CDD

Customer Due Diligence (CDD) is the set of BSA requirements for understanding and monitoring customers throughout the relationship. FinCEN’s CDD Rule has four core elements: identifying and verifying customers (CIP), identifying and verifying beneficial owners of legal-entity customers, understanding the nature and purpose of customer relationships to develop a risk profile, and conducting ongoing monitoring to maintain that profile and report suspicious activity.

CDD is risk-based. Enhanced Due Diligence (EDD) applies additional scrutiny — more documentation, senior approval, and closer monitoring — to higher-risk customers such as politically exposed persons or those with cross-border exposure.