Enhance Due Diligence (EDD) is required when the customer and product/service combination is considered to have a higher risk profile. This higher level of due diligence is required in order to mitigate this increased risk.
A high-risk situation generally occurs where there is an increased opportunity for money laundering or terrorist financing through the service/product you are providing. EDD procedures depend on the nature and severity of the risk. Additional due diligence could include gathering additional information to verify the customer’s identity, their source of income, or an adverse media check. These checks should be proportionate to the level of risk identified and provide confidence that any identified risk has been mitigated and is unlikely to be realized.
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