Explain the three R's characteristics of Enhanced Due Diligence (EDD) in KYC along with the meaning of EDD.

Meaning of Enhanced Due Diligence (EDD): It is a rigorous and robust process of investigation over and above (KYC) procedures, that seeks with reasonable assurance to verify and validate the customer's identity; understand and test the customer's profile; business and account activity; identify relevant adverse information and risk assess the potential for money laundering and/or terrorist financing to support actionable decisions to mitigate against financial, regulatory and reputational risk and ensure regulatory compliance. Three R's Characteristics of Enhanced Due Diligence in KYC: Rigorous and robust: Generally, this means consistent, thorough and accurate. The process must be documented and available for inspection by regulators. The process must be SMART (Specific, Measurable, Achievable, Relevant and Time bound), scalable and proportionate to the risk and resources. A 'ball workflow' system ensuring that the KYC process and procedures are defined, repeatable and measurable is recommended. Reasonable Assurance: Reasonableness depends upon factors including jurisdiction, risk and resources. For sanction matches it depends upon information provided by regulators. In all cases the suggested standard is to the civil standard of proof i.e. on the balance of probability. Relevant adverse information: Information obtained from any source, including the Internet, free and subscription databases and the media which is directly or indirectly indicative of involvement in money laundering, terrorist financing or predicate offenses.