Customer due diligence ( CDD ) is a compilation of various requirements under the Bank Secrecy Act like know your customer processes , identification and verification of the identities of beneficial owners for certain legal entities , understanding the purpose of accounts , risk rating at account opening and periodically thereafter and transactional monitoring . 1 Customers posing an increased risk to the financial institution ( FI ) of financial crimes such as money laundering or terrorist financing should be subject to additional due diligence measures called enhanced due diligence ( EDD ). EDD measures can be customer-specific and bank-specific ; there are no “ one-size-fitsall ” EDD programs applicable to all FIs or customers .
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