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Customer Due Diligence

Compliance Consultancy Financial Crime Customer Due Diligence
The Customer Due Diligence (hereafter “CDD”) investigation is required by EU jurisdictions for the prevention of the use of the EU financial system for the purposes of money laundering and terrorist financing.

Based on the 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 the 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 third 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.


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