Enhanced customer due diligence (ECDD) program
Part A of your Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) program must include an enhanced customer due diligence (ECDD) program that documents the actions you take when the money laundering or terrorism financing risk is high.
Enhanced customer due diligence involves making extra checks on a customer’s identification, collecting additional information and doing additional verification.
Carrying out ECDD allows you to decide whether a suspicious matter should be reported. ECDD plays an important role in detecting, disrupting and preventing money laundering and terrorism financing. It also protects your business or organisation from being exploited for criminal activity.
When to apply your ECDD
You must apply your ECDD in the following high-risk situations.
- When you determine through your risk-based systems and controls the money laundering/terrorism risk is high.
- The service you are asked to provide is for a customer who is (or has a beneficial owner who is) a foreign politically exposed person (PEP).
- A customer’s suspicious activity or behaviour may lead to you making a suspicious matter report (SMR).
- A transaction involves a person or a company that has a presence or is incorporated in a prescribed foreign country.
Your ECDD program must document the procedures you must use in high-risk situations. The measures you use must be appropriate to those situations, including a range of the measures outlined below.
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