Why is it important for us to identify politically exposed persons PEPs?

PEP Screening allows PEPs to be detected. The most important reason for the detection of PEPs is that they are defined as high-risk people because they have more opportunities to earn illegal income such as money laundering, terrorism financing, corruption, and bribery.

What is politically exposed in banking?

The PEPs fall under the category of high-risk customers by the financial institutions and thus need additional KYC. According to Financial Action Task Force (FATF), a PEP is: a person who is or has been in the executive, legislative, military, administrative or judicial branch of the government.

Who would be a politically exposed person?

In basic terms, a Politically Exposed Person is someone who, through their prominent position or influence, is more susceptible to being involved in bribery or corruption.

Why are politically exposed persons seen as a major potential issue?

The financial community places a higher risk on PEPs because they may be a greater risk of exposure to corruption or bribery and money laundering by virtue of their position and their influence. …

Who are politically exposed persons in the Philippines?

(W) “Politically Exposed Person” (PEP) – refers to an individual who is or has been entrusted with prominent public position in (a) the Philippines with substantial authority over policy, operations or the use or allocation of government-owned resources; (b) a foreign State; or (c) an international organization.

What is politically exposed person in India?

PEP is a person who is authorised to perform prominent public functions in a country and include governors of state, members of Parliament, military officers, senior government and judicial executives and heads of local bodies such as municipal corporations, among others.

Who is a politically exposed person in India?

What does the term politically exposed person mean?

A PEP is an individual who holds a prominent public position or role in a government body or international organisation, either in Australia or overseas. Immediate family members and/or close associates of these individuals are also considered PEPs.

Which of the following would be examples of politically exposed persons?

Domestic PEPs Examples include heads of state or of government, senior politicians, senior officials in the government, judiciary, or military, senior executives of state owned corporations, and important political party officials.

Who is politically exposed person in India?

Who is not classed as Politically Exposed?

members of the administrative, management or supervisory bodies of state-owned enterprises. members of supreme courts, constitutional courts or other high-level judicial bodies whose decisions are not generally subject to further appeal, except in exceptional circumstances.

How can we prevent money laundering?

Anti-Money Laundering – Controls

1. Criminalization. Many governments, financial institutions, and businesses impose controls to prevent money laundering.
2. Know Your Customers.
3. Record Management and Software Filtering.
4. Holding Period.
5. New Technology.

What is a Politically Exposed Person (PEP)?

The term “politically exposed person” generally includes a current or former senior foreign political figure, their immediate family, and their close associates. Interagency guidance issued in January 2001 offers banks resources that can help them to determine whether an individual is a PEP.269 More specifically:

How should we decide whether an individual is politically exposed?

Subjective judgments need to be made in terms of deciding whether an individual is politically exposed, taking into account their overall risk – which may be influenced by their seniority – and length of time out of office if they were formerly in an eligible PEP position.

Should you know when a customer is politically exposed?

It creates a lot of noise for the institution, “So from the institution’s perspective, they should absolutely want to know when a customer is politically exposed, because that is part of their exam guidelines. I have to know that and how that risk fits into my organization.”

What is a close associate of a politically exposed person?

A “close associate” of a Politically Exposed Persons means a natural person who is closely connected to a Politically Exposed Persons, either socially or professionally.