What is the process when receiving a potential PEP result?

When you receive a potential PEP result as part of an AML check you need to resolve this result.

This is done by determining whether any of the potential PEPs listed as potential matches are the same person who you are currently performing due diligence on.

Review the PEP results

Within the AML report you will see towards the top of the report all the potential PEPs listed.

The listing would typically contain the name, address and position of the individual that may be a potential match. In most cases the information provided would be enough to dismiss the match which could be based on the full name, address, position or a combination of these values.

Occasionally a potential match would be harder to rule out based on the information provided within the AML report itself.

In this scenario, we would suggest that you:

• Attempt to find the politically exposed person listed online through a Google search. Normally these individuals would have public profiles due to the nature of their roles or the relationships they have to politically exposed individuals.
• Once identified online, it should be easier to either confirm or dismiss that your client or prospect matches the politically exposed person identified.

You can now go ahead and record your findings within the review section of the AML check within Xama. To do so you should use the Review AML link.

If you click on this link you will be presented with a dropdown on which you can select to either dismiss or confirm a match. We also suggest that you record any notes about any additional investigations you have performed at this stage.

If the match is dismissed then there is no further action you need to take in regards to the person being politically exposed.

If you however confirm the match to be a person that has political exposure, you should carry out further due diligence. This may include:

• Evaluating the political position and the level of risk this might present. For example, a local councilor may not pose much of a money laundering risk whilst those with more influence, such a member of parliament or high court judge, would pose a higher risk. 
• Depending on the level of risk identified you should consider further (enhanced) due diligence. This may include more robust verification of identity, such as insisting on meeting the person face to face, more comprehensive source of funds and wealth checks and implementing controls to mitigate risk.
• You should record any notes of enhanced due diligence that you have carried out on your client risk assessment and also update your firm wide risk assessment to address any risk associated with politically exposed persons.

For more information about PEPs and how to evaluate the level of a particular PEP, this article by our partners at ComplyAdvantage is a very good additional resource to use.