Customer Due Diligence is an essential aspect of an AML compliance program. To manage your risks effectively and protect your business from potential involvement in financial, terroristic and other criminal activities or being associated with them. CDD process is a critical part of KYC checks
. For not having a reliable and compliant KYC, financial institutions are obliged to pay penalties and ICOs have to return all the received funds (like the cases with most Chinese ICOs
CDD differs a little on a global level , however 'reasonable steps' required by regulators, stay the same. It is a process of identifying each customer and understanding their activities. With information obtained during identification, you can form the risk profile for each client.
In Enhanced Due Diligence (EDD)
additional information is collected, but it is necessary only for high-risk customers. In order to determine what level of due diligence is required you can use customer risk assessments.
We have prepared a checklist to help you improve Customer Due Diligence procedures.