Guidance on Politically Exposed Persons (PEPs) and corruption
1. Individuals who have, or have had, a high political profile, or hold, or have held, public office, may pose a higher money laundering risk to a Relevant Person as their position may make them prone to corruption. This risk also extends to members of their families and to known close associates. Being a PEP does not, in itself, of course, incriminate individuals or entities.
2. Generally, a foreign PEP presents a higher risk of money laundering because there is a greater risk that such a Person, if he were undertaking money laundering, would attempt to place his money offshore, away from his home jurisdiction, 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 proceeds.
3. A Relevant Person should be aware that customer relationships with family members or close associates of PEPs involve similar risks to those with PEPs themselves.
4. The risk of corruption-related money laundering increases where 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 AML Legislation.
5. The Regulator considers that after leaving office a PEP may remain a higher risk for money laundering if such an individual continues to exert political influence or otherwise poses a risk of being involved in corruption.
6. The fact that an individual is a PEP does not automatically mean that the individual must be assessed to be a high risk customer: however, Enhanced CDD still needs to be undertaken on PEPs. A Relevant Person will need to assess the particular circumstances relating to each PEP to determine what risk category is appropriate.
|Added on (15 April, 2019).|