---
title: "Decide and record enhanced due diligence on a higher-risk client"
url: "https://ailawframework.com/obligations/aml-ctf-the-practice-as-a-reporting-entity/decide-and-record-enhanced-due-diligence-on-a-higher-risk-client"
type: "task"
site: "AI Law Framework"
id: "A52OB-X20260927-4"
practice_area: "AML/CTF — the practice as a reporting entity"
tier: "yellow"
lawyer_review: "required"
last_reviewed: "2026-10-22"
---

# Decide and record enhanced due diligence on a higher-risk client

> Assemble the indicators the file actually shows — the entity structure, the countries involved, the payment route, the pattern against the practice's risk assessment — into a comparison the lawyer works from, then…

Canonical page: https://ailawframework.com/obligations/aml-ctf-the-practice-as-a-reporting-entity/decide-and-record-enhanced-due-diligence-on-a-higher-risk-client  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [AML/CTF — the practice as a reporting entity](https://ailawframework.com/obligations/aml-ctf-the-practice-as-a-reporting-entity.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | Assemble the indicators the file actually shows — the entity structure, the countries involved, the payment route, the pattern against the practice's risk assessment — into a comparison the lawyer works from, then draft the additional-measures section of the record to the lawyer's decision on each measure. |
| What the lawyer must review | The lawyer decides whether the file is higher risk and which measures apply; a rating the tool produced is an input, never the decision. Source of funds and source of wealth must be verified against documents — the client's explanation on its own is not verification. If the measures cannot be completed, the question becomes whether to act at all, and that belongs to the senior manager named in the policies. |
| Written for / versions | 1 jurisdiction versions below |

## Checking plan

**Source-by-source verification**

Trace relied-on content to independent sources and check for relevant material the output has missed.

- What the AI does: Assemble the indicators the file actually shows — the entity structure, the countries involved, the payment route, the pattern against the practice's risk assessment — into a comparison the lawyer works from, then draft the additional-measures section of the record to the lawyer's decision on each measure.
- What the lawyer does: The lawyer decides whether the file is higher risk and which measures apply; a rating the tool produced is an input, never the decision. Source of funds and source of wealth must be verified against documents — the client's explanation on its own is not verification. If the measures cannot be completed, the question becomes whether to act at all, and that belongs to the senior manager named in the policies.
- Who reviews: Responsible lawyer with competence in the matter
- Basis: Practical workflow informed by the linked primary sources; the traffic light and working checks are editorial guidance, not a court classification.
- Why: The level reflects what the work is, the consequence of an error, and how much of the output the lawyer must independently re-derive.

## Checks the lawyer makes

1. Confirm the higher-risk trigger is one the practice's policies actually name — politically exposed person, higher-risk country, opaque structure, unusual payment route — and record which one.
2. Verify source of funds and source of wealth against documents, and record which document supports which figure.
3. Check every additional measure the policies require for this trigger has been applied and its result recorded, including the measures you decided not to apply and the reason.
4. Screen the customer, the beneficial owners and the persons instructing, and record the date and the list used.
5. Record the senior manager's approval to act, or the decision to decline or terminate, before the next step is taken on the file.

## Notes

- These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.

## Sources

- [AUSTRAC: Overview of customer due diligence reform](https://www.austrac.gov.au/about-us/amlctf-reform/reforms-guidance/amlctf-program-reform/customer-due-diligence-reform/overview-customer-due-diligence-reform) (checked 2026-09-27)
- [AUSTRAC: Risk insights and indicators of suspicious activity — legal professionals](https://www.austrac.gov.au/industry-and-business/education-and-resources/publications-and-resources/risk-insights-and-indicators-suspicious-activity-legal-professionals) (checked 2026-09-27)
- [Law Institute of Victoria: Ethical obligations in complying with the AML/CTF regime (11 December 2025)](https://www.liv.asn.au/Common/Uploaded%20files/Knowledge-Hub/AML/20251211_AMLCTF_EthicalObligations_InformationSheet_Final.pdf) (checked 2026-09-27)

## Forms and precedents for this task

| Form or precedent | Kind | AI level | Summary |
| --- | --- | --- | --- |
| [Enhanced customer due diligence decision record](https://ailawframework.com/precedents/aml-ctf-the-practice-as-a-reporting-entity/enhanced-cdd-decision-record.md) | Form | Red | Record of why enhanced customer due diligence applies to a client under s 32, the measures the compliance officer requires, and whether the practice will start or continue the designated service. |

Signed-in accounts can read the full text of each one.

## Jurisdiction versions

| Jurisdiction | Level |
| --- | --- |
| [United States](https://ailawframework.com/obligations/aml-ctf-the-practice-as-a-reporting-entity/decide-and-record-enhanced-due-diligence-on-a-higher-risk-client/united-states.md) | Red |

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*