Enhanced Due Diligence (EDD)
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Enhanced Due Diligence (EDD)
EDD is a more detailed procedure that is applied to clients who present a higher risk, such as politically exposed persons (PEPs) or clients from countries with high levels of corruption. EDD involves more thorough checks:
- An in-depth examination of the client’s source of funds and wealth.
- Understanding the client’s business structure and transactions.
- Ongoing monitoring of the client’s financial activity.
As part of EDD, additional information about the purposes of transactions, about the ultimate beneficial owners, and about the nature of the client’s business relationships may also be required. These procedures help institutions better manage risks and protect against the misuse of their systems for financial crimes.