Politically Exposed Persons

FATF Recommendation 12 prescribes that Financial institutions should be required to take reasonable measures to determine whether a customer or beneficial owner is a domestic PEP or a person who is or has been entrusted with a prominent function by an international organisation.
Also define clearly who qualifies as a PEP, including family members and/or close associates.

This means in addition to the normal due diligence
– perform enhanced due diligence to determine customer or beneficial owner is a PEP;
– Establish procedure for obtaining senior management approval to open accounts of PEPs
– reasonable measures to establish source of wealth and source of funds,
– conduct enhanced ongoing monitoring of the business relationship

Regarding insurance policy:
Financial institutions should take reasonable measures to determine whether the beneficiaries of a life insurance policy and/or, where required, the beneficial owner of the
beneficiary are politically exposed persons. This should occur at the latest at the time of the payout.

For general discussion of FATF Recommendation on CDD

Cross reference with developments in Anti Corruption Measures and Compliance