17 Jun Risk-Based Approach
Posted at 20:54h in
Customer Due Diligence (CDD) in Hong Kong, which includes ongoing monitoring, follows a risk- based approach (RBA).
- The purpose of CDD is not to prevent the company from doing business with the customer, but to help effectively assess and manage the risk of money laundering.
- The risk-based-approach requires insurers to undertake enhanced due diligence (EDD) measures for customers that are assessed as being at higher risk for money laundering or terrorist financing.
- EDD measures are designed mitigate potential risk associated with certain types of higher-risk customers and/or when other potential red flags are identified.
- Where the risk associated with a customer is assessed to be lower, the insurer may take simplified CDD measures.