3.2.1.3.4 EDD: Customer’s Business and the Business Relationship

Effective from 16/6/2021

As LFIs advance efforts to understand their customer's business and financial activities, they should consider whether aspects of the customer profile require EDD. The following are some situations in which EDD may be appropriate:

	•	The customer has business or other ties to high-risk jurisdictions (if the customer or its beneficial owners are based in a high-risk jurisdiction, EDD is mandatory).
	•	The customer intends to use high-risk financial products and services, such as bulk cash services or purchase and exchange of virtual assets.
	•	The LFI does not fully understand the customer's business model, or the customer has no clear business activities that would justify its expected to use of the account.

EDD on the business activities and account use of business like DPMS and real estate sector participants can involve the following:

	•	Requiring the customer to provide invoices documenting incoming and outgoing transfers;
	•	Inspecting payroll documents and other business records;
	•	Visiting the customer's business premises and interviewing its personnel;
	•	Requesting a reference from a current customer or other well-known firm with which the new customer claims to do business, or which operates in the same sector as the new customer.