Politically Exposed Persons: Preventive Measures for the Banking Sector
Methodology for FATF Recommendation 675 The essential criteria and additional elements listed below should be read in conjunction with the text of Recommendation 6 and its Interpretative Note.
Essential criteria 6.1 Financial institutions should be required, in addition to performing the CDD measures required under R.5, to put in place appropriate risk management systems to determine whether a potential customer, a customer or the beneficial owner is a politically exposed person. Examples of measures that could form part of such a risk management system include seeking relevant information from the customer, referring to publicly available information, or having access to commercial electronic databases of PEPs.
6.2 Financial institutions should be required to obtain senior management approval for establishing business relationships with a PEP. 6.2.1 Where a customer has been accepted and the customer or beneficial owner is subsequently found to be, or subsequently becomes a PEP, financial institutions should be required to obtain senior management approval to continue the business relationship. 6.3 Financial institutions should be required to take reasonable measures to establish the source of wealth and the source of funds of customers and beneficial owners identified as PEPs. 6.4 Where financial institutions are in a business relationship with a PEP, they should be required to conduct enhanced ongoing monitoring of that relationship.
Additional elements 6.5 Are the requirements of R.6 extended to PEPs who hold prominent public functions domestically? 6.6 Has the 2003 United Nations Convention against Corruption been signed, ratified, and fully implemented?
75. FATF Anti-Money Laundering and Combating Terrorist Financing Methodology 2004 (updated June 2009).
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