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MSB Enhanced Due DiligenceBUSINESS INFORMATION Business Name: Account Number: Type of Account: Date of Application:RISK ASSESSMENT REVIEW LOW RISK ACTIVITY (check all the boxes that apply) Primarily

How to fill out enhanced due diligence procedures

How to fill out enhanced due diligence procedures

1. Gather all the necessary information about the client, including their identity, address, and contact details.
2. Conduct a risk assessment to determine the level of due diligence required. This may involve considering factors such as the client's country of residence, profession, and business activities.
3. Verify the client's identity using reliable and independent sources, such as government-issued identification documents or trusted databases.
4. Obtain additional documentation to support the client's identity, such as proof of address or business registration certificates.
5. Conduct background checks on the client to assess their reputation and potential involvement in money laundering or terrorist financing.
6. Continuously monitor the client's activities and update the due diligence information as required.
7. Document all the steps taken during the enhanced due diligence process for future reference and compliance purposes.

Who needs enhanced due diligence procedures?

1. Enhanced due diligence procedures are typically required for high-risk clients or those engaged in high-risk activities.
2. Financial institutions, such as banks, investment firms, and money service businesses, are often required to perform enhanced due diligence.
3. Other businesses or individuals involved in sensitive industries, such as casinos, real estate agencies, or art dealers, may also need to implement enhanced due diligence measures.
4. Regulatory bodies or authorities may specifically mandate enhanced due diligence for certain types of transactions or customers.

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What is enhanced due diligence procedures?

Enhanced due diligence (EDD) procedures are comprehensive and more detailed investigations and assessments conducted by financial institutions and other entities to mitigate risks associated with high-risk customers, transactions, or geographical areas. EDD is employed to gain a clearer understanding of the customer's background and to identify and manage potential risks more effectively.

Who is required to file enhanced due diligence procedures?

Financial institutions, including banks, investment firms, and insurance companies, are typically required to file enhanced due diligence procedures when dealing with high-risk customers, politically exposed persons (PEPs), and transactions that involve higher potential for money laundering or terrorist financing.

How to fill out enhanced due diligence procedures?

Filling out enhanced due diligence procedures involves gathering detailed information about the customer, such as their identity, source of funds, nature of business, and any relevant documentation that supports this information. Institutions should also assess the customer's risk profile and document the findings and measures implemented to mitigate identified risks.

What is the purpose of enhanced due diligence procedures?

The purpose of enhanced due diligence procedures is to ensure compliance with regulatory requirements, minimize the risk of financial crime, provide a thorough understanding of high-risk customers, and implement appropriate risk management strategies to protect the institution from potential liabilities.

What information must be reported on enhanced due diligence procedures?

Enhanced due diligence procedures must report information such as the customer's identity, ownership structure, source of funds or wealth, transaction patterns, and any significant adverse information concerning the customer. Institutions must document their findings and the rationale for their risk assessments.