What is Enhanced Due Diligence？
Synonyms
| Category | English | Chinese | Notes |
|---|---|---|---|
| Formal Term | Enhanced Due Diligence | 加强尽调 | FATF / AMLD |
| Regulatory Term | High-Risk CDD | 高风险客户尽调 | EU AMLD |
| China Region | RTP Adjustment | 强化尽调 | Banking Terminology |
| HK/Macau | RTP Adjustment | 加强审查 | Financial Regulatory Circle |
Definition
EDD (Enhanced Due Diligence) is a deep investigation, continuous monitoring, and behavioral auditing mechanism implemented on top of basic CDD (Customer Due Diligence). It specifically targets customers or transaction entities identified as having a high risk of money laundering, fraud, or corruption.
Its Core Essence:
To isolate "individuals who may compromise the platform's compliance and security" from the standard customer workflow and place them under independent supervision.
Technical / Compliance Mechanism Explanation
EDD typically consists of the following five dimensions:
| Dimensions | Audit Content |
|---|---|
| Identity Level | Multi-national ID verification, Ultimate Beneficial Owner (UBO) transparency |
| Financial Level | SOF (Source of Funds) / SOW (Source of Wealth) legitimacy review |
| Behavioral Level | Betting patterns / Fund flow models |
| Association Level | IP / Device / Wallet / Third-party account linking |
| Continuous Level | Ongoing Monitoring of transactions |
At the system level, EDD is jointly executed by:
-
AML Risk Engine
-
Rule Engine
-
TM (Transaction Monitoring) Module
联合执行。
Platform Application Scenarios
| Trigger Condition | Execution Content |
|---|---|
| PEP (Politically Exposed Person) Match | Automatically enters EDD process |
| Large-Sum Deposits/Withdrawals | Triggers SOF / SOW verification |
| Bonus Abuse | Intensified review of the financial chain |
| Abnormal Profit Curve | Account freezing + manual review |
Risk / Compliance Points
-
FATF Mandatory Requirement: Failure to execute EDD can lead directly to license revocation.
-
Non-compliance can result in criminal prosecution or fines up to tens of millions.
-
违规最高可判刑或千万级罚款
Common Misconceptions
| Misconception | Correct Understanding |
|---|---|
| Only banks require EDD. | False. It is equally mandatory for the iGaming/gambling industry. |
| Providing an ID card is enough. | False. The source of funds must be fully traced. |