PEP: POLITICALL EXPOSED PERSON

Any one entrusted with a public office and those who are closely associated
to them can be considered as PEP.
KEY FEATURES:
Heads of supranational bodies (e.:, UN, IMF, The World Bank), members
of parliament, senior members of the diplomatic corps, members of
boards of central banks may also be considered to fall within the PEP
An immediate family member of an individual entrusted with a
prominent public function (family member)
A known close associate of an individual entrusted with a prominent
public function (close associate)
EXAMPLES:
Military officials, Senior Politicians, Political party officials, Senior
Government Bps 20 or above
LEVELS
International
National
State
Local

DEFINITION
PEPs representing multinational body i.e. European Union
Holding a political position at the national Level i.e. Prime
Minister
Holding a political position at the state or regional level i.e.
Legislative Assembly
Holding a political position at the local Level i.e. City Mayor

REASONS WHY EDD IS APPLIED TO PEPs WHILE OPENING OF

THEIR ACCOUNTS:
EDD:
Enhance Due Diligence is required where the customer and product/service
combination is considered to be a greater risk. This higher level of due diligence
is required to mitigate the increased risk. A high risk situation generally occurs
where there is an increased opportunity from money laundering or terrorist
financing through the service and product you are providing or your customer.
Once PEP has been identified, senior management decides whether to continue
the business relationship, and if so, apply Enhanced Due Diligence (EDD)
measures in line with national legal and regulatory requirements.

IDENTIFICATION TOOLS Some of the processes that can be used to help

identify PEPs include the following:
---- Customer due diligence.
---- Transaction monitoring and ongoing monitoring.
---- Business knowledge.
---- Group compliance.
---- Commercial PEP database
---- Asset and income declaration filing lists.
---- Media and journals.
---- The Internet and search engines.
REASONS:
PEPs can pose a higher money laundering, corruption and reputational risk to
the bank because
Of their position of political power or influence
Of opportunity to engage in corruption, embezzlement and
misappropriation of funds
Of their counter terrorist financing
Of opportunities to abuse their official position or relationships
Of opportunity dealing in rough diamonds