CDD/EDD Risk Assessment Framework
Systematically assess CDD/EDD risk profiles and generate audit-ready compliance documentation
What You Can Do
You can systematically evaluate customer risk profiles using a consistent methodology that integrates beneficial ownership verification, customer intelligence gathering, and risk scoring. The framework guides you through determining whether baseline CDD or enhanced due diligence is required, documents your decision rationale in audit-trail format, and generates compliance-ready files that satisfy regulatory examination standards.
Features
Assess customer type, jurisdiction, industry, and beneficial ownership structure against regulatory risk indicators
Determine baseline CDD vs. EDD requirements using defensible scoring criteria aligned with FinCEN guidance
Systematically verify and document beneficial ownership percentages and control structures for corporate entities
Identify and document politically exposed persons, shell corporations, and high-risk jurisdictions with mitigation steps
Cross-reference findings against FATCA W-9/W-8 requirements, FinCEN customer identification program (CIP) standards, and OFAC controls
Create timestamped, decision-documented files that demonstrate consistent application of your institution's CDD/EDD policies
Identify periodic review intervals and activity-based triggers that warrant CDD/EDD updates
Example Output
Example 1: CDD Baseline Assessment
Customer: ABC Corp (LLC, Delaware, Tech Consulting)
- Risk Score: 3/10 (Low)
- Diligence Level: Baseline CDD
- Key Findings: Single U.S. beneficial owner, standard industry, established banking history
- Documentation: CDD Summary form with beneficial ownership certification, completed
Example 2: EDD Trigger Assessment
Customer: XYZ International Ltd (Hong Kong entity, Import/Export)
- Risk Score: 7/10 (Medium-High)
- Diligence Level: EDD Required
- Trigger Factors: High-risk jurisdiction, cash-heavy activity, complex corporate structure
- Required Actions: Enhanced beneficial ownership verification, source of funds documentation, enhanced ongoing monitoring
- Audit Trail: Decision documented with specific FinCEN guidance citations and escalation rationale
Example 3: PEP Reassessment
Customer: Private Foundation (Former Government Official as Director)
- Risk Score: 8/10 (High)
- Diligence Level: Enhanced EDD + Ongoing Enhanced Monitoring
- Mitigation: Source of funds verification, beneficial owner certification, quarterly activity reviews
- Documentation: PEP notification, risk acceptance memo, enhanced monitoring procedures documented
What's Included
- SKILL.md: Complete CDD/EDD assessment methodology with decision trees and regulatory cross-references
- CDD/EDD Risk Scoring Matrix: Standardized assessment template mapping customer characteristics to risk levels
- Beneficial Ownership Verification Checklist: Step-by-step guidance for entity type identification and beneficial owner documentation
- Regulatory Mapping Worksheet: FATCA/FinCEN/OFAC requirement tracker linked to assessment findings
- Audit Documentation Template: Ready-to-complete form capturing assessment date, decision rationale, and evidence references
Who It's For
- BSA/AML Officers — Conducting customer risk assessments and due diligence determinations
- Compliance Managers — Overseeing CDD/EDD program consistency and examination readiness
- Customer Onboarding Teams — Determining diligence requirements during new account opening
- Compliance Examiners/Internal Audit — Validating CDD/EDD file documentation and policy application
- Risk Management Officers — Assessing customer portfolio risk and EDD trigger identification
Best For
- New Customer Risk Assessments — Determining baseline CDD vs. EDD requirements for account opening
- Periodic CDD/EDD Reviews — Reassessing existing customer risk profiles on scheduled intervals
- Activity-Based EDD Triggers — Responding to transaction monitoring alerts or behavioral changes requiring enhanced review
- PEP and High-Risk Entity Documentation — Capturing beneficial ownership and control structures for complex or higher-risk customers
- Examination File Preparation — Organizing CDD/EDD documentation with clear decision trails and regulatory alignment
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