A Politically Exposed Person (PEP) designation holds significant weight in compliance circles, yet businesses can fall foul to non-compliance without the proper tools and processes in place.
Learn how can businesses effectively spot these high-risk individuals and maintain compliance across audit trails with Red Flag Alert.
Being able to identify a PEP without the support of a data provider and analysis tools requires substantial manual efforts from compliance officers. There should be a risk-based and proportionate approach to individual cases, and businesses should look out for the following situations to spot PEPs as soon as possible:
Whilst there is no standard data businesses must use to identify PEPs, the FATF requires businesses to use information that is available to them, such as:
Once a business has identified a PEP, it must follow a series of steps to have an accurate and compliant audit trail, should regulators want to check on their processes.
This often begins with further discussions with senior leadership teams to discern whether the relationship with the PEP is viable. Once this has been agreed, further diligence checks across the source of wealth and funds must be completed.
Following approval enhanced ongoing monitoring protocols throughout the relationship will be put into place to ensure compliance and risk is mitigated effectively. These steps will not only fulfil regulatory compliance requirements but also safeguard the integrity of operations and protect the company from unnecessary reputational damage.
Any businesses operating in regulated industries must implement enhanced due diligence measures for Politically Exposed Persons (PEPs), which entail conducting thorough background checks and reporting any suspicious activity they uncover.
To build a robust PEP compliance program, several strategies can be adopted and improved with Red Flag Alerts standout digital suite of data and tools:
Access Comprehensive PEP Lists
Utilise PEP searches covering global and adverse media lists to ensure the information remains current. Using Red Flag Alert, businesses can easily check these lists in one place, without having to evaluate the number of sources and the frequency of updates.
Customise List Selection
Tailor list coverage to align with the organisation's risk profile and geographic regions. With Red Flag Alert, this step is consolidated into the search tools, allowing for more accurate and direct information that is always actionable and relevant.
Assess PEPs and Associated Risks
Inclusion on a PEP list doesn't necessarily imply criminal activity and deeper due diligence may validate PEP status without undue risk. Red Flag Alert users receive a full picture of an individual and business, so decisions can be made using complete facts.
Implement Ongoing PEP Checks
Given the dynamic nature of PEP lists, ongoing monitoring simplifies the detection of new PEPs or suspicious activities. At Red Flag Alert, we make this process simple and easy, with automatic monitoring and tailorable alerts across portfolios, keeping users up-to-date with relevant changes, and better alignment of teams with shareable updates.
Handle Incorrect or Outdated Information
Errors in PEP lists or documentation can lead to false positives and resource-intensive manual reviews. Choose Red Flag Alert to enjoy regularly cleansed and enriched data and automated processes for more efficient screening and compliance procedures.
Businesses often encounter scenarios where a standard AML check falls short, necessitating a deeper investigation. This could be due to various factors, such as dealing with partners from high-risk countries or simply a precautionary measure.
Red Flag Alert's fully digital platform facilitates seamless compliance while safeguarding your business interests and ensuring minimal disruption to operational workflows or customer experiences.
With features like fully compliant PEPs, sanctions, and adverse media checks coupled with live monitoring, businesses can rest assured of comprehensive risk mitigation.
Moreover, our platform boasts advanced IDV and document verification technology, ensuring a 98% match rate through multi-bureau analysis.
By enabling quick and efficient checks that require less than a minute of staff time, Red Flag Alert streamlines the process of sending, tracking, managing, and storing EDD checks all within one platform, empowering businesses to make informed decisions swiftly and confidently.
Get in touch and access a free trial to discover how Red Flag Alert can provide your business with a comprehensive AML service that is low cost, evolves with regulations and allows you to prove your audit trail.