Which action is part of Enhanced Due Diligence (EDD)?

• A. Source of income review
• B. Marketing plans
• C. Product pricing
• D. Employee training

Answer: (A)

Enhanced Due Diligence focuses on verifying higher-risk customers by digging deeper into the funds and ownership behind the relationship. The main idea is to assess money-laundering risk by confirming legitimate sources of funds. A source of income review is exactly this: you ask where the money comes from, how it's earned, and whether the funds presented for the relationship align with the customer's profile. This helps detect discrepancies, such as funds that can't be traced to legitimate income or business activities, which could indicate illicit activity.

Marketing plans and product pricing are strategic business details, not measures to verify AML risk at onboarding or ongoing monitoring. Employee training is an important AML control, but it supports the program as a whole rather than representing a direct action taken to assess the specific risk of funds or transactions in an elevated-risk relationship.

In practice, Enhanced Due Diligence would also cover other high-risk checks like beneficial ownership, source of wealth, and ongoing monitoring, but at its heart it includes a thorough review of where the funds originate.