Glossary
AML, CDD and EDD: definitions
Three related but distinct terms, often used together loosely. Here's what each one specifically means.
Definition
AML, CDD, EDD - in one line each - AML is the regulatory framework. CDD is the standard-level check it requires. EDD is the deeper version of that check applied to higher-risk customers or relationships.
AML - Anti-Money Laundering
The overall regulatory framework requiring obliged entities - banks, payment institutions, e-money issuers, crypto asset service providers, and others - to prevent their services being used to launder the proceeds of crime or finance terrorism. AML law is where the obligation to identify beneficial owners actually comes from; see beneficial ownership compliance.
CDD - Customer Due Diligence
The standard-level identity and ownership checks AML rules require before or during a business relationship: confirming who a customer is, and for a corporate customer, identifying its beneficial owners - see UBO verification. CDD is the baseline every customer gets, not an enhanced or optional step.
EDD - Enhanced Due Diligence
A deeper level of CDD applied specifically to higher-risk customers or relationships - closer scrutiny of ownership structure, source of funds, and typically ongoing monitoring rather than a one-off check. What triggers EDD varies by jurisdiction and sector, but commonly includes politically exposed persons, customers from higher-risk jurisdictions, or unusually complex ownership structures that CDD alone doesn't adequately clarify.
Where ongoing monitoring fits
Both CDD and EDD are increasingly understood as ongoing obligations, not one-time gates - a customer approved under CDD or EDD at onboarding can still change in ways that matter later. See continuous due diligence for how that expectation plays out in practice.
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