Politically Exposed Person (PEP) and Sanction Checking

The FMA (one of the three AML/CFT Supervisors) published their monitoring report in April 2019 and commented on the requirement for Reporting Entities (REs) to undertake PEP and Sanction checks. This requirement would extend to all REs.

Politically exposed persons and sanction checking

REs must ensure they perform PEP checks when on- boarding new customers, and thereafter from time to time on an ongoing basis depending on the level of ML/TF risk – with high risk customers being checked more frequently. We have noted REs do PEP checks at on-boarding, but no further PEP checks are performed. In some instances REs don’t have appropriate systems to perform PEP checks.

REs must also ensure that sanction checks are performed and that this process is clearly described in policies, procedures and controls. We have noted instances where REs don’t do sanction checks (e.g. UN country and individual lists) and don’t include this in their policies, procedures and controls. (via FMA)