Simplified Due Diligence
Simplified due diligence is the lowest level of due diligence that can be completed on a customer. This is considered appropriate where there is little opportunity or risk of your services or customer becoming involved in money laundering or terrorist financing.
Where you are satisfied that a customer, product and service fall into simplified due diligence criteria, then your only requirement is to identify your customer. When completing simplified due diligence, there’s no requirement to verify your customer’s identity as you would with a standard or enhanced due diligence approach. The business relationship should be continually monitored for trigger events, which may create a requirement for further due diligence in the future.
There are a number of factors that can help determine if a situation is low-risk, such as the service or product being provided, or the type of customer you are engaging with. Often customers that are required to disclose information regarding their ownership structure and business activities, or companies that are subject to money laundering regulations, are seen to be lower risk.
For example, if your customer is a public authority in the UK or listed on a regulated market, they may be perceived to be a lower risk as they are required to disclose information. If at any point during the relationship with your customer, additional intelligence becomes available which suggests that the customer or product may pose a higher risk than originally thought, a more enhanced level of due diligence should be conducted.