AML/CFTR 3.2.5 Measures for PEPs

A firm must, as a minimum, adopt the following measures to reduce the risks associated with establishing and maintaining business relationships with PEPs:
(a) the firm must have clear policies, procedures, systems and controls for business relationships with PEPs;
(b) the firm must establish and maintain an appropriate risk management system to decide whether a potential or existing customer, or the beneficial owner of a potential or existing customer, is a PEP;

Examples of measures forming part of a risk management system
1 seeking relevant information from customers
2 referring to publicly available information
3 having access to, and referring to, commercial electronic databases of PEPs
(c) decisions to enter into business relationships with PEPs must only be taken with senior management approval after enhanced CDD has been conducted;
(d) if an existing customer, or the beneficial owner of an existing customer, is subsequently found to be, or to have become, a PEP—the relationship may be continued only with senior management approval;
(e) the firm must take reasonable measures to establish the sources of wealth and funds of customers and beneficial owners identified as PEPs;
(f) PEPs must be subject to enhanced ongoing monitoring.
Derived by QFCRA RM/2019-8 (as from 1st February 2020)
Amended by QFCRA RM/2020-1 (as from 15th August 2020)