What are the four core elements of CDD?
The CDD Rule includes four core elements of customer due diligence, each of which should be included in the anti-money-laundering (AML) program of a CFI: (1) customer identification and verification, (2) beneficial ownership identification and verification, (3) understanding the nature and purpose of customer …
What does CDD mean in compliance?
customer due diligence
In the world of Financial Crime Compliance (FCC), customer due diligence (CDD) is an important and complex field. Customer due diligence is the processes used by financial institutions to collect and evaluate relevant information about a customer or potential customer.
What is CDD in customer service?
Customer Due Diligence
What is Customer Due Diligence? Customer due diligence (CDD) is the act of performing background checks and other screening on the customer to ensure that they are properly risk-assessed before being onboarded.
Is CDD a regulatory requirement?
The implementation of risk-based CDD policies, procedures, and processes is not only a regulatory requirement, but also helps institutions avoid fines and penalties, financial loss, increased expenses, and other associated risks.
Who must be verified as part of CDD?
beneficial owners
The goal is to establish the beneficial owners of the company. These are the individuals that directly or indirectly own more than 25% of the company or otherwise exercise significant control over it. After the beneficial owners are identified, they must be verified.
What is difference between KYC and CDD?
The main difference between KYC and CDD is that apart from the emphasis on financing, CDD controls are carried out in a process, and communication with the customer continues. Customer Due Diligence is a form of “Know Your Customer” inventory. KYC assists the CDD in verifying the information provided by customers.
What is the purpose of CDD?
KYC or Customer Due Diligence (CDD) collates information about your customers to assess the extent of any risk they pose to the firm.
Who is a beneficial owner under CDD?
The CDD Rule requires these covered financial institutions to identify and verify the identity of the natural persons (known as beneficial owners) of legal entity customers who own, control, and profit from companies when those companies open accounts.
What is STR and CTR?
In paragraph 6 of our circular dated February 15, 2006, referred to above, banks were advised to initiate urgent steps to ensure electronic filing of cash transaction report (CTR) and Suspicious Transaction Reports (STR) to FIU-IND.
When should CDD be performed?
When is CDD Required? The application of Customer Due Diligence (CDD) is required when companies with AML processes enter a business relationship with a customer or a potential customer to assess their risk profile and verify their identity.