susceptible to money laundering or financial crime. Additionally an important change in customer behavior such as an increase in volume of transactions or the nature of transactions that are not well-known could require an EDD. Furthermore, any transaction that involves a country or region that is more susceptible to money-laundering and terrorism financing is likely to require an EDD.
EDD concentrates on the identification of beneficial owners and uncovering undiscovered risks, like the real beneficiaries of transactions or accounts. It also identifies unusual or suspicious patterns in transactional behaviour, and confirms the information through independent checks interviews, site visits and third-party verification. Additionally, a thorough examination of the reputation of local markets by examining media sources as well as existing AML policies are also part of the risk evaluation.
EDD is more than just a requirement for compliance It’s an essential part safeguarding the integrity of the global finance system. Implementing EDD procedures that work is not just a matter for compliance. It’s an investment his explanation of Board Software Pricing Breakdown into the safety and security of the global financial system.