Which term describes due diligence performed on all customers to identify money-laundering risk?

• A. Simplified due diligence
• B. Ongoing due diligence
• C. Customer due diligence
• D. Enhanced due diligence

Answer: (C)

Customer due diligence is the baseline process of identifying and verifying a customer's identity and assessing the money-laundering risk they pose. It is performed on all customers to establish who the customer is, understand the purpose and nature of the relationship, and determine the appropriate level of ongoing monitoring. This standard approach ensures the business has enough information to spot suspicious activity and comply with AML requirements. Enhanced due diligence is used for higher-risk scenarios and involves deeper verification, ongoing due diligence refers to continuous monitoring of the relationship, and simplified due diligence is a lighter approach reserved for low-risk cases.