Before a solicitor acts for any client, they need to know who that client really is and why they want legal services. Customer due diligence (CDD) is how that's done — and it's the foundation of everything else in anti-money laundering compliance. Getting it right protects your firm, your clients, and your career; getting it wrong can mean financial penalties, SRA action, or criminal liability.
This lesson takes you through CDD from first principles to firm-wide systems, building each idea on the last.
- Overview and When CDD is Triggered — what CDD is, the three tiers, the risk-based approach, and the four situations that set the obligation running.
- Standard CDD and Beneficial Ownership — what to obtain and verify for individuals, companies, and trusts, including who counts as a beneficial owner.
- Enhanced Due Diligence (EDD) — the higher-risk situations, PEPs, and the extra steps required.
- Simplified Due Diligence (SDD) — when a lighter approach is allowed, what still must be done, and what rules it out.
- Ongoing Obligations and Failure to Complete CDD — monitoring, record-keeping, and what to do when checks can't be completed.
- Reliance on Third Parties and Firm-Wide Compliance — relying on another firm's CDD, where liability sits, and the systems your firm must maintain.