Question: What Is Ongoing Due Diligence?

What does due diligence mean?

reasonable care and cautionnoun Law, Business.

reasonable care and caution exercised by a person who is buying, selling, giving professional advice, etc., especially as required by law to protect against incurring liability: The court said there was due diligence on the part of the plaintiff..

What is a CDD check?

Customer Due Diligence (CDD) information comprises the facts about a customer that should enable an organisation to assess the extent to which the customer exposes it to a range of risks. These risks include money laundering and terrorist financing.

Why is CDD so important?

And why is it so important? CDD is a critical element of effectively managing risk and protecting you, and your business, against potential association or involvement with financial crimes and nefarious activities. … Customer risk assessments can be used to determine which level of due diligence is required.

What are the 3 stages of anti money laundering?

There are usually two or three phases to the laundering: Placement. Layering. Integration / Extraction.

What are the four pillars of compliance?

There are four pillars to an effective BSA/AML program: 1) development of internal policies, procedures, and related controls, 2) designation of a compliance officer, 3) a thorough and ongoing training program, and 4) independent review for compliance.

What is ongoing client due diligence?

Ongoing monitoring involves: Monitoring transactions throughout the course of a business relationship to ensure a client’s risk profile matches their behavior. Maintaining responsiveness to any changes in risk profile, or any factors which might raise suspicion.

What is meant by ongoing due diligence for transactions?

A second implication of the ongoing due diligence obligation is that financial institutions must keep up to date the data or information they hold pursuant to their obligation to identify and verify the identity and their obligation to identify the characteristics of the customer as well as the purpose and nature of …

What is the CDD rule?

Information on Complying with the Customer Due Diligence (CDD) Final Rule. The CDD Rule, which amends Bank Secrecy Act regulations, aims to improve financial transparency and prevent criminals and terrorists from misusing companies to disguise their illicit activities and launder their ill-gotten gains.

What are the levels of customer due diligence?

There are three levels of customer due diligence: standard, simplified and enhanced.

What is CDD and EDD?

The second step is Customer Due Diligence (“CDD”) which requires the bank to obtain information to verify the customer’s identity and assess the risk. … If the CDD inquiry leads to a high risk determination, the bank has to conduct an Enhanced Due Diligence (“EDD”).

What are the 4 pillars of AML?

For years, financial institutions have operated under the maxim that an effective anti-money laundering and Bank Secrecy Act compliance program (collectively “AML”) rests upon four pillars: (1) written policies and procedures; (2) a designated AML compliance officer; (3) independent testing of the institution’s AML …

What are the three 3 components of KYC?

To create and run an effective KYC program requires the following elements: Customer Identification Program (CIP) How do you know someone is who they say they are? … Customer Due Diligence. … Ongoing Monitoring.