CDD Final Rule

The CDD Final Rule is a regulatory compliance requirement established by the Financial Crimes Enforcement Network (FinCEN), mandating that financial institutions and other regulated entities must identify and verify the identity of “natural persons” known as beneficial owners.  

The CDD Final Rule is an updated version of customer due diligence (CDD) requirements for financial institutions in the United States and is also an amendment to the Bank Secrecy Act (BSA) regulations designed to enhance financial transparency and detect criminals who exploit companies for concealing their unlawful activities.

Frequently asked questions


Why is the CDD Final Rule Important?


While the BSA already requires CDD measures on individual customers, the CDD Final Rule expands these rules and requires businesses to identify the beneficial owners of legal entity customers when opening new accounts and maintaining the business relationship.

The importance of the Final Rule relies on its goal to stop criminals and terrorists from using other companies to hide the origins of their illegal funds. This amendment came into force after the Panama Papers scandal, which involved large-scale money laundering schemes involving shell companies, offshore accounts, and other illegal activities. 


What is the CDD Final Rule in Simple Words?


What is a Beneficial Owner CDD?


Which Companies are Required to Comply with the CDD Rule?


Is KYC Part of CDD?


What Do CDD Final Rule Red Flags Mean?


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