EDD (Enhanced Due Diligence)

What is enhanced due diligence?

Enhanced due diligence is what standard CDD escalates into when the risk is higher. Instead of the baseline identify-and-verify steps, the firm digs deeper: additional information on the customer and beneficial owners, on the intended nature of the relationship, on source of funds and source of wealth, plus senior-management approval to take on or continue the relationship and intensified ongoing monitoring.

When is EDD required?

Irish designated persons already apply EDD under the Criminal Justice Act 2010 in familiar cases, and the AMLR carries these forward from 10 July 2027:

• Politically exposed persons (PEPs), their family members and known close associates;
• customers connected with high-risk third countries identified by the EU;
• unusually large or complex transactions, and unusual patterns with no apparent lawful purpose;
• cross-border correspondent relationships and other situations the firm's own risk assessment flags as higher risk.

What changes under the AMLR?

The headline addition is a rule for high-net-worth relationships. EDD is required where the test is met cumulatively: the firm handles assets of €5m or more for a client whose total wealth is at least €50m (excluding their main residence). Both limbs must be satisfied — a €5m mandate for a client of ordinary wealth, or a very wealthy client with a small mandate, does not by itself trigger this provision. AMLA guidance on applying the €50m total-wealth test is due by 10 July 2027, so the operational detail is still being finalised.

How should Irish firms prepare?

Make sure your risk-rating methodology reliably routes clients into EDD, that source-of-wealth evidence standards are written down rather than ad hoc, and that senior-management sign-off is captured in the file. For accountants, solicitors and TCSPs with wealthy private clients, the cumulative high-net-worth test is worth building into onboarding questions now.

CompliDesk risk-rates every client and escalates EDD cases automatically, with the approval trail built in — see how it works.