FCA finalises guidance on treatment of politically exposed persons for anti-money laundering purposes
Published: 25 July 2017
The Financial Conduct Authority (FCA) has finalised guidance on the treatment of politically exposed persons (PEPs) for anti-money laundering purposes and expects that firms take appropriate but proportionate measures in meeting their financial crime obligations.
The MLRs set out that all firms must apply a risk sensitive approach to identifying PEPs and then applying enhanced due diligence measures. The legislation and guidance clarifies that a case by case basis is required with the risk assessed of individual PEPs rather than applying a generic approach to all PEPs.
The guidance does, however, require firms to apply more stringent approaches where the customer is assessed as having a greater risk. In those circumstances firms will need to take further steps to verify information about the customer and the proposed business relationship. This is in line with the FCA’s financial crime guidance to date where the focus has been on managing higher risk PEP relationships. If you have any questions in relation to this, please contact Jennifer Wood.