What does CDD stand for in AML programs?

What does CDD stand for in AML programs?

• A. Customer Due Diligence
• B. Cash Deposit Details
• C. Compliance Data Directive
• D. Customer Data Disclosure

Answer: (A)

CDD in AML programs stands for Customer Due Diligence. This is the process of identifying who the customer is, verifying their identity, understanding the purpose and nature of the relationship, and assessing the risk of money laundering or terrorist financing. It also includes ongoing monitoring of transactions and updating information as needed. The goal is to tailor controls to the customer’s risk profile and to detect unusual activity early, fitting within Know Your Customer practices and, for higher-risk scenarios, applying enhanced due diligence. The other terms don’t fit because they describe deposit details, a general compliance directive, or simply disclosing customer data, none of which align with the established AML concept of CDD.

CDD in AML programs stands for Customer Due Diligence. This is the process of identifying who the customer is, verifying their identity, understanding the purpose and nature of the relationship, and assessing the risk of money laundering or terrorist financing. It also includes ongoing monitoring of transactions and updating information as needed. The goal is to tailor controls to the customer’s risk profile and to detect unusual activity early, fitting within Know Your Customer practices and, for higher-risk scenarios, applying enhanced due diligence. The other terms don’t fit because they describe deposit details, a general compliance directive, or simply disclosing customer data, none of which align with the established AML concept of CDD.