Summary


A Politically Exposed Person (PEP) is a person who is or has been (in the last 12 months) in a prominent public function. A For example, a head of state, senior politician, or an official with a public profile.


First AML conduct PEP checks through our third party service provider on all individuals verified via the First AML Platform. Our service provider generate a report for any individuals whose details match those of a PEP or a relative/close associate (RCA) of a PEP; these reports are accessible via the First AML platform.


This article will outline how PEP checks are surfaced in the platform, what the results mean, and how to further review any matches or possible matches.




TABLE OF CONTENTS


Summary



Why are PEP Checks required?


Under anti-money laundering regulations, the main aim of applying additional scrutiny to work involving PEPs is to mitigate the risk that the proceeds of bribery and corruption may be laundered, or assets otherwise stripped from their country of origin.


Reporting entities must, as soon as practicable after establishing a business relationship (or occasional activity), take reasonable steps to determine if a customer or beneficial owner is a PEP. If they determine their customer or beneficial owner is a PEP, there are additional measures that need to be applied.


Results


First AML conducts PEP checks on all individuals verified via the First AML Platform. These checks are surfaced in the individual profile to be presented with one of the following results:


  • Match (Red Flag) = Positive PEP match identified
  • Possible Match (Orange Flag) = Match identified, First AML have been unable to determine whether the match is positive or negative
  • No Match (Green Flag) = No positive PEP match identified



What is a Match?



A PEP Match means that this individual is confirmed as a politically exposed person.



What is a Possible Match?



A Possible PEP Match means that some of the individual's details (e.g. name, date of birth, citizenship, residency etc.) match with an individual who is politically exposed, however, we have been unable to determine a positive match. The possible match flag is to show that some details have matched however there appear to be discrepancies in information, spelling, location, and/or not enough information.



What is No Match?



No Match means that the individual’s details do not match with any politically exposed person.



How to determine whether a possible match is true or false



When an individual is flagged as a possible PEP match, the next step is for your team to further investigate to determine whether the match is true or false.


Locating the Comply Advantage Report


To locate the information generated by Comply Advantage, follow the below steps:


  1. Navigate to the relevant case within the First AML Platform

  2. Click on the name of the relevant individual (with an orange or red flag)

  3. Click on the “Verifications” tab

  4. Scroll down to “Screening”

  5. Click the red “Match” text within the screening table



This will prompt a new tab to open containing all potential matches for the individual and the reasons for the match.



Selecting More Details for a potential match will display the sources of their match and any additional information.




Reviewing the Match


To review the match you will need to open the comply advantage report and determine which details match those of your clients. For example:


1. Name: Does their first, middle, last name, match? Is the spelling the same? Is this a common name?

2. DOB: Does their date of birth match?

3. Associated Country/Citizenship: Does their country/citizenship match?

4. Photo: If there is an image of the PEP, does it match your client?


If you cannot determine whether a match is true or false from these details, additional google searching of the PEP is recommended, and you may choose to address this directly with the individual to assist.


Determining the next step


Match


For individuals who have been flagged by First AML as a positive PEP match or a possible PEP match which is then determined by you to be a positive match, you will need to decide on the next step in accordance with your Compliance Programme and guidance from the regulators.


If you determine that EDD is required, please leave a note in the Compliance Notes section of the case requesting this. Leaving a note will automatically notify the First AML Specialist assigned to the case.


United Kingdom


Under the MLR2017, enhanced due diligence is required for all positive PEPs (within 12 months). If First AML discover one of your customers is a PEP, we will alert you immediately.



New Zealand & Australia


Please note that under Anti-Money Laundering legislation in New Zealand & Australia, enhanced due diligence is required for any foreign PEPs.  If First AML discover one of your customers is a foreign PEP, we will alert you immediately.


Enhanced due diligence is not legislated for domestic PEPs, but dependent on the information uncovered by the check and the context of your relationship with your customer, you may still choose to conduct it.



Possible Match - False


For individuals who have been flagged as a possible match and determined by you to be a negative match, make a note of this within the Compliance Notes section of the case.