Enhanced Due Diligence Checklist
In brief: Enhanced due diligence is the extra evidence, approval, and monitoring a firm applies when the normal CDD file is not enough for the risk.
Key points
- EDD should be triggered by risk, not applied randomly.
- Common EDD steps include extra verification, source-of-funds checks, source-of-wealth context, and senior approval.
- The file should explain how the extra checks reduced or clarified the risk.
Enhanced due diligence checklist
Use enhanced due diligence when client, matter, geography, product, delivery channel, PEP, sanctions, adverse media, or transaction facts create higher risk.
| EDD step | Evidence to keep |
|---|---|
| Trigger note | Why standard CDD was not enough. |
| Extra verification | Additional ID, company, ownership, or control evidence. |
| Source of funds | Where the money for the matter or transaction came from. |
| Source of wealth | How the client built the wider wealth behind the funds. |
| Screening review | PEP, sanctions, adverse media, and false-positive notes. |
| Senior approval | Who approved onboarding or continuation. |
| Monitoring plan | What changes should trigger another review. |
What EDD is not
EDD is not a longer form for every client. It is a targeted response to higher risk. If the extra evidence does not make the position understandable, escalation or refusal may be the right answer.
This guide is general information, not legal advice. Check MLR 2017 Regulation 28, GOV.UK's money laundering supervision responsibilities, HMRC's CDD testing guidance, and your supervisor's current sector guidance before making a compliance decision.