As the world continues to become increasingly riskier, anti-money washing (AML) and also other compliance steps need to develop as well. Enhanced due diligence (EDD) is usually an advanced amount of KYC that dives better into assessing high-risk consumers, transactions and business connections. It goes beyond the standard name verification and risk examination steps of Customer Due Diligence (CDD), to include extra checks, strict monitoring operations and more.

Unlike CDD, which can be typically accomplished prior to outset a business marriage and can often be computerized, EDD is definitely triggered by specific people, businesses, industries or countries that present a greater risk of money washing or other sorts of fraud. During EDD, the info collected is somewhat more in-depth and may include screening to get financial criminal risks like sanctions lists, adverse marketing reports and more.

If you should Use Enhanced Due Diligence

When CDD is a critical AML requirement for almost all companies, it can be difficult to determine red flags pertaining to high-risk people and businesses. That’s how come optimizing deal timelines with real-time VDR collaborations EDD is used to screen for additional complex risk indicators, including PEPs and their close contacts and family members. It’s also used to conduct detailed research into people or entities who may have a history of economic crime, such as criminal activity, tax forestalling, corruption and terrorism.

Is considered also used to review the organization background of any business, such as details of the management staff and supreme beneficial owners (UBOs), and reviewing company documents pertaining to red flags. When you need to perform EDD, it’s imperative that you understand the risks and how to do it proper.