Customer Due Diligence

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customer due diligence, AML-CFT compliance, AML-CFT training, compliance program, due diligence, KYC, KYE

Customer Due Diligence (CDD) With the Help of Risk Insight Experts

Customer due diligence (CDD) is a very good way to prevent money laundering and other financial crimes such as illegal trading of gold and precious metals. The more companies know about their customers, the greater chance of preventing money laundering and financing of terrorism.

The heart of a strong AML-CFT compliance program is the development, adoption and deployment of comprehensive customer due diligence (CDD) policies, procedures and processes for all customers, especially those that may pose a higher risk for money laundering and terrorist financing.

At Risk Insight we are expert in conducting basic customer due diligence (CDD) and an enhanced due diligence (EDD) to protect their company from legal, financial, organization and reputation risks.

In some cases, enhanced due diligence (EDD) is required. CDD programs must have a procedure for differentiating customers and thus pick the right level of necessary due diligence.

The objective of due diligence should be to enable companies to fully understand their investors, customers and suppliers and predict possible variations from the normal way of conducting business.

Companies should undertake customer CDD measures when

  • Establishing a new line of business
  • Establishing business relationships with investors
  • Establishing business relationships with customers and suppliers
  • There is a suspicion of money laundering or terrorist financing
  • They have doubts about the real situation of their investors, clients, suppliers and employees

Companies should incorporate at least these measures into their customer due diligence (CDD) programs:

  1. Identifying the customer and verifying the investor’s, customer’s, supplier’s or employee’s identity using reliable documents and information sources for verification
  2. Identifying the identity of the beneficial owners of any company involved in the business transaction
  3. Conducting ongoing customer due diligence (ODD) on the business relationship with investors, customers and suppliers

There are circumstances where the risk of money laundering or terrorist financing is higher and enhanced customer due diligence (EDD) measures must be taken.

The risk factors where enhanced customer due diligence (EDD) measures have to be taken include the following:

  • Changes in operating processes in conducting business
  • Countries and geographic areas where there present high risks associated with organized crime and terrorism
  • Companies that have nominee shareholders or shares in bearer form
  • Unusual or excessively complex appearance of the ownership structure of the company, given the nature of the company’s business country or geographic risk factors
  • Countries subject to sanctions, embargoes or similar measures issued by, for example, the United Nations
  • Countries identified by credible sources as having significant levels of drug trafficking, corruption, financial crimes or other criminal activity
  • Countries or geographic areas identified as providing funding or support for terrorist activities
  • Countries that share a common border and are known to have physical cross-border transactional activity
  • Gold, diamond and other precious metals trading business
  • Real estate for investment business
  • Payment received from unassociated third parties

Any company needing to conduct basic CDD and enhanced EDD should seek the external assistance of Risk Insight experts.

Risk Insight experts can conduct basic customer due diligence (CDD) and an enhanced due diligence (EDD) to protect your company from legal, financial, organization and reputation risks.

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