Anti-Money Laundering -- Dealing with Politically Exposed Persons

Anti-Money Laundering -- Dealing with Politically Exposed Persons

 by Prof. William H. Byrnes IV and Dr. Robert J. Munro


A Politically Exposed Person (PEP) is a person that has been delegated with a powerful, foreign public position either formerly or currently. Family members and close associates of the person in a political position are also considered to be Politically Exposed Persons. For the purpose of Politically Exposed Persons, family members include: spouse, children, parents of the Politically Exposed Person, in-laws of the Politically Exposed Person, and siblings of the Politically Exposed Person.

The Financial Actions Task Force (hereinafter "FATF") released obligatory requirements for foreign Politically Exposed Persons, the PEPs family members, and the PEPs close associates, in June 2003. The FATF extended the requirements to include not only foreign Politically Exposed Persons but also domestic Politically Exposed Persons and Politically Exposed Persons of international organizations in February 2012.

Financial Crimes Enforcement Network

The Financial Crimes Enforcement Network (hereinafter "FinCEN") was established on April 25, 1990. The Secretary of the Treasury established FinCEN. 31 U.S.C. 310 [an annotated version of this statute is available to subscribers] formed FinCEN as a bureau within the Treasury Department.

FinCENs responsibilities and authorities include the following:

 • Maintaining a government-wide data access service with a range of financial transactions information;
 • Analysis and dissemination of information in support of law enforcement investigatory professionals at the Federal, State, Local, and International levels;
 • Determine emerging trends and methods in money laundering and other financial crimes;
 • Serve as the Financial Intelligence Unit of the United States; and
 • Carry out other delegated regulatory responsibilities.

The Secretary of the Treasury appoints the Director of FinCEN. The Director of FinCEN counsels and makes suggestions in regards to financial intelligence, financial crimes, in addition to other financial happenings. The Director sustains a government wide data access service. The Director also, among other tasks, analyzes the available data, maintains a financial crimes communication center, provides examination /analytical /informational services to law enforcement, and coordinates with other countries financial intelligence agencies.

Treasury Order [180-01] describes FinCEN's responsibilities to implement, administer, and enforce compliance with the authorities contained in what is commonly known as the "Bank Secrecy Act." [footnotes omitted]

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Prof. William H. Byrnes, IV is the Associate Dean of the Walter H. & Dorothy B. Diamond International Tax & Financial Services Graduate Program. He has achieved authoritative prominence with more than 38 book and compendium volumes, 93 book, treatise and supplement chapters, and 800 articles. Professionally, William Byrnes left Coopers and Lybrand as an Associate Director to full time academia wherein he pioneered online legal education in 1995, thereafter creating the first online LL.M. offered by an ABA accredited law school. He trains and supervises more than 200 professional and government LLM and JSD candidates annually for international tax and money laundering compliance.

Dr. Robert J. Munro is Professor of Law at Thomas Jefferson School of Law in San Diego, CA. and a Senior Research Fellow and Director of Research for North America at CIDOEC at Jesus College, Cambridge University. He holds Masters degrees from the University of Iowa and Louisiana State University, a Juris Doctor from the University of Iowa and a Ph.D. from the University of Florida. He has done further graduate studies at Cambridge University, Oxford University and the Institute of Advanced Legal Studies at the University of London. He is the author of thirty-two published books, including the five-volume treatise, Money Laundering, Asset Forfeiture and International Financial Crimes, the three-volume, Cybercrime and Security, the three-volume Tax Havens of the World and Foreign Tax and Trade Briefs.