Under the Money Laundering and Terrorist Financing Prevention Act (Wwft), it is important to check whether a client is a Politically Exposed Person (PEP) because PEPs may pose a greater risk of money laundering and terrorist financing than other clients.
Measures around PEP
A PEP is someone who holds or has held public office or someone who holds an important position within a company or organization. This could include a politician or director of a state-owned company or a high-ranking official of an international organization. PEPs often have access to large amounts of money and can use it to launder money or fund terrorist activities.
When you learn that a client is a PEP, you must take additional measures to reduce any risks. This may include, for example, gathering more information about the client and his or her transactions, or performing additional checks. This helps detect and prevent any illegality quickly.
In addition, it is also mandatory to make a PEP report to the FIU (Financial Intelligence Unit) if a business relationship is established with a PEP or a suspicious transaction occurs.