Why is PEP filtering such a challenge?
PEPs are common names with no consistent definition. Identifying Politically Exposed Persons can be a difficult undertaking, particularly, if the customer fails to provide important information or even gives false information. Despite all the banks’ efforts at recognizing Politically Exposed Persons, it is a fact that they do not have the necessary powers, means nor information at their disposal to detect such persons. Banks are restricted in what information they can obtain. They must rely on the information they are given by clients and that can be gleaned from business documents or from the media. In particular, when close associates or families of a Politically Exposed Person open a business relationship with a bank it is often impossible to establish that relationship a “PEP relationship” on the basis of the limited information available to the banks. The following prompts might – in addition to the standardized KYC procedures – be appropriate to recognize a Politically Exposed Pe
