FOURTH MLD EXPANDS DEFINITION OF PEPS, STATES PEP LISTS ARE NOT TO BE RELIED UPON

If you have not seen the fine print in the recently-released Fourth Money Laundering Directive, when it comes to Politically Exposed Persons, or PEPs, read on, please.

The definition of who is a PEP has been expanded to include:

(1) Members of the governing bodies of political parties.
(2) Directors, Deputy Directors, and members of the Board, or equivalent function, of international organizations.
(3) Domestic PEPs.

Former PEPs must be considered risks for one year after their PEP status ceases, and risk-sensitive measures until that individual poses no further risk.

Furthermore, PEP lists cannot be exclusively relied upon, and compliance officers are responsible for making their own assessment, and determination or finding, as to whether an individual is a PEP, or closely associated with a PEP, so as to be considered a PEP as well.