PEP and Sanctions List Monitoring
Politically Exposed Persons or PEP are high profile individuals who are more prone to be involved in financial crimes such as money laundering and financing terrorism. PEP's include individuals with high political roles such as heads of state and government officials, or those who are entrusted with public functions such as Board Directors of Central Bank, their family members and close associates. Their stature and nature of functions make them accessible to financial dealings which involve an enormous sum of money and as such, these individuals are more exposed to risks of financial crimes.
Politically Exposed Persons are categorized based on their risk exposure, as seen below:
Tier 1 - High Risk PEPs. High risk PEPS include Heads of State or Government, Members of the Government (either national or regional), Members of the Parliament (either national or regional), Heads of the Military, Judiciary, Law Enforcement, and Board of Central Banks.
Tier 2 - Medium Risk PEPs. These are officials of the military, judiciary, and law enforcement agencies, Senior Diplomats, Consuls and Ambassadors, Senior Board Members of Government Owned and Controlled Corporations, and Senior Members of Religious Organizations.
Tier 3 - Low Risk PEPs. Low Risk PEPs include Heads and Members of the Trade Union, Senior officials of international and supranational organizations, Local Government Unit Officials such as Mayors and members of city or district council.
Tier 4 - PEPs by Association. These include family members and close business associates of politically exposed persons. Spouses, parents, children, siblings, spouses' parents and siblings, and business partners are all included in this list.
Sanctioned parties, on the other hand, are individuals or business entities who are subject to sanctions by domestic or global regulating bodies. Simply put, sanctions are penalties imposed on individuals or institutions for failing to comply with laws and regulations. Sanctioned parties are recorded in a public list known as the Sanction List. These lists are issued by global governing bodies such as the United Nations (UN), the United States Office of Foreign Assets Control and State Department, European Union, Interpol and other different domestic and global governing bodies.
Individuals, companies and organizations who are recorded in sanction lists include those involved in the following criminal activities:
- Fraud and Money Laundering
- Terrorism and Terrorist Funding
- Illegal Drug Trafficking
- Human Trafficking
- Weapons Smuggling
Why is it Important to Have Ongoing Monitoring of PEPs and Sanction List? Your business' main objective in having a continuous checking of your clients against sanction lists is to prevent any business deals with the wrong individuals or organizations. If the government has imposed sanctions on an individual or business entity, they are automatically restricted to have any business transactions especially when financial transactions are involved. Tech View offers an efficient way of checking PEPs and Sanction Lists via our Ongoing Business Monitoring portal, a single API system that can track from multiple data sources globally. Streamline your business compliance process from KYC and KYB Onboarding, Continuous AML and PEP checking, Real-time data reporting via email or through our portal, and other useful compliance management functions that will greatly help your business in compliance due diligence.