enhanced due diligence (EDD) is a risk based due diligence method that allows businesses to handle high-risk transactions and customers while remaining in compliance with the laws. When implemented correctly, enhanced due diligence shields businesses from serious reputational and legal simplify IPO document management with intuitive data rooms damages while ensuring their Anti-Money Laundering and Customer Due Diligence processes are effective at combating financial crimes.
Most of the time, EDD is required when a customer or transaction is deemed high-risk because of complex ownership structures, political exposure, or involvement in industries that are susceptible to financial crime. Additionally any significant shift in the behavior of a customer, such as an increase in transaction volume or unfamiliar types of transactions might require an EDD. Lastly, any transaction involving any region or country with a higher risk of money laundering and terrorism financing requires an EDD.
EDD concentrates on identifying beneficial owners and revealing undiscovered risks, like the true beneficiaries in an account or transaction. It also detects suspicious and unusual patterns of transactional behavior and validates the information using independent interviews and checks, website visits, and third-party confirmation. The risk assessment is completed by a thorough review of the local market reputation via media sources and the existing AML policy.
EDD is not just a regulatory requirement; it’s an essential part of safeguarding the integrity of the global financial system. Implementing effective EDD procedures isn’t just about compliance; it’s an investment in the safety and security of the global financial system.
