Enhanced Due Diligence (EDD)
An expanded check applied to higher-risk clients and transactions: PEP status, sanctions sensitivity, complex structures, unusual transactions. The term comes from banking compliance, where EDD is a mandatory step following standard KYC verification.
Practical significance
For the client, EDD means more questions from the bank or counterparty: about the origin of funds, ownership structure, business history. Verifiable answers prepared in advance substantially speed up passage through such checks.
Where it is used
- onboarding of higher-risk banking clients
- work with PEPs and sanctions-sensitive sectors
- large international transfers and transactions
- compliance of regulated organizations
What the term does not mean
EDD does not imply suspicion of wrongdoing: it is a standard procedure for certain risk categories, required by regulation.
How it differs from «Investigative Due Diligence»
EDD is a regulatory procedure based on established risk criteria; investigative verification is analytical work carried out for a specific business decision. More about this term
Illustrative example
A bank requests confirmation of the source of funds from a client with a historical PEP status. A prepared exposure profile with supporting documents resolves the questions in a single round.
Related terms, services and guides
Definition verified 2 August 2026
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