UK: POLITICALLY EXPOSED PERSON (PEP) REGIME

On 2 December, the House of Commons Library published a Research Paper saying that UK law requires “gatekeepers” to the financial system to perform enhanced checks on PEP, their families and their known close associates.  Such firms need to have measures in place to identify PEP, assess the level of risk they pose, and manage the relationship appropriately.  Criminal and regulatory sanctions are available for non-compliance.  Criticism of the regime, including by British MPs, has focused on 2 points:

  1. firstly, on the relatively recent requirement to treat domestic and foreign PEP alike, even for domestic PEP without formal executive power; and
  2. secondly, on perceived overly-cautious approaches taken by some risk-averse firms, which it has been argued resulted in disproportionate due diligence measures taken against PEP, their families or their close associates.

FCA guidance published in July 2017 sought in part to address these issues, and in December 2018 FATF rated the UK “compliant” with its main recommendation on PEP, noting that “all criteria are met”.

https://commonslibrary.parliament.uk/research-briefings/cbp-7376/

I had omitted the following link (as it did not seem to generate much interest!), but it seemed time to add it again and say that, if you would like to make a (polite) gesture and help me with my removal and computer costs, I have a page at https://www.buymeacoffee.com/KoIvM842y

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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