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.

ECDD measures

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.

Get more information

You must get more information from the customer or third party sources so you can do one or more of the following:

clarify or update customer or beneficial owner information
take reasonable measures to identify the customer’s and beneficial owners’ source of wealth and funds (‘reasonable’ means what is practical and necessary in line with your identified money laundering/terrorism financing risk)
clarify the nature of their ongoing business with you.

More detailed analysis of customer information

You may also need to undertake a more detailed analysis of the customer’s identification (KYC) information. This might include:

taking reasonable measures to conduct more analysis of the source of the customer’s and each beneficial owner’s wealth and funds (‘reasonable’ means what is practical and necessary in line with your identified money laundering/terrorism financing risk).

Verify or re-verify customer information

When verifying or re-verifying customer information, you must do so in accordance with Part B of your AML/CTF program, Customer identification.

If your customer is an individual, you must verify or re-verify their full name and either their date of birth or residential address so you are satisfied they are who they claim to be.
If your customer is a company, trust, association, partner or government body you must also verify or re-verify information.
Verify or re-verify the information using your company’s usual customer identification procedures.
Make sure those checks are based on reliable and independent documentation or electronic data.

More detailed analysis and monitoring of transactions

Get approval from senior management

The content on this website is general and is not legal advice. Before you make a decision or take a particular action based on the content on this website, you should check its accuracy, completeness, currency and relevance for your purposes. You may wish to seek independent professional advice.

Last updated: 19 Jul 2019

Page ID: 134

Enhanced customer due diligence (ECDD) program

When to apply your ECDD

ECDD measures

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