GlossaryEN1 min readUpdated: Jun 18, 2026

Enhanced Due Diligence

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Last updated: 18 June 2026Published: 27 January 2026

Source: https://www.investopedia.com/terms/e/enhanced-due-diligence.asp

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Logistics Concept

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Definition & Explanation

Elevated risk signals – a customer from a high-risk jurisdiction, an unusual payment structure, or an unidentified beneficial owner – trigger Enhanced Due Diligence (EDD): a deeper screening and monitoring process that goes beyond standard customer due diligence (CDD). In logistics and trade finance, EDD applies to high-risk business partners, transactions involving sensitive regions, or suspicious cargo flows. The process covers in-depth investigation into business models, sources of funds, and ultimate beneficial ownership, combined with ongoing transaction monitoring. Freight forwarders and financial intermediaries are legally required to apply EDD in many jurisdictions when standard KYC measures fall short—for instance, in dealings with politically exposed persons (PEPs) or counterparties linked to sanctions lists. EDD is distinct from simplified due diligence (SDD): it demands a documented risk decision and a heightened internal escalation level.

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