Customer Due Diligence (CDD) is a process of verifying a customer’s identity and assessing their potential risk level before establishing a business relationship with them. In the context of Customer Service Providers (CSPs), CDD should be applied in the following situations:

  1. Onboarding new customers: CSPs should conduct CDD when onboarding new customers to ensure they are not facilitating illicit activities such as money laundering, terrorism financing, or fraud.
  2. High-risk customers: CSPs should apply enhanced due diligence measures when dealing with high-risk customers such as politically exposed persons, non-resident customers, and customers from high-risk countries.
  3. Suspicious activities: If a CSP observes suspicious activities from a customer’s account or transactions, they should conduct CDD to investigate the source of funds and purpose.
  4. Periodic reviews: CSPs should conduct periodic checks of their existing customers to ensure that the information on file is up-to-date and accurate and that there are no changes in the customer’s risk profile.

CDD is a critical process for CSPs to prevent money laundering, terrorist financing, and other illicit activities. Therefore, it should be applied whenever reasonable suspicion or change in the customer’s profile or transaction pattern could increase their risk level.

Customer due diligence (CDD) is a series of checks to help you verify your customers’ identities and assess their risk profiles.

CDD is a regulatory requirement for companies entering into business relationships with customers and is a big part of anti-money laundering (AML) and Know Your Customer (KYC) directives.

A CSP will ensure that all your company’s internal processes are proceeding smoothly and are managed by individuals with experience in what it takes to maintain internal functions professionally and cost-effectively.

With Malta ranking as one of the fastest-growing economies within the EU, it would be an excellent investment to work with a company that offers CDD services.

Why GCS Malta?

At GCS Malta, our compliance experts ensure that your business complies with all statutory obligations under Maltese law. Contact us today for more information on how we can help you reach your business goals.

Article by Neil Psaila