When you collect CIP on a customer/signatory, do you also require CDD? We cited a business unit for not collecting CDD for those customers and signatories that they collected CIP information. They claimed that just because we ask for CIP, CDD is not really required. Thanks for any feedback!

Right from the Customer Due Diligence section in the BSA/AML Manual:

"The cornerstone of a strong BSA/AML compliance program is the adoption and implementation of comprehensive CDD policies, procedures, and processes for all customers, particularly those that present a higher risk for money laundering and terrorist financing."

CIP is step one of the identification process.

CDD is step two. There are certain IDs that can be and should be verified. For example, it only takes a moment to verify that a corporation is registered on our Secretary of State website.

Step three is EDD. Based on risk, certain clients should be subject to additional verification.

Your CIP policies and procedures should spell out, in detail, the customers that are subject to additional scrutiny and exactly what steps should be taken. It cannot be a guessing game on the part of your new account staff.

CIP, and the verification associated with CIP, is required for all customers.

We require a CDD worksheet to be completed for all business customers, collecting information primarily about any MSB activities, Unlawful Internet Gambling activities, and the services in which they will engage (e.g., wire transfers - domestic or international, ACH origination, etc.).

We do not require any such CDD worksheet for individuals, but rather depend upon monitoring for suspicious activity for individuals.