November 2, 2020

1. Politically Exposed Person Search
2. List Of Politically Exposed Persons
3. Cia Pep List

PEPs is an abbreviation for Politically Exposed Persons, a terminology used mostly in anti- money laundering legislation in Europe. It is to a great extent the equivalent of the Senior Foreign Political Figure, as defined by the USA PATRIOT Act.

To put it to an example: a domestic politically exposed person can be an official of a local political party, a head of state corporations, a senior politician or top military official. Thus, the prime minister of The UK will be considered a domestic PEP to the Bank of England. Politically exposed persons (PEPs) are high risk clients according to the international anti-money laundering standards. Search online for PEPs, their close associates and affiliated entities.

A politically exposed person (PEP) as an individual who is or has been entrusted with a prominent public function. Due to their position and influence, PEPs are at higher risk to be involved in money laundering and related predicate offences, including corruption and bribery.

Before you can check if someone is a politically exposed person, you first need to define who qualifies as a PEP. FATF defines PEPs as the following:

• Foreign PEPs includes Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, important political party officials in a foreign country.
• Domestic PEPs like foreign PEPs are individuals who are or have been entrusted domestically with prominent public functions.
• International organization PEPs are persons who are or have been entrusted with a prominent position by an international organization. This may be directors, deputy directors and members of the board or equivalent functions.
• Family members are individuals who are related to a PEP either directly (consanguinity) or through marriage or similar (civil) forms of partnership.
• Close associates are individuals who are closely connected to a PEP, either socially or professionally.

While there is overall agreement to the above, there can be some regional definitions that are worth noting. Regulatory obligations and due diligence recommendations may also vary by jurisdictions. This interactive map from Dow Jones provides an easy way to view how regulations vary by countries.

Compliance should consult with their legal team and/or country Financial Intelligence Unit (FIU) to confirm their obligations around politically exposed persons.

Using Free Lists for PEPs Screening

Compliance teams often ask us if there are free PEP lists and the answer is “Not really”. A few organizations do publish free information but almost all lack coverage necessary to meet country regulations. Here are a few examples:

• CIA World Leaders List – This online directory of Chiefs of State and Cabinet Members of Foreign Governments is updated weekly by this U.S. Federal agency. The spelling of the personal names follows transliteration systems generally agreed upon by U.S. Government agencies, except in the cases in which officials have stated a preference for alternate spellings of their names.
• Rulers.org – This site contains lists of heads of state and heads of government of select countries and territories going back to 1700.
• Central Bank of Uruguay PEP List – The list includes people who hold or have held public functions of importance in Uruguay. It is not updated regularly and the last published list was April 2019.

Politically Exposed Person Search

As you can see from the descriptions, most of these free lists do not include local governments, international organization PEPs, family members or close associates, to name a few. When posed the question about using free PEP lists, the risk data experts at Dow Jones said the following:

Relying on free PEP lists can pose problems for PEP identification and screening in that the lists often do not provide the full name of the individual, names in original script, any identifying information (such as a date of birth), focus on top level roles only and specific countries only and do not update promptly.

Countries themselves can publish two types of PEP lists: a list of politically exposed positions or a list of the names of individuals holding PEP roles. These lists, together with other international and national regulations, have been considered when drawing up the Dow Jones PEP definition.

However, as the Financial Action Task Force (FATF) 2013 recommendations mention, these lists have potential shortcomings as they may not be complete (lacking names, identifiers, relatives), and are quickly outdated. We also find that very few countries publish a list of domestic PEPs.

Based on these observations and our experience, we do not recommend that organizations solely rely on public sources for an effective risk-based approach.

With this in mind, financial institutions should seriously consult with third-party risk data providers to help them screen for PEPs.

Using Third-Party Data for PEP Lists

List Of Politically Exposed Persons

As outlined in our white paper, How to Test for Sanctions Screening Software, when engaging with third-party risk data providers to gain access to their PEPs lists, there are a few things that you should inquire about. Here are some sample questions:

1. What is the geographic reach and jurisdictions covered by the data?
2. Does the data go beyond world leaders?
3. How many PEPs of each type to they have?
4. How do they handle election results?
5. How are impeachments, resignations and deaths tagged?
6. How is information from non-democratic countries collected and updated?
7. How are names from foreign countries stored? Native characters? Transliteration? Translated?
8. How is information validated?
9. How deep does the data go?
10. How often is data updated?
11. How is updated data sent?
12. What information is collected about the PEP?

You will want to speak to a number of providers and compare their data sets to ensure proper coverage for your institution.

Minimum data quality standards required for effective PEP Screening

According to Wolfsberg group, financial institutions should have complete and accurate customer data records and the PEP database used for screening should contain sufficient unique identifying data.

Having good customer records and a PEP database that can be screened using unique identifying data will reduce the number of false positives and the overall burden on compliance teams.

Unique identifying data should include the following:

1. Name (all known names and aliases)
2. Date of Birth, and where this isn’t available, Year of Birth
3. Country of political exposure
4. Gender (where available)
5. Politically exposed role(s), and date(s) or year(s) of appointment
6. Date or year that the PEP left their position (where applicable)
7. Where applicable, if the PEP is deceased.

Advice on screening for PEPs

• Where possible, use native character searching. Searching for names in their native language greatly reduces false positives by limiting transliteration issues.
• Use geography to help determine risks—not all countries pose the same risk. Lower risk countries present the opportunity to reduce the amount of time spent reviewing close associates and relatives.
• Reduce the number of hits you receive by using date of birth and age to refine your search.
• Utilizing a defined set of risk factors, build a PEP risk-scoring model that works for your organization. For each risk category, weight the risk factors and then build a defensible risk-scoring process.
• Consider changing screening levels by risk levels. For low-risk PEPs, consider screening and monitoring for sanctions only; for medium-risk, PEPs, screening and monitoring for sanctions and regulatory actions only; and for high-risk PEPs, screening and monitoring against an entire database.

How long is a PEP considered a PEP?

When looking to see if you need to screen someone for being a PEP, when and for how long they were if office is a consideration.

According to the Wolfsberg Group, there is no agreed method for determining the time period that an individual should be regarded as a PEP after they have left the public function.

They go on to says that,

Cia Pep List

• The risk associated with a PEP is closely related to the political situation and the inherent corruption risk in their country, the office or function they held and the influence associated with that post.
• Influence may substantially reduce as soon as they have left office, but a PEP may have been in a position to acquire their wealth illicitly. For this reason, a high level of scrutiny may be warranted even after they have left office.

The Wolfsberg Group does not subscribe to the “once a PEP, always a PEP” as it is not consistent with a risk-based approach. When considering when a PEP should be de-classified, the group suggests that you should consider the following:

• The level of inherent corruption risk in their country of political exposure
• The position held and its susceptibility to corruption or misappropriation of state funds or assets
• Length of time in office and likelihood of return to office in future
• The level of transparency about the source of wealth and origin of funds, in particular those funds generated as a consequence of office held
• Links to any industries that are high risk for corruption
• The overall plausibility of the stated customer profile and their net worth
• The level of transparency and plausibility of transactions processed through the account
• Whether there is relevant adverse information about the customer widely published in reputable sources
• How politically connected they remain once they have left office

Any declassification of a PEP should be reviewed/approved by senior management and documented. In addition, prior PEP status should be noted, in the event of a suspicious activity reporting.

If you would like to learn more about screening PEPs, contact us. We can recommend a solution that is right for your organization.

A Politically Exposed Person (PEP) is an individual who is identified to be at a higher potential risk of involvement with money laundering, bribery and corruption, either through their work personally or through close association with another whose work makes them a higher risk. This is of particular concern where financial services (and some other industries) exist and warrants extra scrutiny to ensure that security measures are met adequately. The most obvious person to be designated as a PEP is one who has (as the name suggests) an important political position.

People who fall under the category of PEP can include both domestic and foreign Heads of State, government or other political officials, judicial or military officials and senior executives of state owned corporations. Outside of this, important members of international organizations such as senior management or directors also qualify as PEPs, as do family members and close associates of existing PEPs. There are also different classifications of PEPs, from the highest risk (such as Heads of State and government) to the lower risk (such as local mayors or senior officials of international organisations).

To combat the potentially higher chance of fraudulent or illicit activity for people who are classified as PEPs,the Financial Action Task Force (FATF) has created extra measures which are to be put in place when PEPs are dealing with financial services. These come in the form of identifying customers who are PEPs and then undertaking Enhanced Due Diligence (EDD) and enhanced ongoing monitoring.

Despite these measures, the FATF makes it clear in its guidelines that there is no preconception that PEPs are involved with illicit activities, simply that the risk for them is higher, and that they should not be denied services simply by virtue of being on a PEP list.

Should a person’s name match that of a PEP, additional checks will be carried out to determine whether they are a PEP themselves or simply share a name with a PEP, though determining this can be an issue if certain data is not available. Those that are identified as being a PEP will require extra security measures. This could include establishing where their wealth and funding comes from, performing additional checks such as adverse media checks, or asking additional questions about the nature of the business they intend to conduct. Should the person pass these checks, they still have to remain subject to enhanced ongoing monitoring.

Whilst important to combat the higher potential risk of fraud, money laundering, terrorism financing or other illicit activity, these checks can cause delays and extra work for companies as they ensure they remain compliant.

Blockpass aims to remove as much of the burden of KYC and AML as possible and as such, checking PEPs are a part of the services we provide. Through Blockpass’ KYC Connect Mobile App, users can upload information and evidence to provide the required details and there is the possibility for merchants to contact users to request more or further information, perfect for accommodating extra PEP requirements. In addition, Blockpass’s app enables ongoing monitoring in a quick and easy manner – uploading the required information onto one app which allows the user to share it with any service provider that needs it.

The Blockpass platform is fully automated and hosted in the cloud, with no integration or setup fee. Businesses can sign up to the KYC Connect console in a matter of minutes, test out the service, and start conducting identity documents verification, KYC and AML checks. Sign up for FREE at console.blockpass.org.