Global PEP List – Politically Exposed Persons

"Politically Exposed Persons" (PEPs) are considered high risk in today's regulatory environment. Regulation requires enhanced due diligence when conducting business with Politically Exposed Persons, particularly when they become part of Private Banking. Heavy fines have been imposed on financial institutions, that have conducted business with PEPs without following adequate Know Your Customer procedures and enhanced due diligence processes. Since September 11, 2001 more than 100 countries have changed their Anti Money Laundering laws, making the fight against corruption a central element of the new legislation. In addition, there has been greater emphasis and cooperation between nations to enforce the Foreign Corrupt Practices Act.

This raises two questions:

• What is a Politically Exposed Person?
• What are the expectations for an organization that deals with Politically Exposed Persons?

While there is no global definition for a PEP, the Financial Action Task Force (FATF) issued guidelines, in which the term Politically Exposed Person was defined. Local legislations like the USA Patriot Act or the European Union Directive use similar definitions, typically consisting of the following five layers.

• Current or former senior official in the executive, legislative, administrative, military, or judicial branch of a foreign government (elected or not)
• A senior official of a major foreign political party
• A senior executive of a foreign government owned commercial enterprise, being a corporation, business or other entity formed by or for the benefit of any such individual
• An immediate family member of such individual; meaning spouse, parents, siblings, children, and spouse's parents or siblings
• Any individual publicly known (or actually known by the relevant financial institution) to be a close personal or professional associate.

The interpretation of each of these layers varies from country to country. Some jurisdictions focus only on Foreign Political Figures. Some countries limit the definition to the national level, some include regional Politically Exposed Persons. While there might be slight variations of the five layers above, the expectations for an organization doing business with Politically Exposed Person are universally similar.

The following two-step process is international standard.

• Identify the PEPs amongst your clientele
• Make sure that funds managed by your organization on behalf of the Politically Exposed Person do not derive from a corrupt source

This two-step process requires organizations to use an innovative approach to determine the PEPs amongst its clients. A global PEP database covers more than 240 countries, faces different languages, needs to be maintained constantly and consequently contains a lot of data. WorldCompliance has built such a database, containing more than 880,000 profiles of Politically Exposed Persons, their family members and close associates, and maintains this data on a real time basis. Seven research centers on four continents permanently research for content, averaging more than 25,000 new profiles and more than 5,000 updated profiles a month.

As a leading provider for information on PEPs WorldCompliance even offers portrait photographs as a fully integrated feature of the profile.

Global Sanction List (GSL) – Sanctioned Entities:

WorldCompliance aggregates information from the most important sanction lists from around the world and groups them into one category, called Global Sanction List offering closes to 20,000 profiles of individuals and companies of the highest risk rating. Covered lists include, Bank of England, Bureau of Industry and Security, Department of State, EU Terrorism List, FBI Top Ten Most Wanted, Interpol Most Wanted, OCC Shell Bank List, Office of Foreign Assets Control (OFAC) Sanctions and SDN & Blocked Entities, Treasury PML List, SECO List, UN Consolidated List, WorldBank Debarred Parties List, CBI List, ICE List.

Global Enforcement List (GEL) – Enforcement Agencies:

The GEL is comprised of information received from regulatory and governmental authorities, listing the content of warnings and actions against individuals and companies, listing narcotic-traffickers, money launderers, fraudsters, human traffickers, fugitives and other criminals. More than 300 enforcement lists are continuously monitored to provide the most comprehensive protection to clients.

Global Adverse Media List (GAL) – News Media:

Global Adverse Media List is an extensive proprietary database, which is comprised of the results of public domain news, listing money launderers, fraudsters, arms dealers, narcotic traffickers and other criminals. WorldCompliance monitors in excess of 20,000 newspapers and magazines in more than 10 languages for risk relevant information, providing an imClient Forumive protection from risk entities, profiled in the public domain.

Designated Name Filtering System (DNFS) is a software module that enables financial institutions to monitor their clients databases against various watch lists. DNFS uses phonetic algorithms to match names and provides extra information on entities during the matching process (such as: Date of Birth, Mother's Name, Nationality etc...).

DNFS is installed to check new clients VS watch lists and new entries to watch lists VS clients. Users of DNFS can easily search both clients' databases or watch lists for occurrences of requested names. DNFS is fully integrated to World Compliance online, and users of DNFS can connect to World Compliance online, without the hassle of typing in usernames, passwords and even typing in the name to be searched for.

DNFS also works in real time mode with SWIFT messages and through fully manageable configurations, can monitor any type of message and any field in that message.

DNFS contains thorough audit logs for ease of going back to check any search or user function by auditors or managers

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AML Reporter is a software module that enables financial institutions to carry out AML/CFT transaction monitoring. A bullet point of the features of AML Reporter can be listed as follows:

• Profiling of Client Accounts
• Using built in algorithms to predict account future behavior
• Alerts generation and management
• Building, running and maintaining AML/CFT scenarios
• Building, running and maintaining reports
• Comparison to peer groups defined by user
• Export of reports to many formats (XML, Excel, doc, rtf, txt)

And many other features

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Money Laundering Risk Management is a module software that enables financial institutions to implement their ML Risk Policies in a very user friendly application. The money laundering risk management module fully integrates with AML Reporter account profiles, alerts, scenarios and reports.

Some of the features of the ML Risk Management are:

• Define unlimited scales (scales with colors and images)
• Define data sources to be embedded in risk calculation (Client info, Product info and transactional info)
• Define weights between data sources
• Ability to sample risk matrix before publishing it
• Ability to graphically view risk assessments (pie charts, bar charts and line charts)
• History of client risk stored and can be viewed graphically

And many other features