- What are the three 3 components of KYC?
- What is the KYC process?
- What is the difference between KYC and CDD?
- What is CDD in banking?
- Why is EDD required?
- What documents do I need for EDD?
- What is CDD and EDD?
- What is EDD KYC?
- What is CDD in KYC?
- What are the 3 ways that money is laundered?
- How do you identify a beneficial owner?
- Who is at risk of money laundering?
- What is standard due diligence?
- What are the 3 stages of money laundering?
- What is the difference between customer due diligence and enhanced due diligence?
What are the three 3 components of KYC?
To create and run an effective KYC program requires the following elements: Customer Identification Program (CIP) How do you know someone is who they say they are.
Customer Due Diligence.
What is the KYC process?
KYC means Know Your Customer and sometimes Know Your Client. KYC or KYC check is the mandatory process of identifying and verifying the identity of the client when opening an account and periodically over time. In other words, banks must make sure that their clients are genuinely who they claim to be.
What is the difference between KYC and CDD?
What’s the difference between KYC and CDD? CDD (Customer Due Diligence) is the process of a business verifying the identity of its clients and assessing the potential risks to the business relationship. KYC is about demonstrating that you have done your CDD.
What is CDD in banking?
Assess the bank’s compliance with the regulatory requirements for customer due diligence (CDD). … The objective of CDD is to enable the bank to understand the nature and purpose of customer relationships, which may include understanding the types of transactions in which a customer is likely to engage.
Why is EDD required?
In the prevention of money laundering and terrorist financing, EDD has become the standard practice. EDD is required before any business relationship or deal can be reached between two parties. … For suspicion of money laundering or when there is a suspicious activity monitoring.
What documents do I need for EDD?
For regular employment, the documents must show your gross income, such as a W-2….Gather Your DocumentsFederal tax return (IRS Form 1040, Schedule C or F).State tax return (CA Form 540).W-2.Paycheck stubs.Payroll history.Bank receipts.Business records.Contracts.More items…
What is CDD and EDD?
The second step is Customer Due Diligence (“CDD”) which requires the bank to obtain information to verify the customer’s identity and assess the risk. … If the CDD inquiry leads to a high risk determination, the bank has to conduct an Enhanced Due Diligence (“EDD”).
What is EDD KYC?
Enhanced due diligence (EDD) is a KYC process that provides a greater level of scrutiny of potential business partnerships and highlights risk that cannot be detected by customer due diligence. EDD goes beyond CDD and looks to establish a higher level of identity assurance by obtaining the customer’s identity and …
What is CDD in KYC?
Customer Due Diligence (CDD) or Know Your Customer (KYC) policies are the cornerstones of an effective AML/CTF program. Put simply, they are the act of performing background checks on the customer to ensure that they are properly risk assessed before being onboarded.
What are the 3 ways that money is laundered?
The process of laundering money typically involves three steps: placement, layering, and integration. Placement puts the “dirty money” into the legitimate financial system.
How do you identify a beneficial owner?
The test to identify beneficial ownership You must determine who owns more than 25 percent of the customer and who has effective control of the customer, and also those persons on whose behalf a transaction is conducted.
Who is at risk of money laundering?
According to the announced data, criminals carry out 97% of money laundering activities through financial institutions. Considering that banks mediate millions of financial transactions during the day, banks are at great risk against financial crimes.
What is standard due diligence?
Standard due diligence requires you to identify your customer as well as verify their identity. … This due diligence should provide you with confidence that that you know who your customer is and that your service or product is not being used as a tool to launder money or any other criminal activity.
What are the 3 stages of money laundering?
There are usually two or three phases to the laundering: Placement. Layering. Integration / Extraction.
What is the difference between customer due diligence and enhanced due diligence?
What is the difference between CDD and EDD? The difference between Customer Due Diligence and Enhanced Due Diligence is that CDD is a less strict verification procedure where you obtain the customer’s identity, address and evaluate the risk category of the customer.