Enhanced Due Diligence (EDD) is used to review what type of customers?

Enhanced Due Diligence (EDD) is used to review what type of customers?

• A. Low-risk customers
• B. High-risk customers identified by the Bank
• C. All customers
• D. Domestic customers only

Answer: (B)

Enhanced Due Diligence targets customers who pose higher money-laundering or terrorist-financing risk. Banks apply EDD when risk assessments flag a customer as high risk—such as individuals with Politically Exposed Person status, non-residents, complex ownership structures, cross-border activity, or unusual transaction patterns. It involves deeper identity checks, more extensive sourcing of funds verification, and ongoing, intensified monitoring and documentation beyond standard due diligence. Low-risk customers receive standard checks, applying EDD to all customers would be inefficient, and limiting it to domestic clients would miss high-risk international scenarios.

Enhanced Due Diligence targets customers who pose higher money-laundering or terrorist-financing risk. Banks apply EDD when risk assessments flag a customer as high risk—such as individuals with Politically Exposed Person status, non-residents, complex ownership structures, cross-border activity, or unusual transaction patterns. It involves deeper identity checks, more extensive sourcing of funds verification, and ongoing, intensified monitoring and documentation beyond standard due diligence. Low-risk customers receive standard checks, applying EDD to all customers would be inefficient, and limiting it to domestic clients would miss high-risk international scenarios.