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Enhanced Due Diligence (EDD): Compliance Guide

Blog post from Didit

Aggregate trend data notice

Excluded from normalized aggregate trends after staff review: 3056 posts were attributed to March 2026; 671 shared March 14, 2026. The preceding six-month median was 13.5 posts.

Review evidence: 3,056 posts in March 2026; 671 shared March 14, 2026; preceding six-month median 13.5. Reviewed August 9, 2026.

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Post Details
Company
Date Published
Author
Didit
Word Count
2,796
Company Posts That Month
121
Language
English
Hacker News Points
-
Post removed?
No
Summary

Enhanced Due Diligence (EDD) is a risk-based extension of standard customer due diligence used in anti-money-laundering compliance when a customer relationship or transaction presents heightened risk that normal controls cannot adequately manage. It requires organizations to complete baseline identification, beneficial ownership, purpose, risk assessment, and screening work before gathering additional evidence or imposing enhanced approvals, restrictions, and monitoring tailored to specific concerns such as complex ownership, politically exposed persons, geography, unusual transactions, or unclear sources of funds or wealth. International FATF standards and EU rules require proportionate measures, with particular obligations for PEPs and other legally specified scenarios, while local laws and sector rules determine the exact operational requirements. The guidance distinguishes source of funds, meaning the origin and path of assets used in a particular transaction, from source of wealth, meaning how a person accumulated their overall assets, and emphasizes checking the origin, ownership, movement, purpose, and consistency of evidence. EDD does not itself indicate criminality or replace separate suspicion-reporting decisions; instead, it should produce an auditable decision, clear ownership, and an ongoing monitoring plan that responds to future changes and events.

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