Enhanced Due Diligence Under IFSCA (AML, CFT, and KYC) Guidelines, 2022

The regulated entities registered with International Financial Services Centre Authority (IFSCA) must apply Enhanced Due Diligence measures when dealing with high-risk customers as per the IFSCA (AML, CFT & KYC) Guidelines, 2022.

When the customer is identified as posing increased ML/FT risk, additional checks and verification measures are to be applied by the IFSC-regulated entities.

High-Risk Customers KYC Requirements

The organizations must inquire about the customer’s occupation and look for adverse media or negative news about the person. Understanding the customer’s financial profile by obtaining information about their source of funds and wealth and verifying the details using reliable, independent sources is also pertinent.

The regulated organizations are also required to understand the customer’s purpose of the transaction and the nature of the business relationship proposed to be established with the organization.

Senior management approval is required before onboarding high-risk customers or executing any transaction with them.

One of the EDD measures is to get the first payment towards the transaction from the customer’s own bank account, with a bank subject to similar AML and Customer Due Diligence standards.

EDD measures are not complete without putting the high-risk customer under ongoing review. The customer profile and the transactions with such customers must be subject to increased/frequent monitoring to track any unusual activities or customer behaviour.

Robust Enhanced Due Diligence will safeguard your business against the increased ML/FT risk.

AML India is an AML Consultancy service provider supporting regulated entities in IFSC to establish and maintain a comprehensive AML/CFT program. We assist clients in designing the AML/CFT policies and procedures, identify the appropriate AML software, and impart comprehensive AML training to the teams to ensure effective implementation of the AML program, including adequate Enhanced Due Diligence process to manage the ML/FT risks.