Enhanced Due Diligence

Due diligence is a vital component of AML compliance, especially for businesses dealing with high-value transactions or customers who are at risk of money laundering or financial crime. It’s used to filter out the most risky customers and stop them from funding terrorist groups and other criminal organizations.

The EDD process is more extensive than regular due diligence and includes more checks. This involves collecting more identification documents, as well as conducting thorough checks on a customer’s whereabouts and sources of funds. Due diligence is often used for high-risk clients for instance, politically-exposed individuals (PEPs) as well as those living in high-risk countries, and companies or individuals who rely heavily on cash.

The more complicated the person, legal entity or transaction, the more thorough the EDD procedure should be. Regulators typically favor the risk-based approach that employs documented risk assessment procedures to determine the degree of scrutiny needed for each situation. The EDD process includes gathering more comprehensive data like information about the person’s suppliers and clients legal structures, corporate/legal entities, and legal structures. EDD processes are generally more time-consuming, expensive and require a higher level of documentation when compared to CDD procedures. This is why it’s crucial to use a reliable and reliable technology for identity verification like the one that is built into 1Kosmos BlockID to make this process easier for your business.

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