Enhanced due diligence is a crucial element of AML compliance for businesses that handle high-value transactions or customers who are susceptible to laundering money and demystifying complex transactions with VDR’s organized layout other financial crime. It is used to identify the most prone customers and deter them from funding terrorist organizations and other criminal organizations.
The EDD process is more comprehensive than regular due diligence and involves an array of checks. This involves collecting more identification documents and performing thorough checks on a customer’s location and source of funds. This kind of due diligence is typically utilized for high-risk clients such as politically exposed individuals (PEPs) individuals who are located in high-risk areas as well as businesses or individuals that rely on cash.
The EDD procedure should be more thorough the more complicated a person, legal entity or transaction is. Regulators usually prefer a risk-based method that uses documented risk assessment procedures to determine the degree of scrutiny required for each case. The EDD procedure also involves gathering more complete information, which includes details on the person’s customers suppliers, corporate/legal structures, and their clients. EDD procedures are more costly and time-consuming, and require more detailed documentation than CDD procedures. This is why it’s crucial to have a solid and effective identity verification technology such as the one built into 1Kosmos BlockID to make this process less complicated for your business.