Wolfsberg Group updates guidance on politically exposed persons

May 23, 2017

The Wolfsberg Group has published updated guidance aimed at helping financial institutions handle the money laundering risks posed by politically exposed persons (PEPs). The updated version replaces the original guidance published in 2003, as well as the 2008 frequently asked questions.

The new guidance sets out the method the Wolfsberg Group considers to be the most effective for managing PEP risk, namely making the PEP control framework part of the risk based approach for indentifying and managing financial crime risk, and thereby ensuring it can form part of a holistic customer risk assessment process. It also provides advice on how financial institutions can use a more tailored and risk based control framework for customers who may be politically exposed.
It includes guidance on, amongst other things:
• defining PEPs as well as 'close family members' and 'close associates' of PEPs;
• identifying PEPs, including PEP screening;
• treatment of PEPs in control of organisations, state-owned entities or public sector bodies;
• key components of PEP risk management frameworks; and
• declassification of PEPs.

For more information, check the Wolfsberg Guidance on Politically Exposes Persons (PEPs) and its Public Statement, both available at Wolfsberg Group website.