11 Dec what is Customer Due Diligence?
Customer Due Diligence or CDD, as it is also known as, is the process and procedures companies follow to gather sufficient information on a new customer or existing customer and to assess the risks of doing business with them whether it is at the start of the relationship or once established.
Why do we carry out the Customer Due Diligence?
CDD is carried out to protect the Financial Institution entering the new relationship being used directly or indirectly for money laundering and Terrorist Financing purposes. It is also set out in local law following the Recommendations of the Financial Action task Force that Customer Due Diligence measures should be undertaken when:
- Establishing business relations;
- Carrying out occasional transactions: These might involve amounts of money over a certain threshold or entities in high-risk foreign countries.
- There is a suspicion of money laundering or terrorist financing; or
- The financial institution has doubts about the veracity or adequacy of previously obtained customer identification data.