We understand that the use of the term Enhanced CDD for two different sets of requirements can cause confusion.
Enhanced CDD wire transfer provisions apply to transfers of funds by electronic means (as set out in sections 22(3) and 26-27 of the AML/CFT Act).
The Enhanced CDD requirements to identify and verify the source of the funds or the wealth of the customer are wider. These requirements apply to certain high-risk customers, certain transactions and activities, or politically exposed persons (as set out in other parts of section 22 and sections 23-26 of the AML/CFT Act). In these circumstances, a reporting entity is required to examine the legitimacy (or potential illegitimacy) of the source of the customer’s wealth or funds. In many situations, this may extend far beyond the originator of any particular wire transfer.
The Enhanced CDD requirements to identify and verify the source of the funds or the wealth of the customer are wider. These requirements apply to certain high-risk customers, certain transactions and activities, or politically exposed persons (as set out in other parts of section 22 and sections 23-26 of the AML/CFT Act). In these circumstances, a reporting entity is required to examine the legitimacy (or potential illegitimacy) of the source of the customer’s wealth or funds. In many situations, this may extend far beyond the originator of any particular wire transfer.
Further information is available in the Enhanced CDD Guidance here: Enhanced Customer Due Diligence Guideline (PDF, 642KB)