trends of virtual data room solutions
For high-risk customers, the standard customer due diligence (CDD) process may not be sufficient. This is the reason why increased due diligence is necessary and involves deeper investigations to determine the possibility of money laundering and terror financing dangers. EDD research aids businesses in comply with regulations and protects their reputation.
Imagine that someone downloads your app to create an account that is brand new. They’ve cleared your identity verification checks, and the check of their financial history raises no suspicious flags. It’s good news that, but there could be negative news. This is because the customer might be part of criminal enterprises that are trying to conceal money from illicit activities like corruption, drug trafficking, or terrorist activity. This is the reason it’s important for banks to carry out additional, risk-based due diligence on both existing and new customers.
EDD is required in a variety of cases for businesses that are involved in high risk sectors, high risk countries or any other industry that requires special scrutiny. EDD searches can include a search on sanctions lists and criminal watchlists to ensure that the firm does not do business with companies or individuals restricted by regulatory authorities.
A typical EDD investigation will contain information such as a detailed background profile of the person being investigated, the source and destination of the funds as well as other indicators of financial crime such as the presence of financial criminals, PEPs or adverse media. It may also contain detailed information on the beneficial ownership structure of a client as well as the identification of individuals who control or own the legal entity, as well as the source of the money and wealth.
