Financial Brokers:  Politically Exposed Person (PEP) Screening

Tue Jun 23 2020

As members are aware a Politically Exposed Person (PEP) is an individual who is or has been entrusted with a prominent public function. Many PEPs hold positions of influence and as a result carry a greater risk, if their influence is abused for the purpose of money laundering, corruption or bribery. In addition to that, any close business associates or family member of these people may also be deemed as being a risk and therefore could also be added to the PEP list. Enhanced due diligence measures that previously applied only to PEPs resident outside of Ireland now also apply to PEPs resident in Ireland. Examples of PEPs are:

  • Senior official of a major political party
  • Senior official in the executive, legislative, administrative, military, or judicial branch of a government
  • Senior executive of a government owned commercial enterprise or corporation.
  • Any individual known to be a personal or professional associate of a PEP
  • An immediate family member of a PEP; e.g. spouse, parents, siblings, children.

Financial brokers should note that new and existing customers may not initially meet the definition of a PEP, but may subsequently become one during the course of a business relationship with the broker.

On this basis, financial brokers have an obligation to undertake regular and on-going screening of their customer base and the customers’ beneficial owners (where relevant), to ensure that they have identified all PEPs. The frequency of PEP screening should be determined by the financial broker in line with their Business Risk Assessment.

We are aware a number of CRM providers offer this service (at discounted rates) and would encourage you to contact your CRM provider or other CRM provider, if necessary, if you are not currently undertaking PEP screening.