Enhanced Due Diligence (EDD)
Extra scrutiny for higher-risk customers or large transactions.
Detailed Description
Enhanced Due Diligence (EDD)
What is the main purpose of Enhanced Due Diligence (EDD)?
The primary purpose of EDD is to provide a deeper understanding of the risks posed by a client or transaction, particularly in high-risk scenarios.
What are the key components of EDD?
Key components of EDD include in-depth risk assessment, source of funds verification, enhanced monitoring, additional documentation, and interviews/background checks.
When is EDD typically required?
EDD is required in situations with heightened risk, such as clients from high-risk jurisdictions or transactions involving politically exposed persons.
How does EDD differ from standard due diligence?
EDD involves a more comprehensive analysis and requires additional documentation and ongoing monitoring compared to standard due diligence.
What are some challenges of implementing EDD?
Challenges include resource intensity, complexity of information, balancing compliance with business needs, and keeping up with regulatory changes.