Understanding PEP matches

Finding that a client is a Politically Exposed Person (PEP) does not mean you cannot do business with them. It means you must apply Enhanced Customer Due Diligence (ECDD) if they are a foreign PEP, or if they are a domestic or international organisation PEP whose ML/TF risk is high.

What constitutes a PEP?

A PEP is an individual who is or has been entrusted with a prominent public function. This includes heads of state, senior politicians, senior government officials, judicial or military officials, senior executives of state-owned corporations, and important political party officials.

Steps to take:

• Obtain Senior Management Approval: Before establishing or continuing a business relationship with a foreign PEP (or a high-risk domestic or international organisation PEP), ensure you have approval from a senior manager.
• Establish Source of Wealth: Take reasonable measures to establish the source of wealth and source of funds of customers and beneficial owners identified as foreign PEPs or high-risk domestic or international organisation PEPs.
• Enhanced Ongoing Monitoring: Conduct enhanced ongoing monitoring on that relationship.