Enhanced Due Diligence Guide

Understanding and implementing Enhanced Due Diligence procedures

When Enhanced Due Diligence is Required

High-Risk Factors

  • High-value transactions
  • High-risk jurisdictions
  • Politically exposed persons (PEPs)
  • Unusual transaction patterns

Verification Issues

  • Unverified addresses
  • Inconsistent information
  • Complex ownership structures
  • Unusual business activities

Enhanced Due Diligence Process

1

Additional Identity Verification

Obtain and verify additional identity documents:

  • Multiple forms of government-issued ID
  • Proof of address from multiple sources
  • Additional verification questions
  • Face-to-face verification (if possible)
2

Source of Funds

Verify the source and legitimacy of funds:

  • Bank statements and transaction history
  • Income verification documents
  • Business financial statements
  • Tax returns and declarations
3

Ongoing Monitoring

Implement enhanced monitoring measures:

  • Regular transaction reviews
  • Periodic document updates
  • Enhanced risk assessment
  • Senior management approval

Special Considerations

PEPs and Close Associates

  • Verify PEP status through reliable sources
  • Obtain senior management approval
  • Document the source of wealth
  • Monitor transactions more frequently

Documentation Requirements

  • Maintain detailed records of all checks
  • Document decision-making process
  • Keep evidence of approvals
  • Record ongoing monitoring activities

Additional Resources

FCA Risk-Based Approach GuidanceJMLSG Guidance