Guidance on Politically Exposed Persons and corruption
45. Individuals who have, or have had, a high political profile, or hold, or have held, public office, can pose a higher money laundering risk to a Relevant Person as their position may make them vulnerable to corruption. This risk also extends to members of their families and to known close associates. PEP status itself does not, of course, incriminate individuals or entities. It does, however, put the Customer into a higher risk category.
46. Generally, a foreign PEP presents a higher risk of money laundering because there is a greater risk that such Person, if he were committing money laundering, would attempt to place his money offshore where he is less likely to be recognised as a PEP and where it would be more difficult for law enforcement agencies in his home jurisdiction to confiscate or freeze his criminal property.
47. Due diligence to uncover information about PEPs can be time consuming and difficult, requiring close fact checking of the names, dates of birth, photographs and identification numbers of individuals against reputable PEP lists. However, despite the development of such lists by certain vendors, as well as the United Nations' compilation of a list of heads of states which fall within the FATF definition of PEPs, there is no "official" centralised global PEP list. It is therefore left to each Relevant Person to determine whether they would like to internally develop their own database or list of PEPs as a due diligence tool.
48. Where a Customer relationship is maintained with a PEP, detailed monitoring and due diligence procedures should include:
a. analysis of any complex structures, for example involving trusts or multiple jurisdictions;
b. appropriate measures to establish the Source of Wealth;
c. development of a profile of expected activity for the business relationship in order to provide a basis for Transaction and account monitoring;
d. initial screening and due diligence prior to the account opening;
e. Senior Management approval for the account opening;
f. regular oversight of the relationship with a PEP by Senior Management; and
g. ongoing and periodical screening of accounts opened by PEPs.
49. A Relevant Person is advised that Customer relationships with family members or close associates of PEPs involve similar risks to those with PEPs themselves.
50. Corruption-related money laundering risk increases when a Relevant Person deals with a PEP. Corruption may involve serious crimes and has become the subject of increasing global concern. Corruption offences are predicate crimes under Federal Law No. 4 of 2002.
51. The Regulator considers that after leaving office a PEP may remain a higher risk for money laundering if such Person continues to exert political influence or otherwise pose a risk of corruption.