The Advantage of a Global PEP list

Stringent anti-bribery and anti-corruption regulations hold businesses accountable for investigating and knowing all of the agents, consultants, distributors and vendors with which they conduct business. Using data and proven analytical tools, LexisNexis delivers intelligence information connections you need to make better decisions and help comply with anti-bribery and anti-corruption regulations—all in one place. This robust risk management platform enables the automatic monitoring of business affiliates and flags any adverse actions or relationships that are indicators of risk to your organization.

Regulatory environment considers Politically Exposed Persons (PEPs) to be high risk, especially in private banking transactions. In an effort to increase enforcement on worldwide corruption and bribery, many countries have tightened their anti-money laundering (AML) laws, making anti-corruption a central element of new legislation and placing greater emphasis on cooperation among international agencies.

More adequate Know Your Customer (KYC) procedures and enhanced due diligence processes are required on these individuals, as well as their family members and close associates. Heavy fines have been imposed on institutions that have not adhered to these requirements when conducting business with PEPs.

Institutions are expected to both identify the PEPs amongst their clientele and ensure funds managed on their behalf do not derive from a corrupt source. You must first understand how to classify a PEP to meet this challenge. While there is no global definition of a PEP, the Financial Action Task Force (FATF) has issued guidelines. Local legislations such as the USA PATRIOT Act and the European Union Directive use 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.

While interpretation of these layers does vary by country, the expectations for an organization doing business with Politically Exposed Persons are universally similar.  The need to screen profiles against a Global PEP list is critical. Access to LexisNexis solutions delivers an extensive proprietary database of profiles from over 30,000 news sources worldwide, and from over 1,000 global enforcement lists and court filings such as: the FDA, US HHS, UK FSA, SEC and more.