Politically exposed person

Politically exposed person

Politically exposed person or PEP is a term that describes a person who may be or recently acted in the political arena of a country or has held a position in the recent past. Such an individual must be tracked by financial institutions as they pose "potential" reputational risk to regulated entities. Heavy fines have been imposed on financial institutions such as Riggs Bank for conducting business with PEPs without following adequate Know Your Customer procedures and enhanced due diligence processes. PEP-specific compliance legislation underlines the link between corrupt politicians, money laundering and the financing of terrorism. Since September 11, 2001 more than 100 countries have changed their laws related to financial services regulation, with the fight against political corruption playing a foundational role.

The definition of a PEP is commonly based on the Financial Action Task Force (FATF) definition:

*current or former senior official in the executive, legislative, administrative, military, or judicial branch of a foreign government (elected or not)
*a senior official of a major foreign political party
*a senior executive of a foreign government owned commercial enterprise, being a corporation, business or other entity formed by or for the benefit of any such individual
*an immediate family member of such individual; meaning spouse, parents, siblings, children, and spouse's parents or siblings
*any individual publicly known (or actually known by the relevant financial institution) to be a close personal or professional associate.

Politically exposed foreign person

Canadian PEP legislation, most notably Bill C-25, includes much reference to "Politically Exposed Foreign Persons". Bill C-25 is the latest amendment to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. This Canadian term shows a large degree of overalap with the politically exposed person (PEP) definition used in most other countries in the world, and is also comparable to the "senior foreign political figure as outlined in the USA PATRIOT Act.

Bill C-25's PEPF definition follows below:

"Politically exposed foreign person - means a person who holds or has held one of the following offices or positions in or onbehalf of a foreign state:
(a) head of state or head of government;
(b) member of the executive council of government ormember of a legislature;
(c) deputy minister or equivalent rank;
(d) ambassador or attaché or counsellor of anambassador;
(e) military officer with a rank of general or above;
(f) president of a state-owned company or astate-owned bank;
(g) head of a government agency;
(h) judge;
(i) leader or president of a political party representedin a legislature; or
(j) holder of any prescribed office or position.It includes any prescribed family member of such a person"

The PEP and PEFP definitions are to be used, in conjunction with the risk-based approach to due diligence, to screen all new and existing account names and transactions for money laundering and terrorist financing risk.

Sources

*http://www.fatf-gafi.org/pages/0,2987,en_32250379_32235720_1_1_1_1_1,00.html
*http://www.wolfsberg-principles.com/faq-persons.html
*http://www.worldcompliance.com/PEPs.htm
*http://www2.parl.gc.ca/content/hoc/Bills/391/Government/C-25/C-25_1/C-25_1.PDF


Wikimedia Foundation. 2010.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • PEP — may refer to: In computing: Packetized Ensemble Protocol, used by Telebit modems PEP tool, a programming environment based on Petri nets Personal Eventing Protocol, a protocol using the XMPP publish subscribe protocol to broadcast state change… …   Wikipedia

  • Anti-money laundering — (AML) is a term mainly used in the financial and legal industries to describe the legal controls that require financial institutions and other regulated entities to prevent or report money laundering activities. Anti money laundering guidelines… …   Wikipedia

  • Foreign Corrupt Practices Act — The Foreign Corrupt Practices Act of 1977 (15 U.S.C. §§ 78dd 1, et seq.) is a United States federal law known primarily for two of its main provisions, one that addresses accounting transparency requirements under the Securities Exchange Act of… …   Wikipedia

  • Money laundering — is the process of disguising illegal sources of money so that it looks like it came from legal sources.[1] The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote… …   Wikipedia

  • Terrorist financing — is a topic that shot into the limelight after the events of September 11, 2001. The US passed the USA PATRIOT Act, among other reasons, to ensure that both combating the financing of terrorism (CFT) and anti money laundering (AML) was given… …   Wikipedia

  • Pep — steht als Abkürzung für folgende deutsche Begriffe: Perlacher Einkaufs Passagen Personaleinsatzplanung, die rationelle Zuordnung von Mitarbeitern zu Positionen Pflege und Entwicklungsplan, ein Instrument des Naturschutzes Phosphoenolpyruvat, ein… …   Deutsch Wikipedia

  • Corruption of Foreign Public Officials Act — The Corruption of Foreign Public Officials Act (CFPOA) is a corruption law in force in Canada. It was passed in 1999, ratifying the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and is… …   Wikipedia

  • PEP — steht als Abkürzung für folgende deutsche Begriffe: Perlacher Einkaufs Passagen Personaleinsatzplanung, die rationelle Zuordnung von Mitarbeitern zu Positionen Pflege und Entwicklungsplan, ein Instrument des Naturschutzes Phosphoenolpyruvat, ein… …   Deutsch Wikipedia

  • Politisch exponierte Persönlichkeit — Dieser Artikel oder Abschnitt ist nicht hinreichend mit Belegen (Literatur, Webseiten oder Einzelnachweisen) versehen. Die fraglichen Angaben werden daher möglicherweise demnächst gelöscht. Hilf Wikipedia, indem du die Angaben recherchierst und… …   Deutsch Wikipedia

  • Know your customer — (KYC) is the due diligence and bank regulation that financial institutions and other regulated companies must perform to identify their clients and ascertain relevant information pertinent to doing financial business with them. In the USA, KYC is …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”