{"id":34258,"date":"2025-12-24T10:16:21","date_gmt":"2025-12-24T09:16:21","guid":{"rendered":"https:\/\/figsflow.com\/uk\/?p=34258"},"modified":"2026-01-23T07:01:28","modified_gmt":"2026-01-23T06:01:28","slug":"what-is-enhanced-due-diligence","status":"publish","type":"post","link":"https:\/\/figsflow.com\/uk\/what-is-enhanced-due-diligence\/","title":{"rendered":"What Is Enhanced Due Diligence? Difference Between EDD, CDD &amp; SDD"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"34258\" class=\"elementor elementor-34258\" data-elementor-settings=\"{&quot;element_pack_global_tooltip_width&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]},&quot;element_pack_global_tooltip_width_tablet&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]},&quot;element_pack_global_tooltip_width_mobile&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]},&quot;element_pack_global_tooltip_padding&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;top&quot;:&quot;&quot;,&quot;right&quot;:&quot;&quot;,&quot;bottom&quot;:&quot;&quot;,&quot;left&quot;:&quot;&quot;,&quot;isLinked&quot;:true},&quot;element_pack_global_tooltip_padding_tablet&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;top&quot;:&quot;&quot;,&quot;right&quot;:&quot;&quot;,&quot;bottom&quot;:&quot;&quot;,&quot;left&quot;:&quot;&quot;,&quot;isLinked&quot;:true},&quot;element_pack_global_tooltip_padding_mobile&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;top&quot;:&quot;&quot;,&quot;right&quot;:&quot;&quot;,&quot;bottom&quot;:&quot;&quot;,&quot;left&quot;:&quot;&quot;,&quot;isLinked&quot;:true},&quot;element_pack_global_tooltip_border_radius&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;top&quot;:&quot;&quot;,&quot;right&quot;:&quot;&quot;,&quot;bottom&quot;:&quot;&quot;,&quot;left&quot;:&quot;&quot;,&quot;isLinked&quot;:true},&quot;element_pack_global_tooltip_border_radius_tablet&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;top&quot;:&quot;&quot;,&quot;right&quot;:&quot;&quot;,&quot;bottom&quot;:&quot;&quot;,&quot;left&quot;:&quot;&quot;,&quot;isLinked&quot;:true},&quot;element_pack_global_tooltip_border_radius_mobile&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;top&quot;:&quot;&quot;,&quot;right&quot;:&quot;&quot;,&quot;bottom&quot;:&quot;&quot;,&quot;left&quot;:&quot;&quot;,&quot;isLinked&quot;:true}}\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-b296e9a e-flex e-con-boxed e-con e-parent\" data-id=\"b296e9a\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4063c11 elementor-widget elementor-widget-text-editor\" data-id=\"4063c11\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong>Do you know when to apply standard checks versus enhanced scrutiny for your clients? Could you confidently explain to HMRC why you chose one level of due diligence over another?<\/strong><\/p><p>A single &#8220;No&#8221; to any of these questions could create serious problems and leave your firm exposed to money laundering risks, regulatory penalties, and even criminal prosecution in severe cases. But subject every client to enhanced checks, and you&#8217;re wasting resources, slowing onboarding, and frustrating legitimate customers with unnecessary bureaucracy.<\/p><p>This guide helps you understand what level of due diligence is required for each of your clients and gives you the practical knowledge to apply simplified, standard, and enhanced due diligence appropriately.<\/p><p>Sounds good! Let&#8217;s dive in.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ad18276 elementor-widget__width-initial elementor-widget elementor-widget-heading\" data-id=\"ad18276\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h6 class=\"elementor-heading-title elementor-size-default\">KEY TAKEAWAYS<\/h6>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-e1902c9 elementor-widget elementor-widget-text-editor\" data-id=\"e1902c9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Three distinct levels exist under MLR 2017: Simplified Due Diligence for low-risk clients, Customer Due Diligence as the standard baseline, and Enhanced Due Diligence for high-risk situations<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">Standard customer due diligence is your default position unless specific conditions trigger simplified or enhanced measures<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">You cannot simply decide a client is low-risk for simplified due diligence\u2014they must meet specific criteria in MLR 2017 Regulation 37<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"auto\">Seven situations require enhanced measures,\u00a0whether you think the risk is manageable\u00a0or not<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"5\" data-aria-level=\"1\"><span data-contrast=\"auto\">Your\u00a0initial\u00a0risk assessment before controls are applied dictates requirements, not the residual risk after your procedures<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"6\" data-aria-level=\"1\"><span data-contrast=\"auto\">You must record why you applied\u00a0to\u00a0each level and what specific measures you took<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"7\" data-aria-level=\"1\"><span data-contrast=\"auto\">Choosing the wrong level typically also breaches risk assessment, policies and procedures, and training requirements<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8c5a4d1 elementor-widget__width-initial elementor-absolute elementor-widget elementor-widget-spacer\" data-id=\"8c5a4d1\" data-element_type=\"widget\" data-e-type=\"widget\" data-settings=\"{&quot;_position&quot;:&quot;absolute&quot;}\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-12d668f e-flex e-con-boxed e-con e-parent\" data-id=\"12d668f\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-8c957c2 elementor-widget elementor-widget-heading\" data-id=\"8c957c2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">What is Customer Due Diligence (CDD)? <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0a76dfe elementor-widget elementor-widget-text-editor\" data-id=\"0a76dfe\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"text-align: center;\">Customer Due Diligence represents the standard baseline of checks that UK accounting firms, bookkeepers, and tax advisers must conduct for most clients under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0ceabee elementor-widget elementor-widget-text-editor\" data-id=\"0ceabee\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span data-contrast=\"auto\">CDD forms the foundation of your AML compliance framework. It ensures you:<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"4\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">know\u00a0who your client is,\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"4\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">understand what they\u00a0do, and\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"4\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">can spot when their activity\u00a0doesn&#8217;t\u00a0match their profile<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/li><\/ul><p><span data-contrast=\"auto\">For regulated sectors like accountancy services, tax advice, and bookkeeping, CDD\u00a0isn&#8217;t\u00a0optional discretion but a legal requirement before\u00a0establishing\u00a0any business\u00a0relationship.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p><p><span data-contrast=\"auto\">The process involves four core elements.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"5\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">First, you\u00a0identify\u00a0your customer by obtaining their name, address, and date of birth<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"5\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">Second, you\u00a0<\/span><a href=\"https:\/\/figsflow.com\/uk\/step-by-step-guide-to-verify-client-identity-in-aml\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">verify this identity<\/span><\/a><span data-contrast=\"auto\">\u00a0through reliable, independent sources such as passports, driving licences, or electronic verification services\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"5\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">Third, you assess and understand the purpose and intended nature of the business relationship by understanding what services they need and why\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"5\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"auto\">Fourth, you conduct ongoing monitoring throughout the relationship to ensure transactions\u00a0remain\u00a0consistent with what you know about the client<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/li><\/ul><p><span data-contrast=\"auto\">CDD applies to\u00a0the vast majority of\u00a0your clients. Unless they meet the specific low-risk criteria for simplified due diligence or trigger one of the seven high-risk factors requiring enhanced due diligence, standard CDD is what you must perform. This makes CDD your default position, the measures you apply when no\u00a0special circumstances\u00a0push you toward simpler or more rigorous checks.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5bf864a elementor-widget elementor-widget-heading\" data-id=\"5bf864a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">What is Simplified Due Diligence (SDD)? <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-48e0a1d elementor-widget elementor-widget-text-editor\" data-id=\"48e0a1d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"text-align: center;\">Simplified Due Diligence allows you to apply reduced measures for clients who present lower money laundering and terrorist financing risks. The emphasis here is on regulatory permission, not firm discretion. You cannot simply decide that a client seems low-risk and apply lighter checks. They must meet specific criteria set out in Regulation 37 of MLR 2017.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-22b08f2 elementor-widget elementor-widget-text-editor\" data-id=\"22b08f2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>SDD recognises that certain customers, products, and transactions carry inherently lower risks due to their nature, transparency, or existing regulatory oversight. Rather than requiring firms to conduct full CDD on demonstrably low-risk relationships, the regulations permit streamlined verification and monitoring where appropriate.<\/p><p>The regulations specify particular categories of clients who meet the criteria.<\/p><p>Credit or financial institutions authorised in the UK or EEA states qualify because they&#8217;re already subject to rigorous AML supervision<\/p><p>Companies whose securities are listed on regulated markets meet the requirements due to transparency and disclosure requirements<\/p><p>UK public authorities and certain pension schemes fall within scope, as do regulated persons supervised for compliance with money laundering regulations<\/p><p>When simplified measures apply, you have flexibility in how you conduct due diligence. You may verify identity and ownership through fewer documents or sources. You might reduce the frequency or intensity of ongoing monitoring. You could delay verification until after establishing the relationship in specific low-risk circumstances.<\/p><p>The key principle is that you&#8217;re taking a lighter touch because the regulatory framework judges these situations as presenting minimal risk.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2a625d7 elementor-widget elementor-widget-heading\" data-id=\"2a625d7\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">What is Enhanced Due Diligence (EDD)? <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-505b6d6 elementor-widget elementor-widget-text-editor\" data-id=\"505b6d6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"text-align: center;\">Enhanced Due Diligence represents the most rigorous level of client scrutiny, applied when higher money laundering or terrorist financing risks are present. Where CDD provides a baseline, and SDD offers a lighter touch for low-risk cases, EDD demands significantly deeper investigation into your client&#8217;s background, funding sources, and transaction purposes.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-b5743e5 elementor-widget elementor-widget-text-editor\" data-id=\"b5743e5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Simply put, what is Enhanced Due Diligence? It\u2019s a rigorous process that firms apply when higher risks are identified in a client relationship.<\/p><p><a href=\"https:\/\/figsflow.com\/uk\/enhanced-due-diligence-edd-explained\/\" target=\"_blank\" rel=\"noopener\">\u00a0EDD<\/a> isn&#8217;t about doing &#8220;a bit more&#8221; than standard checks. It&#8217;s a qualitatively different process requiring additional measures specifically designed to mitigate elevated risks. You must go beyond accepting information at face value to actively verify details from multiple independent sources, understand complex ownership structures, and scrutinise transaction patterns with heightened attention.\u00a0<\/p><p>The distinction centres on depth and intensity. While standard due diligence might accept a bank statement showing available funds, enhanced measures require you to trace where those funds originated. Where CDD confirms a\u00a0company&#8217;s\u00a0registered address, EDD investigates the entire corporate structure,\u00a0including ultimate beneficial owners across multiple\u00a0jurisdictions. Standard monitoring reviews transactions periodically; enhanced monitoring examines them continuously with lower thresholds for investigation.\u00a0<\/p><p>Two categories of EDD measures exist under MLR 2017:\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-421c839 e-con-full e-flex e-con e-child\" data-id=\"421c839\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;gradient&quot;}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-86c5aa3 elementor-widget__width-initial ui-e-icon-left ui-e-left elementor-align-left elementor-widget elementor-widget-uicore-icon-list\" data-id=\"86c5aa3\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"uicore-icon-list.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t        <ul>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Flexible Measures                        <\/p>\n                        <p class=\"ui-e-text\"> It gives you discretion to choose appropriate additional steps from a non-exhaustive list, such as seeking extra verification from independent sources, obtaining a deeper understanding of the client's background and ownership, or increasing monitoring frequency and intensity.   <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Prescribed Measures                        <\/p>\n                        <p class=\"ui-e-text\"> Prescribed measures are mandatory requirements you must complete for specific high-risk scenarios, particularly clients in high-risk third countries and politically exposed persons.   <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                    <\/ul>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-b614941 e-flex e-con-boxed e-con e-parent\" data-id=\"b614941\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-a13515c elementor-widget elementor-widget-image\" data-id=\"a13515c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"1000\" height=\"550\" src=\"https:\/\/figsflow.com\/uk\/wp-content\/uploads\/2025\/12\/What-is-enhanced-due-diligence.png\" class=\"attachment-large size-large wp-image-34749\" alt=\"A high-level flowchart showing the step-by-step transition from standard Customer Due Diligence (CDD) to EDD.\" srcset=\"https:\/\/figsflow.com\/uk\/wp-content\/uploads\/2025\/12\/What-is-enhanced-due-diligence.png 1000w, https:\/\/figsflow.com\/uk\/wp-content\/uploads\/2025\/12\/What-is-enhanced-due-diligence-300x165.png 300w, https:\/\/figsflow.com\/uk\/wp-content\/uploads\/2025\/12\/What-is-enhanced-due-diligence-768x422.png 768w, https:\/\/figsflow.com\/uk\/wp-content\/uploads\/2025\/12\/What-is-enhanced-due-diligence-650x358.png 650w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5637419 elementor-widget elementor-widget-text-editor\" data-id=\"5637419\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The trigger for moving from standard to enhanced due diligence is initial risk, not residual risk. If a client meets one of the seven EDD triggers under Regulation 33, you must apply enhanced measures regardless of whether you believe your general procedures adequately manage the risk.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f27df96 elementor-widget elementor-widget-heading\" data-id=\"f27df96\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Key 2026 EDD Triggers: Crypto, UBOs, and High-Risk Jurisdictions<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2e32d25 elementor-widget elementor-widget-text-editor\" data-id=\"2e32d25\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"204\" data-end=\"545\">To understand what is Enhanced Due Diligence, consider how regulators are focusing on key areas like crypto transactions and UBO transparency in 2026.<\/p><p data-start=\"204\" data-end=\"545\">To meet Anti-Money Laundering (AML) compliance in 2026, strict adherence to Enhanced Due Diligence (EDD) is essential. Regulators are tightening loopholes, focusing on three key areas: virtual assets, Ultimate Beneficial Ownership (UBO) transparency, and high-risk jurisdictions flagged by bodies like the Financial Action Task Force (FATF).<\/p><p data-start=\"547\" data-end=\"883\"><strong data-start=\"547\" data-end=\"600\">Crypto &amp; Virtual Asset Service Providers (VASPs):<\/strong><br data-start=\"600\" data-end=\"603\" \/>By 2026, the FATF\u2019s &#8220;Travel Rule&#8221; is fully in force. Any transaction involving VASPs, mixers, or large unhosted wallet transfers triggers mandatory EDD. Financial institutions must verify the source of crypto funds (SoF) and the origin of wealth (SoW) for these high-risk clients.<\/p><p data-start=\"885\" data-end=\"1145\"><strong data-start=\"885\" data-end=\"906\">UBO Transparency:<\/strong><br data-start=\"906\" data-end=\"909\" \/>Identifying the true owner behind corporate structures is vital. Shell companies and complex ownership chains are immediate red flags. In 2026, firms must cross-check UBO details with global registries, moving beyond self-certification.<\/p><p data-start=\"1147\" data-end=\"1388\"><strong data-start=\"1147\" data-end=\"1180\">FATF High-Risk Jurisdictions:<\/strong><br data-start=\"1180\" data-end=\"1183\" \/>Transactions linked to FATF-listed high-risk countries (e.g., North Korea, Iran) require automatic EDD. Even indirect links to these nations face heightened scrutiny and may result in blocked transactions.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-49ea329 elementor-widget elementor-widget-image\" data-id=\"49ea329\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"1000\" height=\"550\" src=\"https:\/\/figsflow.com\/uk\/wp-content\/uploads\/2025\/12\/Key-2026-EDD-Triggers-Crypto-UBOs-and-High-Risk-Jurisdictions\u200b.png\" class=\"attachment-large size-large wp-image-34750\" alt=\"\" srcset=\"https:\/\/figsflow.com\/uk\/wp-content\/uploads\/2025\/12\/Key-2026-EDD-Triggers-Crypto-UBOs-and-High-Risk-Jurisdictions\u200b.png 1000w, https:\/\/figsflow.com\/uk\/wp-content\/uploads\/2025\/12\/Key-2026-EDD-Triggers-Crypto-UBOs-and-High-Risk-Jurisdictions\u200b-300x165.png 300w, https:\/\/figsflow.com\/uk\/wp-content\/uploads\/2025\/12\/Key-2026-EDD-Triggers-Crypto-UBOs-and-High-Risk-Jurisdictions\u200b-768x422.png 768w, https:\/\/figsflow.com\/uk\/wp-content\/uploads\/2025\/12\/Key-2026-EDD-Triggers-Crypto-UBOs-and-High-Risk-Jurisdictions\u200b-650x358.png 650w\" sizes=\"(max-width: 1000px) 100vw, 1000px\">\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-e0b6eeb elementor-widget elementor-widget-heading\" data-id=\"e0b6eeb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Why is Enhanced Due Diligence Crucial for High-Risk Clients?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-33d7ebb elementor-widget elementor-widget-text-editor\" data-id=\"33d7ebb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p data-start=\"147\" data-end=\"337\">So, <strong data-start=\"1582\" data-end=\"1616\">what is Enhanced Due Diligence<\/strong>? It\u2019s an essential tool for managing high-risk clients and transactions to ensure compliance with ever-evolving regulations.<\/p><p data-start=\"147\" data-end=\"337\">In the UK, Enhanced Due Diligence (EDD) is a legal requirement under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs) for high-risk situations.<\/p><p data-start=\"339\" data-end=\"434\">As of early 2026, EDD is even more crucial for high-risk clients for the following reasons:<\/p><h4 data-start=\"436\" data-end=\"487\">1. Compliance with 2026 Regulatory Updates<\/h4><ul data-start=\"491\" data-end=\"763\"><li data-start=\"491\" data-end=\"637\"><p data-start=\"493\" data-end=\"637\">Narrowed Triggers: EDD is mandatory for clients or transactions linked to countries on the FATF blacklist (e.g., North Korea, Iran).<\/p><\/li><li data-start=\"641\" data-end=\"763\"><p data-start=\"643\" data-end=\"763\">Proportionality: EDD now applies to transactions that are &#8220;unusually complex or large&#8221; within a specific sector.<\/p><\/li><\/ul><h4 data-start=\"765\" data-end=\"810\">2. Identifying &#8220;Layering&#8221; Techniques<\/h4><ul><li data-start=\"841\" data-end=\"911\">Source of Wealth (SoW): Verifying the origin of a client\u2019s wealth.<\/li><li data-start=\"841\" data-end=\"911\">Source of Funds (SoF): Tracing where the money for transactions came from.<\/li><li data-start=\"841\" data-end=\"911\">Ultimate Beneficial Ownership (UBO): Identifying who controls corporate entities or trusts.<\/li><\/ul><h4 data-start=\"1102\" data-end=\"1148\">3. Mitigating Corruption Risks (PEPs)<\/h4><ul data-start=\"1152\" data-end=\"1314\"><li data-start=\"1152\" data-end=\"1218\"><p data-start=\"1154\" data-end=\"1218\">PEPs and their close associates are automatically high-risk.<\/p><\/li><li data-start=\"1222\" data-end=\"1314\"><p data-start=\"1224\" data-end=\"1314\">EDD requires senior management approval before continuing relationships with PEPs.<\/p><\/li><\/ul><h4 data-start=\"1316\" data-end=\"1353\">4. Avoiding Severe Penalties<\/h4><ul data-start=\"1357\" data-end=\"1514\"><li data-start=\"1357\" data-end=\"1514\"><p data-start=\"1359\" data-end=\"1514\">Failing to apply EDD can lead to hefty fines, licence revocation, and even prison sentences, especially under the scrutiny of the FCA and HMRC.<\/p><\/li><\/ul><h4 data-start=\"1516\" data-end=\"1560\">5. Protecting Banking Relationships<\/h4><ul data-start=\"1564\" data-end=\"1724\"><li data-start=\"1564\" data-end=\"1724\"><p data-start=\"1566\" data-end=\"1724\">In high-risk sectors (e.g., cryptocurrency, gambling), maintaining strong EDD procedures is crucial to avoid preemptive account closures by banks.<\/p><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2929599 elementor-widget elementor-widget-heading\" data-id=\"2929599\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">When to Apply CDD, SDD or EDD <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4e83c56 elementor-widget elementor-widget-text-editor\" data-id=\"4e83c56\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"text-align: center;\">Determining which level of due diligence to apply requires a systematic risk assessment before you establish the business relationship. You can start with the presumption of standard CDD for all clients. Move to simplified due diligence when the client meets specific criteria in Regulation 37 (UK or EEA regulated financial institution, company listed on a regulated market, UK public authority or another explicitly qualifying category).<\/p>\n<p style=\"text-align: center;\">Escalate to enhanced due diligence when any of the seven mandatory triggers apply, including clients in high-risk third countries, politically exposed persons, complex ownership structures, or unusually large transactions.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5a56a92 elementor-widget elementor-widget-text-editor\" data-id=\"5a56a92\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>A common question firms ask is, what is Enhanced Due Diligence, and when should it be applied to clients?<\/p><p>The decision to apply CDD, SDD or EDD follows clear regulatory triggers and risk indicators.\u00a0<\/p><p>Most of your client relationships will fall into standard CDD territory, particularly straightforward accountancy services, bookkeeping for established businesses, or tax advice for individuals with transparent UK income sources. This\u00a0remains\u00a0your default position unless specific conditions push you toward simplified or enhanced measures.\u00a0<\/p><p>For simplified due diligence, the client must meet the regulatory\u00a0criteria,\u00a0and you must have no suspicions of money laundering or terrorist financing. If they\u00a0don&#8217;t\u00a0meet the specific categories in Regulation 37, simplified\u00a0due diligence is not available regardless of how\u00a0low-risk\u00a0the client appears.\u00a0<\/p><p>For enhanced due diligence, the seven mandatory triggers are:\u00a0\u00a0<\/p><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\">The\u00a0customer\u00a0is\u00a0established\u00a0in\u00a0a\u00a0high-risk\u00a0third\u00a0country\u00a0on\u00a0the\u00a0FATF\u00a0lists\u00a0\u00a0<\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"2\" data-aria-level=\"1\">The customer\u00a0is a\u00a0<a href=\"https:\/\/figsflow.com\/uk\/why-pep-screening-matters-for-accountants-bookkeepers\/\" target=\"_blank\" rel=\"noopener\">politically exposed person<\/a>, family member,\u00a0or known close associate of a PEP\u00a0\u00a0<\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"3\" data-aria-level=\"1\">The situation\u00a0involves risks you\u00a0identified\u00a0in your\u00a0firm&#8217;s\u00a0business-wide risk\u00a0assessment\u00a0\u00a0<\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"4\" data-aria-level=\"1\">Your\u00a0sector\u00a0guidance\u00a0identifies\u00a0the\u00a0scenario\u00a0as\u00a0high-risk\u00a0\u00a0<\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"5\" data-aria-level=\"1\">The\u00a0customer\u00a0provided\u00a0false\u00a0or\u00a0stolen identification,\u00a0but\u00a0you&#8217;re\u00a0continuing\u00a0the relationship\u00a0\u00a0<\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"6\" data-aria-level=\"1\">The transaction is complex, unusually large, follows unusual patterns, or has no\u00a0apparent\u00a0economic or legal purpose\u00a0\u00a0<\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"7\" data-aria-level=\"1\">Any other situation that,\u00a0by its nature,\u00a0presents\u00a0a\u00a0higher money laundering or\u00a0terrorist financing risk\u00a0<\/li><\/ul><p>The presence of even one trigger makes EDD mandatory. You cannot argue that your standard procedures adequately manage the risk. The regulations require enhanced measures based on\u00a0initial\u00a0risk factors, not your confidence in existing controls.\u00a0<\/p><p>This risk-based approach demands documentation. You must record why you applied\u00a0to\u00a0each level, what specific factors influenced your decision, and what measures you completed as a result. HMRC expects to see a clear audit trail showing your risk assessment led logically to your chosen due diligence level.\u00a0\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-31a1740 elementor-widget elementor-widget-heading\" data-id=\"31a1740\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">The Impact of AI and Automation on Modern EDD(2026)<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-72d60e8 elementor-widget elementor-widget-text-editor\" data-id=\"72d60e8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div data-sfc-cp=\"\" data-hveid=\"CAEIAxAA\" data-complete=\"true\" data-processed=\"true\">\n\nIn modern compliance systems, <strong data-start=\"1949\" data-end=\"1983\">what is Enhanced Due Diligence<\/strong>? It includes leveraging AI tools to analyze complex data more effectively.\n\n<\/div>\n<div class=\"Y3BBE\" data-sfc-cp=\"\" data-hveid=\"CAEIAxAA\" data-complete=\"true\" data-processed=\"true\">In 2026, manual reviews are obsolete for high-risk profiles. Artificial intelligence (AI) and automation are essential for scalable, accurate, and defensible EDD processes. These technologies drastically reduce human error and provide real-time insights that traditional methods simply miss.<\/div>\n<ul class=\"KsbFXc U6u95\" data-processed=\"true\" data-complete=\"true\">\n \t<li data-hveid=\"CAEIBBAA\" data-complete=\"true\" data-sae=\"\"><span class=\"T286Pc\" data-sfc-cp=\"\" data-complete=\"true\"><strong class=\"Yjhzub\" data-complete=\"true\">AI-Powered Adverse Media Screening:<\/strong>\u00a0Instead of analysts manually sifting through thousands of articles, AI tools perform real-time sentiment analysis and natural language processing (NLP). They filter noise and immediately flag relevant sanctions, criminal history, or political exposure (PEPs), making the screening faster and more efficient .<\/span><\/li>\n \t<li data-hveid=\"CAEIBBAA\" data-complete=\"true\" data-sae=\"\"><span class=\"T286Pc\" data-sfc-cp=\"\" data-complete=\"true\">\u00a0<\/span><\/li>\n \t<li data-hveid=\"CAEIBBAB\" data-complete=\"true\" data-sae=\"\"><span class=\"T286Pc\" data-sfc-cp=\"\" data-complete=\"true\"><strong class=\"Yjhzub\" data-complete=\"true\">Transaction Monitoring (TM):<\/strong>\u00a0Machine learning models in 2026 TM systems don&#8217;t just look for simple thresholds; they learn a customer&#8217;s normal behaviour baseline. Anomalies that suggest money laundering &#8220;layering&#8221; or terrorist financing are identified instantly, drastically reducing false positives compared to legacy systems.<\/span><\/li>\n \t<li data-hveid=\"CAEIBBAB\" data-complete=\"true\" data-sae=\"\"><span class=\"T286Pc\" data-sfc-cp=\"\" data-complete=\"true\">\u00a0<\/span><\/li>\n \t<li data-hveid=\"CAEIBBAC\" data-complete=\"true\" data-sae=\"\"><span class=\"T286Pc\" data-sfc-cp=\"\" data-complete=\"true\"><strong class=\"Yjhzub\" data-complete=\"true\">Graph Analytics:<\/strong>\u00a0Visualizing complex ownership data has been revolutionized. Graph analytics software maps tangled networks of companies, individuals, and transactions in seconds, exposing hidden connections and potential control points that would take a human analyst weeks to uncover.<\/span><\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-56071b1 elementor-widget elementor-widget-heading\" data-id=\"56071b1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Difference Between SDD, CDD &amp; EDD <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-b4cb1e2 elementor-widget elementor-widget-text-editor\" data-id=\"b4cb1e2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Understanding the distinctions between simplified, standard, and enhanced due diligence requires examining how they differ across multiple dimensions. This comparison shows when and how to apply each level effectively.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-a3ee0c2 bdt-hide-entries-on-mobile-yes elementor-widget elementor-widget-bdt-table\" data-id=\"a3ee0c2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"bdt-table.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"bdt-table bdt-overflow-auto \" id=\"bdt-table-a3ee0c2\">\n\n\n\t\t\t<table>\n  <thead>\n    <tr>\n      <th>Feature<\/th>\n      <th>Simplified Due Diligence (SDD)<\/th>\n      <th>Customer Due Diligence (CDD)<\/th>\n      <th>Enhanced Due Diligence (EDD)<\/th>\n    <\/tr>\n  <\/thead>\n  <tbody>\n    <tr>\n      <td>Risk Level<\/td>\n      <td>Low risk with regulatory qualification<\/td>\n      <td>Standard risk profile<\/td>\n      <td>High risk with specific triggers<\/td>\n    <\/tr>\n    <tr>\n      <td>Application<\/td>\n      <td>Specific qualifying categories only (Reg 37)<\/td>\n      <td>Default for most clients<\/td>\n      <td>Seven mandatory trigger scenarios (Reg 33)<\/td>\n    <\/tr>\n    <tr>\n      <td>Identity Verification<\/td>\n      <td>Reduced documentation from fewer sources<\/td>\n      <td>Standard government ID and supporting documents<\/td>\n      <td>Multiple independent sources and cross-verification<\/td>\n    <\/tr>\n    <tr>\n      <td>Customer Information<\/td>\n      <td>Basic identification details<\/td>\n      <td>Name, address, DOB, business purpose<\/td>\n      <td>Comprehensive background, ownership structure, source of wealth and funds<\/td>\n    <\/tr>\n    <tr>\n      <td>Beneficial Ownership<\/td>\n      <td>May be reduced or delayed<\/td>\n      <td>Standard identification required<\/td>\n      <td>Detailed investigation across jurisdictions<\/td>\n    <\/tr>\n    <tr>\n      <td>Purpose Understanding<\/td>\n      <td>General nature of the relationship<\/td>\n      <td>Clear understanding of intended services<\/td>\n      <td>Deep investigation of the transaction purpose and economic rationale<\/td>\n    <\/tr>\n    <tr>\n      <td>Monitoring Frequency<\/td>\n      <td>Reduced intensity and frequency<\/td>\n      <td>Regular periodic reviews<\/td>\n      <td>Continuous detailed monitoring with lower investigation thresholds<\/td>\n    <\/tr>\n    <tr>\n      <td>Senior Management<\/td>\n      <td>Not required<\/td>\n      <td>Not required for standard cases<\/td>\n      <td>Approval is mandatory for high-risk countries and PEPs<\/td>\n    <\/tr>\n    <tr>\n      <td>Documentation<\/td>\n      <td>Lighter record keeping<\/td>\n      <td>Standard records of checks performed<\/td>\n      <td>Comprehensive records proving each enhanced measure<\/td>\n    <\/tr>\n    <tr>\n      <td>Examples<\/td>\n      <td>UK-regulated bank, listed plc, public authority, regulated pension scheme<\/td>\n      <td>Local sole trader, established UK company, individual tax client<\/td>\n      <td>Client in Iran, MP or family member, \u00a3500k cash transaction, complex offshore structure<\/td>\n    <\/tr>\n    <tr>\n      <td>When Unavailable<\/td>\n      <td>If any suspicion exists, if unusual circumstances arise<\/td>\n      <td>If the client qualifies for SDD or triggers EDD<\/td>\n      <td>Not applicable (EDD is the maximum level)<\/td>\n    <\/tr>\n  <\/tbody>\n<\/table>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-e020e88 e-flex e-con-boxed e-con e-parent\" data-id=\"e020e88\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-f8fa397 elementor-widget elementor-widget-text-editor\" data-id=\"f8fa397\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The table demonstrates progression from reduced scrutiny through baseline measures to heightened investigation. Each level serves a distinct regulatory purpose within the risk-based framework.<\/p><p>Moving between levels isn&#8217;t unusual during client relationships. You might begin with standard CDD, then escalate to EDD when the client enters a transaction that triggers enhanced requirements. Conversely, a client who initially required EDD due to PEP status might no longer need enhanced monitoring after they leave public office and sufficient time has passed, though you must carefully document this decision.<\/p><p>The key is matching your approach to the actual risks present. Applying SDD to a high-risk client creates serious compliance gaps and exposure. Subjecting every client to EDD wastes resources and creates unnecessary friction. Getting the level right requires understanding these distinctions and applying them consistently across your practice.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1623fa1 elementor-widget elementor-widget-heading\" data-id=\"1623fa1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Key Components: What Each Level Involves <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cd1d504 elementor-widget elementor-widget-text-editor\" data-id=\"cd1d504\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Each due diligence level comprises specific measures designed to address the risks present in that category.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-132dd39 elementor-widget elementor-widget-heading\" data-id=\"132dd39\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Standard Due Diligence (CDD) Requirements <\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-a407ce8 elementor-widget elementor-widget-text-editor\" data-id=\"a407ce8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"text-align: center;\">Standard CDD forms your baseline compliance approach and includes four mandatory elements you must complete before establishing any business relationship: identity verification, risk assessment, understanding the business relationship purpose, and ongoing monitoring.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-62cda00 e-con-full e-flex e-con e-child\" data-id=\"62cda00\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;gradient&quot;}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-bf1b1d1 elementor-widget__width-initial ui-e-icon-left ui-e-left elementor-align-left elementor-widget elementor-widget-uicore-icon-list\" data-id=\"bf1b1d1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"uicore-icon-list.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t        <ul>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Identity Verification                        <\/p>\n                        <p class=\"ui-e-text\"> Obtain the customer's full name, residential address, and date of birth, then confirm this information through reliable, independent sources. For UK residents, this typically means examining a current passport or photocard driving licence, supplemented by a recent utility bill or bank statement confirming their address. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Risk Assessment                        <\/p>\n                        <p class=\"ui-e-text\"> Evaluate the money laundering and terrorist financing risks this specific client presents by considering their business activities, whether they operate in cash-intensive sectors, their geographic locations, the complexity of their ownership structure, and the services they're requesting. This assessment determines whether standard measures suffice or whether you need to escalate to enhanced procedures. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Understanding the Business Relationship Purpose                        <\/p>\n                        <p class=\"ui-e-text\"> Know what services the client needs and why they need them, including their business model, typical transaction volumes, and what they expect from your services. This context allows you to spot unusual activity later because you know what normal looks like for this client. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Ongoing Monitoring                        <\/p>\n                        <p class=\"ui-e-text\"> Ensure transactions are consistent with what you know about the client, their business, and their risk profile throughout the relationship. You must be alert to significant changes, unusual patterns, or activities that don't fit the client's profile, and investigate further when something doesn't look right. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-check\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M173.898 439.404l-166.4-166.4c-9.997-9.997-9.997-26.206 0-36.204l36.203-36.204c9.997-9.998 26.207-9.998 36.204 0L192 312.69 432.095 72.596c9.997-9.997 26.207-9.997 36.204 0l36.203 36.204c9.997 9.997 9.997 26.206 0 36.204l-294.4 294.401c-9.998 9.997-26.207 9.997-36.204-.001z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                    <\/ul>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-28908a2 e-flex e-con-boxed e-con e-parent\" data-id=\"28908a2\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-e1ed345 elementor-widget elementor-widget-heading\" data-id=\"e1ed345\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Simplified Due Diligence (SDD) Measures <\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f37125e elementor-widget elementor-widget-text-editor\" data-id=\"f37125e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"text-align: center;\">Simplified due diligence reduces the intensity of standard measures where clients meet specific low-risk qualifying criteria under Regulation 37. This includes flexibility in verification timing, reduced documentation requirements, and lighter ongoing monitoring.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-1a95d88 e-con-full e-flex e-con e-child\" data-id=\"1a95d88\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;gradient&quot;}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-49790cc elementor-widget__width-initial ui-e-icon-left ui-e-left elementor-align-left elementor-widget elementor-widget-uicore-icon-list\" data-id=\"49790cc\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"uicore-icon-list.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t        <ul>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Verification Timing                        <\/p>\n                        <p class=\"ui-e-text\"> Complete identity verification after establishing the relationship rather than before, provided the transaction risks are small and verification occurs as soon as reasonably practicable. This recognises that certain low-risk customers shouldn't face unnecessary delays for legitimate transactions <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Reduced Documentation                        <\/p>\n                        <p class=\"ui-e-text\"> Accept fewer identity documents or rely on the customer's existing verification by another regulated entity. If you're providing services to another UK accountancy firm, you might simply confirm their FCA or HMRC registration rather than requesting passports and utility bills. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Lighter Monitoring                        <\/p>\n                        <p class=\"ui-e-text\"> Conduct less frequent reviews of the relationship, such as annually rather than quarterly, or only when significant changes occur. The lower risk profile means intensive scrutiny isn't necessary to detect potential money laundering activity. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Critical Exclusions                        <\/p>\n                        <p class=\"ui-e-text\"> You cannot use SDD if you suspect money laundering or terrorist financing, regardless of whether the client technically qualifies. If unusual or suspicious circumstances arise during the relationship, you must immediately escalate to standard or enhanced measures.  <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-check\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M173.898 439.404l-166.4-166.4c-9.997-9.997-9.997-26.206 0-36.204l36.203-36.204c9.997-9.998 26.207-9.998 36.204 0L192 312.69 432.095 72.596c9.997-9.997 26.207-9.997 36.204 0l36.203 36.204c9.997 9.997 9.997 26.206 0 36.204l-294.4 294.401c-9.998 9.997-26.207 9.997-36.204-.001z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                    <\/ul>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-58bcf07 elementor-widget elementor-widget-text-editor\" data-id=\"58bcf07\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>SDD never means abandoning due diligence entirely. You must still identify the customer, understand the business relationship, and conduct sufficient monitoring to detect suspicious transactions.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-1e6ce7a e-flex e-con-boxed e-con e-parent\" data-id=\"1e6ce7a\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-800a33a elementor-widget elementor-widget-heading\" data-id=\"800a33a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Enhanced Due Diligence (EDD) Measures <\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1998e01 elementor-widget elementor-widget-text-editor\" data-id=\"1998e01\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"text-align: center;\">Enhanced due diligence demands significantly deeper investigation designed to mitigate specific high-risk factors that standard procedures cannot adequately address. This includes additional information gathering, source of wealth and funds verification, senior management approval, transaction purpose investigation, and enhanced monitoring.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-a7e1b22 e-con-full e-flex e-con e-child\" data-id=\"a7e1b22\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;gradient&quot;}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-3d16ece elementor-widget__width-initial ui-e-icon-left ui-e-left elementor-align-left elementor-widget elementor-widget-uicore-icon-list\" data-id=\"3d16ece\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"uicore-icon-list.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t        <ul>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Additional Information Gathering                        <\/p>\n                        <p class=\"ui-e-text\"> Investigate the customer's complete background beyond standard CDD. For individuals, this includes employment history, public profile, business interests, and connections to other entities or individuals. For companies, you must understand the full ownership structure, including beneficial owners across multiple layers and jurisdictions, verified through independent sources such as corporate registries, financial disclosures, or background checking services. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Source of Wealth &amp; Funds Verification                        <\/p>\n                        <p class=\"ui-e-text\"> Establish how the client accumulated their total assets over time (source of wealth) and where the specific money for this transaction comes from (source of funds). You need both pieces of information and must verify them through documentation such as tax returns, audited accounts, sale agreements, or inheritance records. This is mandatory for high-risk third countries and PEPs.  <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Senior Management Approval                        <\/p>\n                        <p class=\"ui-e-text\"> Obtain approval from someone with sufficient authority and risk understanding before establishing or continuing the business relationship. This is mandatory for high-risk third countries and PEPs. The approving manager must review the risk factors, understand the enhanced measures being applied, and make an informed decision rather than rubber-stamping every case. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Transaction Purpose Investigation                        <\/p>\n                        <p class=\"ui-e-text\"> Understand not just what service the client needs but why they need it, why now, and why from your firm. Accepting vague explanations like \"investment opportunity\" or \"privacy preference\" doesn't meet EDD requirements. You must establish legitimate business or personal reasons. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-check\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M173.898 439.404l-166.4-166.4c-9.997-9.997-9.997-26.206 0-36.204l36.203-36.204c9.997-9.998 26.207-9.998 36.204 0L192 312.69 432.095 72.596c9.997-9.997 26.207-9.997 36.204 0l36.203 36.204c9.997 9.997 9.997 26.206 0 36.204l-294.4 294.401c-9.998 9.997-26.207 9.997-36.204-.001z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Enhanced Monitoring                        <\/p>\n                        <p class=\"ui-e-text\"> Conduct continuous scrutiny with lower thresholds for investigation, examining transactions monthly or more frequently rather than quarterly. Unusual patterns that might not trigger investigation in standard CDD relationships require immediate inquiry under EDD, with intensity proportionate to the specific risks identified. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-check\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M173.898 439.404l-166.4-166.4c-9.997-9.997-9.997-26.206 0-36.204l36.203-36.204c9.997-9.998 26.207-9.998 36.204 0L192 312.69 432.095 72.596c9.997-9.997 26.207-9.997 36.204 0l36.203 36.204c9.997 9.997 9.997 26.206 0 36.204l-294.4 294.401c-9.998 9.997-26.207 9.997-36.204-.001z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                    <\/ul>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-9016864 e-flex e-con-boxed e-con e-parent\" data-id=\"9016864\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-0a2d6d1 elementor-widget elementor-widget-text-editor\" data-id=\"0a2d6d1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<style>\n    \/* General container styles *\/\n    .edd-risk-matrix-container {\n        margin: 30px auto;\n        width: 100%;\n        max-width: 800px;\n        background: linear-gradient(180deg, #ffffff, #f0f4f8);\n        border: 1px solid #cfd8e3;\n        border-radius: 12px;\n        padding: 10px; \/* Reduced padding for tighter layout *\/\n        box-shadow: 0 10px 25px rgba(0,0,0,0.08);\n        font-family: 'Georgia', 'Times New Roman', serif;\n        position: relative;\n    }\n\n    \/* Heading styling *\/\n    h3 {\n        text-align: center;\n        color: #102a43;\n        margin-top: 0;\n        font-size: 20px;\n    }\n\n    \/* SVG content styles *\/\n    svg {\n        width: 100%;\n        height: auto; \/* Ensure it scales properly *\/\n    }\n\n    \/* Text styling for risk labels *\/\n    text {\n        font-family: serif;\n    }\n\n    \/* Mobile-specific adjustments *\/\n    @media (max-width: 767px) {\n        \/* Adjust heading font size for smaller screens *\/\n        h3 {\n            font-size: 18px;\n        }\n\n        \/* Text styling for mobile responsiveness *\/\n        text {\n            font-size: 12px; \/* Slightly smaller text on mobile *\/\n        }\n\n        \/* Container padding adjustment *\/\n        .edd-risk-matrix-container {\n            padding: 5px; \/* Remove unnecessary padding *\/\n        }\n\n        \/* Explanation text at the bottom *\/\n        .explanation-text {\n            font-size: 12px; \/* Adjust font size for readability *\/\n        }\n    }\n<\/style>\n\n<!-- Container for the Risk Matrix -->\n<div class=\"edd-risk-matrix-container\">\n    <h3>Risk Monitoring: Static vs. Continuous (2026)<\/h3>\n\n    <!-- SVG content for the Risk Matrix -->\n    <svg viewBox=\"0 0 760 200\" xmlns=\"www.w3.org\" width=\"100%\" height=\"auto\">\n        \n        <!-- Legend\/Labels -->\n        <text x=\"50\" y=\"25\" font-size=\"12\" fill=\"#486581\">LOW RISK<\/text>\n        <text x=\"350\" y=\"25\" font-size=\"12\" fill=\"#486581\">MEDIUM RISK<\/text>\n        <text x=\"650\" y=\"25\" font-size=\"12\" fill=\"#e53e3e\" font-weight=\"bold\">HIGH RISK<\/text>\n        \n        <!-- Timeline Background (Light Gray) -->\n        <rect x=\"20\" y=\"40\" width=\"720\" height=\"60\" fill=\"#e2e8f0\" rx=\"5\" \/>\n\n        <!-- OLD WAY: Periodic Review (Static) -->\n        <text x=\"10\" y=\"135\" font-size=\"12\" fill=\"#627d98\" font-style=\"italic\">Manual\/Static (Old Way)<\/text>\n        <!-- Static review points (crosses) -->\n        <path d=\"M 50 70 L 70 50 M 50 50 L 70 70\" stroke=\"#a0aec0\" stroke-width=\"3\" \/>\n        <path d=\"M 350 70 L 370 50 M 350 50 L 370 70\" stroke=\"#a0aec0\" stroke-width=\"3\" \/>\n        <path d=\"M 650 70 L 670 50 M 650 50 L 670 70\" stroke=\"#a0aec0\" stroke-width=\"3\" \/>\n        <text x=\"450\" y=\"85\" font-size=\"10\" fill=\"#a0aec0\">Yearly Reviews<\/text>\n\n        <!-- NEW WAY: Continuous Monitoring (Dynamic) -->\n        <text x=\"10\" y=\"165\" font-size=\"12\" fill=\"#0094B0\" font-weight=\"bold\">Continuous Monitoring (2026)<\/text>\n        \n        <!-- Continuous monitoring line (dynamic changes) -->\n        <path d=\"M 20 170 C 150 160, 250 180, 360 170 C 450 160, 550 190, 740 170\" fill=\"none\" stroke=\"#0094B0\" stroke-width=\"3\" \/>\n        <circle cx=\"360\" cy=\"170\" r=\"4\" fill=\"#0094B0\" \/>\n        <text x=\"360\" y=\"190\" text-anchor=\"middle\" font-size=\"10\" fill=\"#0094B0\" font-weight=\"bold\">Risk Trigger Event<\/text>\n        \n        <!-- Legend\/Context Box -->\n        <rect x=\"580\" y=\"120\" width=\"160\" height=\"50\" fill=\"#0094B0\" stroke=\"#ffffff\" stroke-width=\"1\" rx=\"5\" \/>\n        <text x=\"660\" y=\"138\" text-anchor=\"middle\" font-size=\"10\" fill=\"#ffffff\" font-weight=\"bold\">Automated Escalation<\/text>\n        <text x=\"660\" y=\"155\" text-anchor=\"middle\" font-size=\"10\" fill=\"#ffffff\">Immediate EDD Review<\/text>\n        \n    <\/svg>\n    \n    <!-- Explanation Text Below the Diagram -->\n    <div style=\"margin-top: 15px; padding-top: 15px; border-top: 1px solid #cfd8e3; text-align: left; font-size: 13px; color: #486581; line-height: 1.6;\" class=\"explanation-text\">\n        This chart contrasts outdated static monitoring (manual yearly reviews) with the 2026 standard of <strong>continuous monitoring<\/strong>, where systems dynamically recalculate risk and trigger immediate <strong>Enhanced Due Diligence<\/strong> based on real-time events.\n    <\/div>\n<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d636b5a elementor-widget elementor-widget-heading\" data-id=\"d636b5a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Common Mistakes When Applying Due Diligence Levels <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5c6e223 elementor-widget elementor-widget-text-editor\" data-id=\"5c6e223\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW35202533 BCX8\" lang=\"EN-GB\" xml:lang=\"EN-GB\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW35202533 BCX8\">HMRC inspections and enforcement actions reveal patterns of failure that accounting firms should actively avoid when\u00a0<\/span><span class=\"NormalTextRun SCXW35202533 BCX8\">determining<\/span><span class=\"NormalTextRun SCXW35202533 BCX8\">\u00a0and implementing due diligence levels.<\/span><\/span><span class=\"EOP SCXW35202533 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-5891d60 e-con-full e-flex e-con e-child\" data-id=\"5891d60\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;gradient&quot;}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-b87be1c elementor-widget__width-initial ui-e-icon-left ui-e-left elementor-align-left elementor-widget elementor-widget-uicore-icon-list\" data-id=\"b87be1c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"uicore-icon-list.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t        <ul>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Applying SDD When CDD is Required                        <\/p>\n                        <p class=\"ui-e-text\"> Some firms treat simplified due diligence as available whenever they judge a client to be low-risk, without checking whether the client actually meets the qualifying criteria in Regulation 37. A long-standing client who seems trustworthy doesn't automatically qualify for reduced measures unless they're a regulated financial institution, listed company, or other specified category. Your subjective assessment of low risk doesn't create regulatory permission to apply SDD. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Missing EDD Triggers                        <\/p>\n                        <p class=\"ui-e-text\"> Firms don't understand the seven mandatory scenarios or fail to implement proper screening. A firm provided accountancy services to a client with beneficial owners in Iran without conducting enhanced measures because they thought \"high-risk countries\" meant active conflict zones. When clients self-declare they're not politically exposed persons without independent verification, actual PEPs slip through undetected.  <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Treating All Clients as High-Risk                        <\/p>\n                        <p class=\"ui-e-text\"> Some firms react to regulatory pressure by applying enhanced measures to every client regardless of actual risk factors. This wastes significant resources on unnecessary checks, slows legitimate client onboarding, frustrates low-risk customers with intrusive questioning, and often means truly high-risk clients don't receive the focused attention they need. The risk-based approach demands proportionality in both directions.  <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-right\" viewBox=\"0 0 320 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M285.476 272.971L91.132 467.314c-9.373 9.373-24.569 9.373-33.941 0l-22.667-22.667c-9.357-9.357-9.375-24.522-.04-33.901L188.505 256 34.484 101.255c-9.335-9.379-9.317-24.544.04-33.901l22.667-22.667c9.373-9.373 24.569-9.373 33.941 0L285.475 239.03c9.373 9.372 9.373 24.568.001 33.941z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Not Documenting Risk Assessment Decisions                        <\/p>\n                        <p class=\"ui-e-text\"> Without contemporaneous written records, you cannot prove you conducted a proper risk assessment and chose the appropriate due diligence level. HMRC expects to see clear documentation showing what risk factors you identified, why you concluded SDD, CDD, or EDD was appropriate, and what specific measures you applied. Memory and verbal explanations don't satisfy regulatory requirements. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-check\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M173.898 439.404l-166.4-166.4c-9.997-9.997-9.997-26.206 0-36.204l36.203-36.204c9.997-9.998 26.207-9.998 36.204 0L192 312.69 432.095 72.596c9.997-9.997 26.207-9.997 36.204 0l36.203 36.204c9.997 9.997 9.997 26.206 0 36.204l-294.4 294.401c-9.998 9.997-26.207 9.997-36.204-.001z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                            <li >\n\n                    <div class=\"ui-e-wrap\">\n                    \n                    \n                    <div class=\"ui-e-content\">\n                        <p class=\"ui-e-title\">\n                            Having Procedures But Not Following Them                        <\/p>\n                        <p class=\"ui-e-text\"> One firm had written EDD procedures requiring nominated officer approval for third-party payments, but HMRC found multiple cases where only standard CDD was conducted and none of the documented procedures were followed. Staff either didn't understand the procedures, didn't recognise when they applied, or chose to ignore them for convenience. <\/p>\n                    <\/div>\n\n                                            <div class=\"ui-e-icon\">\n                            <svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-check\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M173.898 439.404l-166.4-166.4c-9.997-9.997-9.997-26.206 0-36.204l36.203-36.204c9.997-9.998 26.207-9.998 36.204 0L192 312.69 432.095 72.596c9.997-9.997 26.207-9.997 36.204 0l36.203 36.204c9.997 9.997 9.997 26.206 0 36.204l-294.4 294.401c-9.998 9.997-26.207 9.997-36.204-.001z\"><\/path><\/svg>                        <\/div>\n                    \n                    <\/div>\n                <\/li>\n                    <\/ul>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-196efd3 e-flex e-con-boxed e-con e-parent\" data-id=\"196efd3\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-1bf57d0 elementor-widget elementor-widget-text-editor\" data-id=\"1bf57d0\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h2 aria-level=\"2\"><span data-ccp-props=\"{&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335559685&quot;:0,&quot;335559738&quot;:160,&quot;335559739&quot;:80}\"><span class=\"TextRun SCXW24267110 BCX8\" lang=\"EN-GB\" xml:lang=\"EN-GB\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW24267110 BCX8\" data-ccp-parastyle=\"heading 2\">Additional Resources<\/span><\/span><span class=\"EOP SCXW24267110 BCX8\" data-ccp-props=\"{&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335559738&quot;:160,&quot;335559739&quot;:80}\">\u00a0<\/span> <\/span><\/h2><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"14\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Discover the best AML software for accountants in 2025\/26:\u00a0<\/span><\/b><a href=\"https:\/\/figsflow.com\/uk\/best-aml-software-for-accountants-in-2025\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">Best AML Software 2025 | Leading AML Solutions for UK Firms | FigsFlow<\/span><\/a><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"14\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"2\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Most accountancy firms assume\u00a0they&#8217;re\u00a0compliant, but\u00a0scratch\u00a0beneath the surface and the picture changes.<\/span><\/b>\u00a0<strong>Here&#8217;s\u00a0your complete guide to compliance:<\/strong>\u00a0<a href=\"https:\/\/figsflow.com\/uk\/aml-compliance-financial-crime-prevention-a-guide-for-uk-accountants\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">Co<\/span><span data-contrast=\"none\">mplete Guide to AML Compliance\u00a0&amp; Financial Crime Prevention\u00a0|\u00a0FigsFlow<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/a><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"14\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"3\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Learn how\u00a0FigsFlow\u00a0is leading Digital ID Verification in 2025\/26:<\/span><\/b><span data-contrast=\"auto\">\u00a0<\/span><a href=\"https:\/\/figsflow.com\/uk\/future-of-digital-id-verification-in-aml\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">Future of Digital ID Verification in AML | FigsFlow<\/span><\/a><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"14\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"4\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">A simple explanation of AML for accountants:\u00a0<\/span><\/b><a href=\"https:\/\/figsflow.com\/uk\/aml-meaning-a-simple-explanation-for-accountants\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">AML Meaning: Explanation for Accountants| FigsFlow<\/span><\/a><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"14\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"5\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Financial Action Task Force High-Risk\u00a0Jurisdictions:<\/span><\/b><span data-contrast=\"auto\">\u00a0<a href=\"https:\/\/www.fatf-gafi.org\/en\/countries\/black-and-grey-lists.html\" target=\"_blank\" rel=\"noopener\">&#8220;<\/a><\/span><a href=\"https:\/\/www.fatf-gafi.org\/en\/countries\/black-and-grey-lists.html\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">Black and grey<\/span><span data-contrast=\"none\">&#8221;\u00a0lists<\/span><\/a><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul><ul><li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"14\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"6\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">HMRC Guidance:<\/span><\/b><span data-contrast=\"auto\">\u00a0<\/span><a href=\"https:\/\/www.gov.uk\/guidance\/money-laundering-regulations-your-responsibilities\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">Your responsibilities under money laundering supervision &#8211; GOV.UK<\/span><\/a><span data-ccp-props=\"{}\">\u00a0<\/span><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-b264353 elementor-widget elementor-widget-heading\" data-id=\"b264353\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Conclusion <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-169af8f elementor-widget elementor-widget-text-editor\" data-id=\"169af8f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The three-tier approach to due diligence reflects a fundamental regulatory principle: your compliance measures should be proportionate to actual risks. Getting this right protects your firm while allowing efficient service delivery.<\/p><p>Review your recent client intake against this guide. Identify whether you correctly applied SDD, CDD, or EDD in each case. Check your FATF lists are current and verify your procedures clearly specify when each level applies.<\/p><p>The difference between compliant firms and those facing penalties comes down to understanding these distinctions and implementing them consistently.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-be13990 elementor-cta--skin-classic elementor-animated-content elementor-bg-transform elementor-bg-transform-zoom-in elementor-widget elementor-widget-call-to-action\" data-id=\"be13990\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"call-to-action.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-cta\">\n\t\t\t\t\t\t\t<div class=\"elementor-cta__content\">\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t<h3 class=\"elementor-cta__title elementor-cta__content-item elementor-content-item\">\n\t\t\t\t\t\tStreamline Your AML Compliance with FigsFlow \t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-cta__description elementor-cta__content-item elementor-content-item\">\n\t\t\t\t\t\tAutomate risk assessments, client verification, and due diligence workflows in one platform. From CDD to EDD, FigsFlow handles the complexity so you can focus on your clients. \t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-cta__button-wrapper elementor-cta__content-item elementor-content-item \">\n\t\t\t\t\t<a class=\"elementor-cta__button elementor-button elementor-size-\" href=\"https:\/\/app.figsflow.com\/signup?utm_source=website\">\n\t\t\t\t\t\tStart Your Free Trial\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-e616aa5 elementor-widget elementor-widget-heading\" data-id=\"e616aa5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Frequently Asked Questions (FAQs) <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8ec8324 elementor-widget elementor-widget-bdt-accordion\" data-id=\"8ec8324\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"bdt-accordion.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"bdt-ep-accordion-container\">\n\t\t\t<div id=\"bdt-ep-accordion-8ec8324\" class=\"bdt-ep-accordion bdt-accordion\" data-bdt-accordion=\"{&quot;collapsible&quot;:true,&quot;multiple&quot;:false,&quot;transition&quot;:&quot;ease-in-out&quot;}\" \t\tdata-settings=\"{&quot;id&quot;:&quot;bdt-ep-accordion-8ec8324&quot;,&quot;activeHash&quot;:&quot;no&quot;,&quot;activeScrollspy&quot;:null,&quot;hashTopOffset&quot;:false,&quot;hashScrollspyTime&quot;:false,&quot;closeAllItemsOnMobile&quot;:false}\">\n\t\t\t\t\t\t\t\t\t<div class=\"bdt-ep-accordion-item\">\n\t\t\t\t\t\t<div\t\t\t\t\t\t\tclass=\"bdt-ep-accordion-title bdt-accordion-title bdt-flex bdt-flex-middle bdt-flex-between\" id=\"bdt-ep-accordion-what-are-sdd-cdd-and-edd\"\n\t\t\t\t\t\t\tdata-accordion-index=\"0\" data-title=\"what-are-sdd-cdd-and-edd\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon bdt-flex-align-right\"\n\t\t\t\t\t\t\t\t\taria-hidden=\"true\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-closed\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-opened\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<span role=\"heading\" class=\"bdt-ep-title-text bdt-flex-inline bdt-flex-middle\" >\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tWhat are SDD, CDD, and EDD?  \t\t\t\t\t\t\t<\/span>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"bdt-ep-accordion-content bdt-accordion-content\">\n\t\t\t\t\t\t\t<p>Simplified Due Diligence (SDD) applies reduced checks to low-risk clients who meet specific regulatory criteria. Customer Due Diligence (CDD) is the standard baseline for most clients. Enhanced Due Diligence (EDD) requires deeper investigation for high-risk situations like politically exposed persons or clients in high-risk countries.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<div class=\"bdt-ep-accordion-item\">\n\t\t\t\t\t\t<div\t\t\t\t\t\t\tclass=\"bdt-ep-accordion-title bdt-accordion-title bdt-flex bdt-flex-middle bdt-flex-between\" id=\"bdt-ep-accordion-what-is-cdd-in-the-kyc-process\"\n\t\t\t\t\t\t\tdata-accordion-index=\"1\" data-title=\"what-is-cdd-in-the-kyc-process\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon bdt-flex-align-right\"\n\t\t\t\t\t\t\t\t\taria-hidden=\"true\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-closed\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-opened\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<span role=\"heading\" class=\"bdt-ep-title-text bdt-flex-inline bdt-flex-middle\" >\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tWhat is CDD in the KYC process?  \t\t\t\t\t\t\t<\/span>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"bdt-ep-accordion-content bdt-accordion-content\">\n\t\t\t\t\t\t\t<p>Customer Due Diligence (CDD) is the process of verifying client identity, assessing money laundering risks, and understanding the business relationship purpose. It forms part of the Know Your Customer (KYC) requirements and helps prevent financial crime while protecting your firm from regulatory penalties.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<div class=\"bdt-ep-accordion-item\">\n\t\t\t\t\t\t<div\t\t\t\t\t\t\tclass=\"bdt-ep-accordion-title bdt-accordion-title bdt-flex bdt-flex-middle bdt-flex-between\" id=\"bdt-ep-accordion-what-do-cdd-and-edd-stand-for\"\n\t\t\t\t\t\t\tdata-accordion-index=\"2\" data-title=\"what-do-cdd-and-edd-stand-for\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon bdt-flex-align-right\"\n\t\t\t\t\t\t\t\t\taria-hidden=\"true\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-closed\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-opened\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<span role=\"heading\" class=\"bdt-ep-title-text bdt-flex-inline bdt-flex-middle\" >\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tWhat do CDD and EDD stand for?  \t\t\t\t\t\t\t<\/span>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"bdt-ep-accordion-content bdt-accordion-content\">\n\t\t\t\t\t\t\t<p>CDD stands for Customer Due Diligence, the standard level of client checks required under MLR 2017. EDD stands for Enhanced Due Diligence, a more rigorous investigation process applied when clients present higher money laundering or terrorist financing risks.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<div class=\"bdt-ep-accordion-item\">\n\t\t\t\t\t\t<div\t\t\t\t\t\t\tclass=\"bdt-ep-accordion-title bdt-accordion-title bdt-flex bdt-flex-middle bdt-flex-between\" id=\"bdt-ep-accordion-what-is-simplified-due-diligence\"\n\t\t\t\t\t\t\tdata-accordion-index=\"3\" data-title=\"what-is-simplified-due-diligence\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon bdt-flex-align-right\"\n\t\t\t\t\t\t\t\t\taria-hidden=\"true\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-closed\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-opened\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<span role=\"heading\" class=\"bdt-ep-title-text bdt-flex-inline bdt-flex-middle\" >\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tWhat is simplified due diligence?  \t\t\t\t\t\t\t<\/span>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"bdt-ep-accordion-content bdt-accordion-content\">\n\t\t\t\t\t\t\t<p>Simplified due diligence is the lowest level of client checks, applied only when customers meet specific low-risk criteria in Regulation 37. It allows reduced verification requirements and lighter monitoring for clients like UK-regulated financial institutions or companies listed on regulated markets.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<div class=\"bdt-ep-accordion-item\">\n\t\t\t\t\t\t<div\t\t\t\t\t\t\tclass=\"bdt-ep-accordion-title bdt-accordion-title bdt-flex bdt-flex-middle bdt-flex-between\" id=\"bdt-ep-accordion-are-cdd-and-edd-part-of-kyc\"\n\t\t\t\t\t\t\tdata-accordion-index=\"4\" data-title=\"are-cdd-and-edd-part-of-kyc\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon bdt-flex-align-right\"\n\t\t\t\t\t\t\t\t\taria-hidden=\"true\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-closed\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-opened\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<span role=\"heading\" class=\"bdt-ep-title-text bdt-flex-inline bdt-flex-middle\" >\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tAre CDD and EDD part of KYC?  \t\t\t\t\t\t\t<\/span>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"bdt-ep-accordion-content bdt-accordion-content\">\n\t\t\t\t\t\t\t<p>Yes, Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) are core components of Know Your Customer (KYC) processes. They work alongside identity verification and ongoing monitoring to ensure you understand your clients and comply with anti-money laundering regulations.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<div class=\"bdt-ep-accordion-item\">\n\t\t\t\t\t\t<div\t\t\t\t\t\t\tclass=\"bdt-ep-accordion-title bdt-accordion-title bdt-flex bdt-flex-middle bdt-flex-between\" id=\"bdt-ep-accordion-what-is-a-red-flag-during-due-diligence\"\n\t\t\t\t\t\t\tdata-accordion-index=\"5\" data-title=\"what-is-a-red-flag-during-due-diligence\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon bdt-flex-align-right\"\n\t\t\t\t\t\t\t\t\taria-hidden=\"true\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-closed\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"bdt-ep-accordion-icon-opened\">\n\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"fa-fw e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<span role=\"heading\" class=\"bdt-ep-title-text bdt-flex-inline bdt-flex-middle\" >\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tWhat is a red flag during due diligence?  \t\t\t\t\t\t\t<\/span>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"bdt-ep-accordion-content bdt-accordion-content\">\n\t\t\t\t\t\t\t<p>Red flags are warning signs that indicate potential money laundering or compliance risks, such as unusual transaction patterns, complex ownership structures with no clear purpose, clients providing false documents, or reluctance to provide source of funds information.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Do you know when to apply standard checks versus enhanced scrutiny for your clients? Could you confidently explain to HMRC why you [&hellip;]<\/p>\n","protected":false},"author":36,"featured_media":34350,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_tocer_settings":[],"footnotes":""},"categories":[67,6],"tags":[11],"class_list":["post-34258","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accountants","category-blog","tag-compliance"],"acf":[],"_links":{"self":[{"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/posts\/34258","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/comments?post=34258"}],"version-history":[{"count":59,"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/posts\/34258\/revisions"}],"predecessor-version":[{"id":35621,"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/posts\/34258\/revisions\/35621"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/media\/34350"}],"wp:attachment":[{"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/media?parent=34258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/categories?post=34258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/figsflow.com\/uk\/wp-json\/wp\/v2\/tags?post=34258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}