CDD (Customer Due Diligence) is an essential aspect of an AML compliance program. To manage your risks effectively and protect your business from potential involvement in financial, terroristic and other criminal activities or being associated with them. We have prepared a checklist to help you improve Customer Due Diligence procedures.

Basic check

Perform CDD measures before entering into a business relationship with your client to detect any bad actors early on.

Background check

Ascertain the identity and location of the potential customer, and gain a good understanding of their business activities. This can be as simple as locating documentation that verifies the name and address of your customer.

Identity check

You have to first decide whether a client or customer fits your established risk profile, before entering into a business relationship with them. You can only do this by undertaking the appropriate CDD measures. This ensures that identity thefts and any potential forgeries can be detected early on.

Collect relevant data

You may rely on third parties – from banks, to lawyers, to auditors – to help you perform due diligence, however it’s important to choose these parties or providers wisely because the ultimate responsibility for CDD measures remain with you

Last resort

Sometimes, the only way to get the information required for CDD is through a trusted third-party so it’s important to ensure that their standards and best practices are aligned with your business.

Sort & document

When authenticating or verifying a potential customer, classify their risk category and define what type of customer they are, before storing this information and any additional documentation digitally.

Documentation is important

Having a meticulous and comprehensive process for documenting CDD-related information is not only highly effective, it also mitigates any potential risk for you as a business.

Perform periodic diligence assessments

Beyond basic CDD, it’s important that you carry out the correct processes to ascertain whether EDD is necessary. This can be an ongoing process, as customers have the potential to transition into higher risk categories over time so, conducting periodic due diligence assessments can be beneficial.

Security check

Performing customer due diligence is only a part of your responsibility. You must also make sure that every shred of data you collect from your clients is protected and secured.

Digital backup

Make sure all customer data you have is saved digitally and can be produced for proof if or when needed. Securing all CDD and EDD data is not only smart but a necessary regulation from any global regulator.

Do you like this checklist and want to see more? visit the Checklist everything. This website will give some sample checklists and checklists that you can have as samples to create your own list. Every checklist on this website is printable as PDF.

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