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It goes beyond standard Customer Due Diligence by verifying source of funds, source of wealth, the full ultimate beneficial ownership chain, and adverse-media and sanctions exposure before a relationship is approved by senior management." } }, { "@type": "Question", "name": "When is EDD legally required in the EU and the Czech Republic?", "acceptedAnswer": { "@type": "Answer", "text": "Under the EU AML Directives and Czech Act No. 253/2008 Coll., EDD is mandatory when the client or beneficial owner is a politically exposed person, when a counterparty is linked to a high-risk third country, when the relationship is non-face-to-face without qualified electronic ID, when the transaction is unusually large or has no clear economic purpose, or when the firm's own risk assessment flags the relationship as higher risk." } }, { "@type": "Question", "name": "What is the difference between EDD, CDD, and SDD?", "acceptedAnswer": { "@type": "Answer", "text": "Simplified Due Diligence (SDD) is for low-risk clients and only requires identity verification. Customer Due Diligence (CDD) is the standard tier and adds independent verification, UBO identification, and an understanding of the purpose of the relationship. Enhanced Due Diligence (EDD) adds source-of-funds and source-of-wealth checks, deeper UBO mapping, sanctions and adverse-media screening, and written senior-officer sign-off." } }, { "@type": "Question", "name": "How long does an Enhanced Due Diligence report take?", "acceptedAnswer": { "@type": "Answer", "text": "A standard EDD engagement at Exero Group takes 5 to 10 working days depending on the number of jurisdictions and the complexity of the ownership chain. Expedited 48-hour EDD is available for time-sensitive transactions where the basic documentation is already in hand." } }, { "@type": "Question", "name": "What are the most common reasons EDD files fail audit?", "acceptedAnswer": { "@type": "Answer", "text": "The three failures we see most often are: an ultimate beneficial owner identified on paper but never independently verified, source-of-funds documented for the entity but not for the specific transaction, and screening that is run once at onboarding and never refreshed. Any one of them is enough to make the file indefensible if the regulator asks." } } ] }, { "@context": "https://schema.org", "@type": [ "BlogPosting", "Article" ], "@id": "https://exerogroup.cz/blog/what-is-enhanced-due-diligence-complete-guide#article", "headline": "Enhanced Due Diligence Guide 2026", "description": "What is Enhanced Due Diligence (EDD)? Triggers, AML requirements, EDD checklist, and how Exero Group runs cross-border EDD across the EU.", "datePublished": "2026-06-05T00:00:00+00:00", "dateModified": "2026-06-05T00:00:00+00:00", "author": { "@type": "Organization", "name": "Exero Group" }, "publisher": { "@id": "https://exerogroup.cz/#organization" }, "mainEntityOfPage": { "@type": "WebPage", "@id": "https://exerogroup.cz/blog/what-is-enhanced-due-diligence-complete-guide" }, "inLanguage": "en", "isAccessibleForFree": true, "articleBody": "Enhanced Due Diligence (EDD) is the deepest tier of customer and counterparty verification under EU anti-money-laundering (AML) law. Where standard Customer Due Diligence (CDD) confirms who a client is, EDD asks the harder questions: where their money actually comes from, who ultimately controls them, what jurisdictions they touch, and whether any of that creates unacceptable risk for the institution onboarding them. When is Enhanced Due Diligence required? Under the EU AML Directives and the Czech AML Act (Act No. 253/2008 Coll.), EDD is mandatory whenever any of the following is present: The client or their ultimate beneficial owner is a politically exposed person (PEP) , a family member, or a close associate. The transaction or counterparty is linked to a high-risk third country on the EU or FATF list. The relationship is non-face-to-face and cannot be verified through a qualified electronic identification scheme. The transaction is unusually large, complex, or has no obvious economic purpose . The institution's own risk assessment flags the relationship as higher risk (sector, ownership structure, geography, product). EDD vs CDD vs SDD The three tiers form a risk-based ladder: Simplified Due Diligence (SDD) – low-risk clients (listed companies, regulated entities). Identity verification is enough. Customer Due Diligence (CDD) – the standard tier. Identify the client, verify identity from independent sources, identify the UBO, understand the purpose of the relationship. Enhanced Due Diligence (EDD) – everything in CDD plus source-of-funds and source-of-wealth verification, deeper UBO mapping, adverse-media and sanctions screening, and senior-management sign-off before onboarding. Enhanced Due Diligence checklist A defensible EDD file typically contains: Full corporate ownership chart up to the ultimate beneficial owner, with documentary support for each layer. Independent verification of UBO identity (passport or national ID + proof of address less than three months old). PEP, sanctions, and adverse-media screening against a recognised database, with screenshots dated and signed. Source-of-funds evidence for the specific transaction (bank statements, contracts, audited accounts). Source-of-wealth evidence for the UBO (employment history, business sales, inheritance documents). Jurisdictional risk assessment for every country in the ownership chain and the flow of funds. Site visit or video-verified meeting where the client is non-face-to-face. Senior-officer approval recorded in writing before the relationship goes live. Enhanced ongoing monitoring schedule, with a documented review cadence (typically every 6 to 12 months). How Exero Group runs EDD across the EU From our Prague office we run EDD on counterparties, investment targets and high-risk clients across the European Union. A typical engagement combines registry research in every relevant jurisdiction, multilingual adverse-media review (EN, CS, DE, RU, UA, PL), sanctions and PEP screening, discreet human-source enquiries where permitted, and a written report formatted to satisfy bank or auditor review. Turnaround is normally 5 to 10 working days; expedited 48-hour EDD is available for time-sensitive transactions. Common EDD mistakes that fail audit The three failures we see most often when reviewing other firms' files: (1) UBO identified on paper but never independently verified, (2) source-of-funds documented for the entity but not for the specific transaction, (3) screening run once at onboarding and never refreshed. Any one of them is enough to make the file indefensible if the regulator asks. If you need EDD on a specific counterparty, contact Exero Group for a scoped quote and timeline.", "wordCount": 540, "speakable": { "@type": "SpeakableSpecification", "cssSelector": [ ".prose-exero h2", ".prose-exero p" ] }, "image": [ "https://akreodypygwbrmmgpmsq.supabase.co/storage/v1/object/public/blog-images/2026-06-01-edd.jpg" ], "thumbnailUrl": "https://akreodypygwbrmmgpmsq.supabase.co/storage/v1/object/public/blog-images/2026-06-01-edd.jpg", "articleSection": "Corporate Due Diligence", "about": { "@type": "Thing", "name": "Corporate Due Diligence", "url": "https://exerogroup.cz/blog/category/corporate-due-diligence" }, "keywords": "enhanced due diligence, what is enhanced due diligence, EDD, enhanced due diligence checklist, enhanced customer due diligence, enhanced due diligence requirements, AML EDD, KYC EDD, due diligence solicitors, simplified due diligence, customer due diligence checklist, Exero Group" } ] --- [![Exero Group, Professional Private Detectives](/assets/exero-logo-CI5AokNf.webp)](/) [Home](/) [Services](/services) - [All services](/services) - [Insurance Fraud](/services/insurance-fraud) - [Corporate Investigations](/services/corporate) - [Surveillance](/services/surveillance) - [Legal Support](/services/legal) - [Enhanced Due Diligence](/services/due-diligence) - [Data Intelligence](/services/data-intelligence) [Case Studies](/case-studies)[About](/about)[FAQ](/faq)[Testimonials](/testimonials)[Blog](/blog) [](https://www.facebook.com/exerogroupcz)[](https://www.instagram.com/exerogroup)[](https://x.com/exerogroup) ENCZ [Assign a Case](https://assignment.exerogroup.cz) [All articles](/blog)[ Corporate Due Diligence ](/blog/category/corporate-due-diligence)June 2026 # Enhanced Due Diligence Guide 2026 By Exero Group · Exero Group, Prague ![Enhanced Due Diligence (EDD) checklist and process by Exero Group](https://akreodypygwbrmmgpmsq.supabase.co/storage/v1/object/public/blog-images/2026-06-01-edd.jpg) Enhanced Due Diligence (EDD) is the deepest tier of customer and counterparty verification under EU anti-money-laundering (AML) law. Where standard Customer Due Diligence (CDD) confirms _who_ a client is, EDD asks the harder questions: where their money actually comes from, who ultimately controls them, what jurisdictions they touch, and whether any of that creates unacceptable risk for the institution onboarding them. ## When is Enhanced Due Diligence required? Under the EU AML Directives and the Czech AML Act (Act No. 253/2008 Coll.), EDD is mandatory whenever any of the following is present: - The client or their ultimate beneficial owner is a **politically exposed person (PEP)**, a family member, or a close associate. - The transaction or counterparty is linked to a **high-risk third country** on the EU or FATF list. - The relationship is **non-face-to-face** and cannot be verified through a qualified electronic identification scheme. - The transaction is **unusually large, complex, or has no obvious economic purpose**. - The institution's own risk assessment flags the relationship as higher risk (sector, ownership structure, geography, product). ## EDD vs CDD vs SDD The three tiers form a risk-based ladder: - **Simplified Due Diligence (SDD)** – low-risk clients (listed companies, regulated entities). Identity verification is enough. - **Customer Due Diligence (CDD)** – the standard tier. Identify the client, verify identity from independent sources, identify the UBO, understand the purpose of the relationship. - **Enhanced Due Diligence (EDD)** – everything in CDD plus source-of-funds and source-of-wealth verification, deeper UBO mapping, adverse-media and sanctions screening, and senior-management sign-off before onboarding. ## Enhanced Due Diligence checklist A defensible EDD file typically contains: 1. Full corporate ownership chart up to the ultimate beneficial owner, with documentary support for each layer. 2. Independent verification of UBO identity (passport or national ID + proof of address less than three months old). 3. PEP, sanctions, and adverse-media screening against a recognised database, with screenshots dated and signed. 4. Source-of-funds evidence for the specific transaction (bank statements, contracts, audited accounts). 5. Source-of-wealth evidence for the UBO (employment history, business sales, inheritance documents). 6. Jurisdictional risk assessment for every country in the ownership chain and the flow of funds. 7. Site visit or video-verified meeting where the client is non-face-to-face. 8. Senior-officer approval recorded in writing before the relationship goes live. 9. Enhanced ongoing monitoring schedule, with a documented review cadence (typically every 6 to 12 months). ## How Exero Group runs EDD across the EU From our Prague office we run EDD on counterparties, investment targets and high-risk clients across the European Union. A typical engagement combines registry research in every relevant jurisdiction, multilingual adverse-media review (EN, CS, DE, RU, UA, PL), sanctions and PEP screening, discreet human-source enquiries where permitted, and a written report formatted to satisfy bank or auditor review. Turnaround is normally 5 to 10 working days; expedited 48-hour EDD is available for time-sensitive transactions. ## Common EDD mistakes that fail audit The three failures we see most often when reviewing other firms' files: (1) UBO identified on paper but never independently verified, (2) source-of-funds documented for the entity but not for the specific transaction, (3) screening run once at onboarding and never refreshed. Any one of them is enough to make the file indefensible if the regulator asks. If you need EDD on a specific counterparty, contact Exero Group for a scoped quote and timeline. ## Frequently asked questions ### [What is Enhanced Due Diligence (EDD)?](#edd-vs-cdd-vs-sdd) Enhanced Due Diligence is the deepest tier of customer and counterparty verification required by EU anti-money-laundering law. It goes beyond standard Customer Due Diligence by verifying source of funds, source of wealth, the full ultimate beneficial ownership chain, and adverse-media and sanctions exposure before a relationship is approved by senior management. ### [When is EDD legally required in the EU and the Czech Republic?](#when-is-enhanced-due-diligence-required) Under the EU AML Directives and Czech Act No. 253/2008 Coll., EDD is mandatory when the client or beneficial owner is a politically exposed person, when a counterparty is linked to a high-risk third country, when the relationship is non-face-to-face without qualified electronic ID, when the transaction is unusually large or has no clear economic purpose, or when the firm's own risk assessment flags the relationship as higher risk. ### [What is the difference between EDD, CDD, and SDD?](#edd-vs-cdd-vs-sdd) Simplified Due Diligence (SDD) is for low-risk clients and only requires identity verification. Customer Due Diligence (CDD) is the standard tier and adds independent verification, UBO identification, and an understanding of the purpose of the relationship. Enhanced Due Diligence (EDD) adds source-of-funds and source-of-wealth checks, deeper UBO mapping, sanctions and adverse-media screening, and written senior-officer sign-off. ### [How long does an Enhanced Due Diligence report take?](#how-exero-group-runs-edd-across-the-eu) A standard EDD engagement at Exero Group takes 5 to 10 working days depending on the number of jurisdictions and the complexity of the ownership chain. Expedited 48-hour EDD is available for time-sensitive transactions where the basic documentation is already in hand. ### [What are the most common reasons EDD files fail audit?](#common-edd-mistakes-that-fail-audit) The three failures we see most often are: an ultimate beneficial owner identified on paper but never independently verified, source-of-funds documented for the entity but not for the specific transaction, and screening that is run once at onboarding and never refreshed. Any one of them is enough to make the file indefensible if the regulator asks. ## Need investigative support on a similar matter? Talk to a senior Exero Group investigator in confidence. [Assign a Case](https://assignment.exerogroup.cz) ## Related insights [ ![Side-by-side comparison of EU GDPR and US FCRA background check compliance documents over a world map](https://akreodypygwbrmmgpmsq.supabase.co/storage/v1/object/public/blog-images/posts%2Fbackground-check-compliance-eu-vs-usa-2026-05-13-v2.jpg) ### Background Check Compliance: EU vs USA Guide ](/blog/background-check-compliance-eu-vs-usa-comparison)[ ![Cover image for: The Strategic Role of Private Investigators in Political Campaigns](/blog-covers/68d927ff7e443e34d9cf6388.jpg) ### Private Investigators in Political Campaigns ](/blog/the-strategic-role-of-private-investigators-in-political-campaigns)[ ![Cover image for: The Hidden Risks of Employee Fraud: What Every Business Should Know](/blog-covers/68d517ea618fbac5993f7f92.jpg) ### The Hidden Risks of Employee Fraud: What Every Business Should Know ](/blog/the-hidden-risks-of-employee-fraud-what-every-business-should-know)[ ![Cover image for: Workplace Investigations: Preventing and Addressing Employee Misconduct](/blog-covers/68d518d2618fbac5993f824a.jpg) ### Workplace Investigations: Preventing and Addressing Employee Misconduct ](/blog/workplace-investigations-preventing-and-addressing-employee-misconduct)[ ![Cover image for: Corporate Espionage in Central Europe: Warning Signs and Prevention Strategies](/blog-covers/68d51663618fbac5993f7aa9.jpg) ### Corporate Espionage in Central Europe: Warning Signs and Prevention Strategies ](/blog/corporate-espionage-in-central-europe-warning-signs-and-prevention-strategies)[ ![Cover image for: How Private Detective Agencies Support Corporate Security](/blog-covers/68d517ff1b64b98532da01bd.jpg) ### How Private Detective Agencies Support Corporate Security ](/blog/how-private-detective-agencies-support-corporate-security) ![Exero Group](/assets/exero-logo-CI5AokNf.webp) 35+ years of discreet investigative expertise for corporations, insurers, attorneys, and private clients requiring trusted intelligence and absolute confidentiality. 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