In 2025, according to the European Commission, the total volume of fines for violations of EU AML and KYC-AML requirements exceeded €6.5 billion, a record high in the history of regulation. At the same time, more than 40% of corporate account freezes in Europe are specifically linked to insufficient verification of EU counterparties and failure to meet compliance requirements in Europe. These figures are not just impressive: they signal fundamental changes in approaches to legal support for EU business and company registration in the EU.
Today no company operating in cross-border chains can afford to ignore Due Diligence in the EU. Regulators are tightening control, banks are implementing multi-level systems of risk-based approach and regulatory risk mapping, and businesses face real threats: from reputational losses to a complete freeze of operations.
Why has this become critical? The new EU directives (6AMLD, AMLR, eIDAS) require not just the formal collection of documents, but a deep assessment of risks, transparency of ownership structure and continuous compliance risk assessment. Without this, company registration in the EU and opening bank accounts become practically impossible.
Due Diligence in the EU: types and definition
Due Diligence in the EU: this is a comprehensive verification procedure that enables businesses to identify and mitigate risks, as well as confirm the legality and transparency of potential deals or partnerships. There are different types of due diligence, each addressing its own tasks and applied in specific situations, ranging from client checks to the analysis of corporate and legal risks. Below we will consider the main types of such checks and the features of their implementation.
Customer Due Diligence: basic level of verification
COREDO’s practice confirms that digital onboarding and remote verification can shorten verification times to 1–2 days, provided documents are prepared correctly. It’s important to note that CDD requires not only personal data but also information about ownership structure, especially when it comes to legal entities. CDD is usually completed within 5 working days; however, if inconsistencies are found the process may be prolonged.
Enhanced Due Diligence – screening of high-risk clients
Enhanced Due Diligence in the EU applies to clients from high-risk countries, PEPs (politically exposed persons), as well as to structures with opaque ownership. Beneficiary checks in the EU have become mandatory: disclosure of ultimate beneficial owners and analysis of sources of funds (source of wealth) are key elements of EDD.
The COREDO team has implemented projects where EDD included not only standard checks against FATF and OECD lists, but also in-depth jurisdictional analysis, assessment of reputational risks and PEP monitoring. For this, international databases, OSINT and HUMINT methods are used, as well as analysis of court decisions and media mentions. Important: EDD requires documentary proof of the origin of assets and transparency of the ownership chain.
Risk-based approach to each client
The solution developed by COREDO allows building standardized risk scoring based on regulatory risk mapping and compliance risk assessment. For low-risk clients basic CDD is sufficient, for medium-risk clients an enhanced check is required, and for high-risk clients a full EDD with regular monitoring. Such a layered due diligence model ensures a balance between speed and depth of the review.
EU Requirements 2025: What Has Changed
In 2025 the EU regulatory framework is changing radically: new requirements for the regulation of financial institutions are being introduced and controls are being tightened to combat money laundering and terrorist financing. These changes affect key directives, including the AMLR and the updated 6AMLD, setting new standards for all market participants.
AMLR and 6AMLD: Key Directives
AMLR (Anti-Money Laundering Regulation) and 6AMLD (Sixth Anti-Money Laundering Directive) are the main documents defining EU AML checks and EU KYC-AML requirements. In 2025 new criteria were introduced for checks under AMLR and 6AMLD: mandatory disclosure of beneficiaries, automated AML filters, regular compliance audits and reporting of suspicious EU transactions.
eIDAS and digital identification
For companies operating in multiple jurisdictions, it is important to consider levels of assurance (eLoA) – from low to high, depending on transaction volume and risk level. COREDO’s practice confirms: a properly chosen EU eKYC platform can reduce errors and speed up verification.
EU Sanctions Lists and FATF
The COREDO team implements systems that not only identify matches but also carry out false-positive resolution procedures, which significantly reduce the risk of erroneous transaction blocking.
Due Diligence check: step-by-step process
The step-by-step process of undergoing a Due Diligence check includes sequential stages, each aimed at a comprehensive and objective assessment of a company or asset. At every stage it is important to work through the details thoroughly to identify potential risks and make informed decisions. Below we consider the first steps, starting with the preparation of the necessary documents and information.
Preparation of documents and information
I recommend organizing documents in a digital archive with a compliance audit trail, which facilitates the review and speeds up the company registration process in the EU.
Electronic identification and digital onboarding
From COREDO’s practice: the main mistake is discrepancies in document data and the absence of up-to-date addresses. It is important to check the accuracy of all information in advance.
Screening against sanctions lists and AML filters
AML checks in the EU include automatic screening against EU sanctions lists, FATF, and OECD using AML filters and scoring systems. If a match with a sanctions list occurs, the procedure requires an immediate internal investigation and, if necessary, filing an automated report (SAR).
AI monitoring of EU transactions enables the detection of suspicious patterns and the prevention of risks before a transaction is executed.
Reputation checks and source of funds
Reputational risks can lead to refusal of company registration or account opening, so the COREDO team recommends conducting a preliminary reputational assessment before submitting an application.
Analysis of business structure and beneficiaries
Verification of EU beneficiaries and business structure requires analysis of the ownership chain, identifying ultimate owners, and checking trusts, funds, and other complex structures. The layered due diligence model helps reveal hidden risks and ensure transparency for regulators.
Screening of high-risk jurisdictions
Screening of high-risk countries for the EU is conducted based on updated lists (July 2025). It is important to consider the criteria for inclusion in AML and tax lists, as well as the enhanced requirements for transactions with such countries.
The COREDO solution includes automatic synchronization with FATF and OECD recommendations, which minimizes the risk of errors when working with cross-border structures.
Monitoring of PEPs and related persons
Enhanced requirements for control and regular monitoring of transactions apply to PEPs.
Specialized types of Due Diligence
Specialized types of Due Diligence make it possible to identify risks more deeply and accurately in specific areas of a company’s activity that go beyond a standard review. These types include analysis of environmental, social, governance and other specific aspects, which is especially important for companies operating in high-risk or regulated industries.
ESG Due Diligence: ESG risk assessment
ESG Due Diligence in the EU is becoming a standard for large companies and investment projects. EU ESG risk reviews include analysis of carbon footprint, labor practices, and corporate governance. Integrating ESG due diligence into COREDO processes allows identifying sustainability risk and minimizing long-term threats to the business.
Counterparty cybersecurity due diligence
EU counterparty cybersecurity checks include digital maturity assessment, data protection assessment, and GDPR compliance. Cyber risk assessment, an integral part of compliance due diligence for cybersecurity, is especially important when working with cloud and fintech platforms.
Due Diligence: sanctions risk assessment
Sanctions Due Diligence involves expanded checks across all sanctions lists of the EU, US, UN, OECD, as well as analysis of indirect sanctions risks. In 2025 the 18th EU sanctions package came into force, requiring updates to internal compliance policies and licensing procedures.
Due Diligence for CBI/RBI investment programs
Due Diligence for EU CBI/RBI programs (Citizenship/Residence by Investment) requires a layered due diligence model, verification of source of funds and compliance with harmonized FATF 2025 standards. Documentation and reporting for investment programs – a separate area in which COREDO has accumulated significant experience.
Technologies and Automation of Due Diligence in the EU
Technologies and automation of Due Diligence have become the foundation of modern compliance in the European Union, allowing companies to scale counterparty checks and reduce the risks of financial crime. implementation of artificial intelligence, automated scoring systems and integration with international databases speed up decision-making, reducing verification time from weeks to hours. Such solutions not only improve the quality of analysis through a multichannel approach but also help European entities comply with tightening regulatory requirements for proper due diligence.
AI monitoring and automated systems
Automated SAR reports and scoring systems minimize the human factor, while key decisions are always made by an expert.
Blockchain and smart contracts for compliance
EU blockchain technology checks and the implementation of smart contracts make it possible to track traceable funds pathways, automate compliance due diligence and increase the transparency of financial flows. Blockchain for compliance is not only a trend but also a tool for reducing risks in complex international structures.
Compliance technology stack, choice of tools
The choice of a compliance technology stack depends on the scale of the business and the specifics of operations. COREDO’s solution includes integration of eKYC, AML filters, transaction monitoring, which allows optimizing the compliance workflow and achieving a high ROI from automation.
Role of the Compliance Officer: organizational requirements
The role of the Compliance Officer and organizational requirements come to the forefront amid tightening regulation and growing reputational risks. The competent structuring of this function determines not only compliance with internal and external standards but also the resilience of the business when legislative requirements change. Below we consider the key responsibilities of the Compliance Officer in 2025 and the organizational aspects of implementing an effective compliance system.
Responsibilities of the Compliance Officer in 2025
Whistleblowing systems and internal policies
Compliance Audit and company inspections
EU compliance audits involve regular risk assessment, identifying gaps (compliance gap analysis), documenting results and implementing a remediation plan. The frequency of audits depends on the level of risk and the specifics of the business.
Practical recommendations and checklists
Practical recommendations and checklists help structure and simplify preparation for complex procedures such as Due Diligence. The following subitems and checklists will help you go through all the key stages of the review step by step and avoid common mistakes, allowing only well-considered decisions going forward.
Checklist for preparing for Due Diligence
| Step | Action | Responsible | Timeline | Status |
|---|---|---|---|---|
| 1 | Collect incorporation documents | Legal Department | 1 week | ☐ |
| 2 | Prepare information on beneficiaries | Finance Department | 1 week | ☐ |
| 3 | Gather financial statements (3 years) | Accounting | 2 weeks | ☐ |
| 4 | Conduct an internal sanctions check | Compliance | 3 days | ☐ |
| 5 | Prepare information on counterparties | Procurement/Sales | 1 week | ☐ |
| 6 | Perform eKYC verification | IT/Compliance | 5 days | ☐ |
| 7 | Document all checks | Compliance | Ongoing | ☐ |
Common mistakes and how to avoid them
- Incomplete document preparation – use checklists and internal audits.
- Ignoring high-risk jurisdictions: regularly update lists and conduct jurisdictional analysis.
- Insufficient beneficiary verification – implement a layered due diligence model.
- Lack of documentation – use a compliance audit trail.
- Untimely updating of information – set up scheduled re-screening.
Timing and cost of due diligence
Regular due diligence monitoring
Regular monitoring and updating of Due Diligence not only allow identifying new risks, but also enable timely responses to changes in counterparties’ activities or in the regulatory environment. This approach ensures the relevance of collected data and effective risk management throughout the entire period of cooperation.
Continuous due diligence and post-monitoring
Monitoring does not end after the initial check: regular scheduled re-screening, transaction monitoring EU and updates to beneficiary information become standard. Compliance monitoring dashboard and automated systems make it possible to detect suspicious transactions and respond promptly.
Reporting on suspicious transactions
Due Diligence in EU countries: regional specifics
Regional specifics of Due Diligence across different EU countries require a deep understanding of local legislation, verification standards and approaches to assessing integrity. In different EU jurisdictions not only the list of required documents may differ, but also the evaluation criteria and the extent of involvement of state and international bodies. Below we will consider the key differences in country-specific requirements.
Differences in requirements by country
Multi-jurisdictional compliance requires taking into account both the unified EU requirements and national specifics (for example, in Luxembourg, the Netherlands, Malta, Cyprus). Jurisdictional analysis and cross-border due diligence allow processes to be adapted to a specific country.
Characteristics of financial institutions versus non-financial companies
Compliance due diligence for financial institutions is stricter: automated systems, regular audits and reporting are mandatory. For non-financial companies the requirements are simpler, but the thresholds for checks are lower.
Due diligence in business processes
Integration of Due Diligence into business processes makes it possible not only to identify risks at early stages but also to build transparent, manageable processes within the company. Such integration makes it easier to adapt the workflow and increase the efficiency of key operations, especially when preparing for deals and attracting investment.
Workflow optimization: integration into operations
Embedding Due Diligence into account opening processes, integration with CRM and automation of routine operations help increase the scalability of compliance processes and reduce the burden on employees. Staff training – a mandatory element of compliance workflow optimization.
Documentation and audit trail
All stages of Due Diligence must be documented: compliance audit trail, storage of documents in secure archives, preparation for regulatory inspections. The use of modern document management systems simplifies the process.
Practical recommendations and key takeaways
Key conclusions and practical recommendations will help entrepreneurs focus on the truly important aspects of the business and make decisions more consciously. This section presents the main insights and concrete steps capable of improving a company’s efficiency and competitiveness.
Main insights for entrepreneurs
- Due Diligence: this is not a one-time check but a continuous process: Regular monitoring and updating of information are the cornerstone of long-term business security.
- Automation saves time and money: Modern RegTech solutions can speed up checks by 3-5 times, and ROI is achieved within 12-18 months.
- Risk-based approach is the key to efficiency: Not all clients require the same level of scrutiny; proper segmentation saves resources and reduces risks.