SDD
Simplified Due Diligence
Definition
Reduced due diligence measures permitted for lower-risk customers and products where the risk of money laundering or terrorist financing is assessed as low. SDD allows firms to apply lighter-touch identification and verification procedures.
Regulatory Context
Permitted under the EU Money Laundering Directives and equivalent national legislation where firms can demonstrate that the ML/TF risk is low. Regulators have increasingly scrutinised the use of SDD to ensure it is not applied inappropriately.