Risk-Based Customer Due Diligence: Regulatory Approaches

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Regulators face a challenge in balancing policies on anti-money laundering and combating the financing of terrorism against placing the least burden on outreach to the poor and unbanked. This Technical Note provides guidance on using risk-based approaches to customer due diligence (CDD), supported by examples drawn from around the world. There are three regulatory options for employing risk-based CDD:

  1. Principles-based approach
  2. Single low-risk threshold
  3. Framework of multiple risk tiers.

Each requires regulators to determine the level of risk and then to decide the appropriate processes of simplified due diligence.

Document Information

Document Type Technical Note
Author Patrick Meagher
Year of Publication 2019
Publisher CGAP
Number of Pages 28 pages
Region / Country Global /
Primary Language English (en)
Keywords agricultural risk management, Regulation, Consumer Protection
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