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What is Enhanced Due Diligence (EDD)?
What is Enhanced Due Diligence (EDD)?
Enhanced Due Diligence, or EDD, is the highest level of compliance — a vigilant, meticulous process that kicks into gear when the stakes are high. It’s the regulatory spotlight that shines brilliantly on entities with intricate structures, like trusts and labyrinthine companies. EDD demands nothing short of a full blown investigation to satisfy Anti-Money Laundering (AML) regulations.
Why is Enhanced Due Diligence Important?
Enhanced Due Diligence isn’t just important, it’s the guardian of the financial realm. In the world of compliance, it’s not an option, it’s a must-do — a legal obligation that keeps the Department of Internal Affairs (DIA) on its toes. Failing to comply with EDD can lead to public warnings or fines of epic proportions.
When is Enhanced Due Diligence needed?
Enhanced Due Diligence kicks in when the red flags of risk are raised. It’s the vigilant guardian that steps up when an entity being verified is deemed high-risk, ensuring no stone is left unturned.
What is the difference between Customer Due Diligence and Enhanced Due Diligence? (CDD vs EDD)
Think of Customer Due Diligence (CDD) as the initial handshake, while Enhanced Due Diligence (EDD) is the deep-dive investigation. EDD demands you go the extra mile, gathering an arsenal of information from the source of wealth to trust deeds and all their variations. It’s the heavyweight champion of diligence, making sure everything is aligned, while CDD is just the KYC check in comparison.
