Customer Due Diligence (CDD) is a process that involves identifying potential customers, whether they are natural persons or legal entities, checking their authenticity and legitimacy and identifying the degree of Money Laundering (ML), Financing of Terrorism (FT), or Proliferation Financing (PF) risk each customer poses to the business.
Businesses must design an Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) and Targeted Financial Sanctions (TFS) framework, detailing how they intend to carry out their CDD obligations, that is, by having in place relevant policies, procedures, systems, and controls to undertake CDD measures. This also includes using reliable AML software and practical solutions that help make the process more consistent and easier to manage.
CDD is a key element of the AML/CFT framework; businesses must be aware of certain common challenges faced during the formulation and implementation of the CDD process.
Some of these challenges are elaborated on in the video, such as:
This video highlights and discusses various challenges in conducting Customer Due Diligence.