Customer Due Diligence
Based on Chapter II of the EU Directive 2015/849
“Member States shall prohibit their credit institutions and financial institutions from keeping anonymous accounts or anonymous passbooks. Member States shall, in any event, require that (…) passbooks be subject to CDD measures as soon as possible and in any event(...)”.
What do Customer Due Diligence measures consist of ?
- identification and verification of the customer (and the representative of the customer, if any) through his ID, passport or other reliable documentation.
- identification and verification of the beneficial owner of the customer, in order to be clear who has control of the entity.
- gathering of information regarding the nature of the business relationship.
- continuous monitoring of the transactions of the business relationship in order to reassure that the existing information is up-to-date.
The EU legal framework refers to two types of CDD: the Standard CDD and the Enhanced CDD.
The new Directive 2018/843, has made it clear that Enhanced CDD is required regarding transactions involving high-risk countries. The business relationship should be continually monitored for trigger events which may imply special requirements for further CDD investigation in the future.
Aside from the elevated risk of financial system abuse by criminals, non-compliance with CDD is a danger that is to be taken seriously by financial institutions considering the large administrative and criminal sanctions and measures in force. Be sure that your business is compliant with its CDD obligations whenever it is involved in a transaction or business relationship that requires so.
Contact Pideeco professionals for ongoing assistance and efficient execution of CDD investigations.
Contact the Compliance Team !How can Pideeco help you with Customer Due Diligence?
Our decade-long expertise in the world of compliance and finance can help your company to:- Navigate the EU regulatory landscape concerning CDD and EDD.
- Analyze your current CDD and EDD processes to determine any gaps and create and action plan to mitigate said gaps.
- Draft or improve your CDD and EDD policies and procedures.
- Identify and verify customers and beneficial owners on your behalf.
- Carry out ongoing due diligence of clients on your behalf.
- Embed sign-off within the institution of the EDD process of its most risky customers and create awareness with management.
- Train staff members on CDD and EDD processes.
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