Enhanced due diligence is customer due diligence with more depth. Schedule 2 of the AMLO requires it in named situations. For a customer who is not physically present, section 4 asks for at least one extra measure, such as further verification or a first payment from an account in the customer's name at a bank. For a foreign politically exposed person, section 10 requires senior management approval, reasonable measures to establish the source of wealth and the source of funds, and enhanced ongoing monitoring. Section 15 covers any other high-risk situation identified by the firm's own risk assessment.
The regulators' guidelines add detail. The HKMA guideline treats domestic and international organisation PEPs on a risk-sensitive basis after the 2023 amendment of the ordinance, and lists the measures a bank may take: more information on the customer and the beneficial owners, more on the purpose of the relationship, closer monitoring of transactions, and approval at a higher level.
Why it matters
EDD is where files fail inspection. A high-risk customer whose source of wealth is not evidenced, or whose ownership chain stops at a holding company, is a finding in a regulator's review.
How Fill Easy relates to it
The deeper the check, the more documents it needs. CorpVerify adds past filings, charges, UBO tracing through every layer and credit reports to a standard order, and GovVerify can add court, credit and sanctions checks to an identity request where the scheme and jurisdiction support them.