Customer Due Diligence (CDD) Procedure (UK) by Study Academy
Customer Due Diligence (CDD) Procedure outlines safe practices for verifying customer identity and beneficial ownership to reduce financial crime risk and maintain UK regulatory compliance. Developed by Study Academy, experts in accredited compliance and business-skills training.
Customer Due Diligence (CDD) Procedure (UK, 2025 Edition)
Purpose
This Procedure supports the AML Policy by setting out the required steps for verifying the identity of customers, understanding the nature of the business relationship and applying a risk-based approach to due diligence.
Scope
Applies to all business units responsible for client onboarding, account opening, learner enrolment where fee payments occur, and to any function that establishes an ongoing business relationship.
CDD Requirements
Identify the customer.
Verify the customer’s identity on the basis of reliable and independent documents, data or information.
Identify the beneficial owner (where the customer is not a natural person) and take reasonable measures to verify their identity.
Understand and, as appropriate, obtain information on the purpose and intended nature of the business relationship.
Conduct ongoing monitoring of the business relationship.
Standard Due Diligence
For UK individuals, acceptable verification may include a government-issued photo ID (passport, driving licence) and a recent proof of address (utility bill, bank statement, council tax).
For UK companies, obtain company registration details from Companies House, details of directors and persons with significant control (PSC).
Enhanced Due Diligence (EDD)
EDD must be applied in higher-risk situations, including but not limited to:
Politically exposed persons (PEPs) and their close associates.
Customers from high-risk third countries.
Complex or unusually large transactions or unusual transaction patterns.
Non face-to-face relationships without adequate safeguards.
EDD measures may include obtaining senior management approval, establishing source of funds and source of wealth, and increasing the frequency of ongoing monitoring.
Simplified Due Diligence
May be applied only where permitted by law and where the risk of money laundering is demonstrably low.
Ongoing Monitoring
Customer information shall be kept up-to-date and transaction behaviour reviewed to detect anomalies.
Where discrepancies arise in Companies House data, appropriate steps shall be taken to resolve them.
Data Protection
Personal data obtained for CDD purposes shall be processed lawfully, fairly and transparently, used only for AML compliance and related purposes, and retained in accordance with the organisation’s retention schedule.
Record Keeping
CDD files shall be retained for at least five (5) years from the end of the business relationship.
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England & Wales note
This version is drafted for England & Wales. Scotland and Northern Ireland differ on some points — for example notice periods and tribunal procedure. Tell GitLaw where you hire and it adjusts the draft.
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