Global PEP List – Politically Exposed Persons

The Global PEP list includes profiles of Politically Exposed Persons, as well as those of their family members and close associates.

Politically Exposed Persons (PEPs) are considered high risk in today's regulatory environment. Regulation requires enhanced due diligence when conducting business with Politically Exposed Persons, particularly when they become part of private banking transactions. Heavy fines have been imposed on financial institutions that have conducted business with PEPs without following adequate Know Your Customer procedures and enhanced due diligence processes. Since September 11, 2001, more than 100 countries have tightened their Anti Money Laundering laws, making the fight against corruption a central element of their new legislation. In addition, there has been greater emphasis on cooperation between nations to enforce the Foreign Corrupt Practices Act.

This raises two questions:

1. What is a Politically Exposed Person?
2. What are the expectations for an organization that deals with Politically Exposed Persons?

While there is no global definition of a PEP, the Financial Action Task Force (FATF) has issued guidelines. Local legislation, like the USA Patriot Act or the European Union Directive, uses similar definitions of a Politically Exposed Person, typically consisting of the following five layers:

1. Current or former senior official in the executive, legislative, administrative, military, or judicial branch of a foreign government (elected or not)
2. A senior official of a major foreign political party
3. A senior executive of a foreign government owned commercial enterprise, and/or being a corporation, business or other entity formed by or for the benefit of any such individual
4. An immediate family member of such individual; meaning spouse, parents, siblings, children, and spouse's parents or siblings
5. Any individual publicly known (or actually known by the relevant financial institution) to be a close personal or professional associate.

The interpretation of each of these layers varies between countries. Some jurisdictions focus only on Foreign Political Figures. Some countries limit the definition to the national level; while others also include regional Politically Exposed Persons. While there might be slight variations of the five layers above, the expectations for an organization doing business with Politically Exposed Persons are universally similar.

The following two-step process is an international standard.

1. Identify the PEPs amongst your clientele
2. Make sure that funds managed by your organization on behalf of the Politically Exposed Person do not derive from a corrupt source

This two-step process requires that organizations use an innovative approach to identify the PEPs amongst their clients. An ideal global PEP database must cover more than 240 countries, handles multiple languages, and is maintained continuously; consequently, it contains a large volume of data. WorldCompliance has built such a database, including more than 900,000 profiles of Politically Exposed Persons, family members and close associates; this data is also updated on a real time basis. Our research centers, on four continents are dedicated solely to finding information, allowing WorldCompliance to upload an average over 25,000 new profiles and 5,000 updated profiles per month.

Global Foreign Official List (module)

The Anti-Bribery Provision of the Foreign Corrupt Practices Act generally prohibits any individual or company from corruptly paying or offering to pay, directly or indirectly, money or anything of value to a Foreign Official to obtain or retain business. To allow our clients to easily identify Foreign Officials within their third party networks, we have added State Owned Companies and Foreign Officials to our database.

UK Bribery List (module)

The Acts defines four new criminal offenses:

• Offering or paying a bribe
• Requesting or receiving a bribe
• Bribing a foreign public official. (A specific, separate offense required to comply with the OECD Convention)
• A corporate offense of failing to prevent bribery being undertaken on its behalf
The legislation applies to all companies, partnerships and individuals based in England, Scotland, Wales and Northern Ireland; as well as foreign companies and individuals doing business in the UK. It has a global reach, applying to acts or omissions taking place anywhere in the world. To allow our clients to easily identify Foreign Officials (FOs) amongst their third party networks, foreign officials and state-owned companies are included in the WorldCompliance database.