PEP screening, or politically exposed person screening, is a necessity for financial institutions and banks. Careful screening helps these institutions see what level of risk a person might have for financial corruption and crime. But who exactly is eligible for PEP screening? Read on to learn more.
What is a PEP
politically exposed person is traditionally defined as someone with a
political role or who has been entrusted with public functions. Because
of this position, they’re at higher risk for money laundering, terrorism
funding, and other financial crimes. It doesn’t mean that they’ll
commit them, just that their role enables them to do this more easily or
they have more potential to be exposed to the opportunity to commit
these types of crimes. For more information on politically exposed
person screening, visit this website.
Who is Eligible for Politically Exposed Person Screening?
Just saying someone who is in a political role or entrusted with a public function is a pretty loose definition. To find out if someone should go through politically exposed person screening, further risk assessment is required. Here are the most common categories for PEPs:
Current and former government officials, of both domestic and foreign governments, would be considered PEPs. This is the case whether they’re elected or unelected positions.
Political Party Officials
Officials who have roles in major domestic or foreign political parties can be classified as PEPs.
Executives of government-owned commercial enterprises or international corporations could be considered PEPs.
Relatives and Publicly Known Close Associates
Immediate family members and publicly known associates of any of the above categories could be considered PEPs.
Make Sure Your Business is Compliant
If you’re a bank or financial institution, then it’s essential to stay on top of PEP legislation and find out what you need to do to stay compliant. Whether that’s using the latest politically exposed person screening software or making sure to train your employees on all the procedures of PEP, it’s important to mitigate risk for your institution so that things can’t fall back on you and so that customers who are PEPs can’t engage in illicit financial activity.
Read a similar article about AML watchlist screening here at this page.