Wolfsberg Group Issues Revised "Frequently Asked Questions" on Politically Exposed Persons
The Wolfsberg Group has recently issued an updated set of Frequently Asked Questions (FAQs) on Politically Exposed Persons ("PEPs") (see www.wolfsberg-principles.com).
Continued regulatory focus on the risks associated with PEPs contributed to the Wolfsberg Group's decision to update its original FAQs, issued in 2003. These revised FAQs reinforce the position that only individuals holding senior, prominent or important positions with substantial authority over policy, operations or the use or allocation of government-owned resources can be PEPs (and that "Close Associates" and "Close Family" of PEPs should be included in the control framework for PEPs).
In addressing practical issues that commonly confront financial institutions the FAQs take account of the now widely accepted Risk Based Approach, including guidance on:
- Assessing whether an individual is a PEP – considering that there is no universally agreed definition
- Managing PEP relationships other than in a private banking context
- Dealing with PEP involvement in operating companies and state owned enterprises
- Managing individuals and related entities once the reason for their PEP designation is no longer applicable.
As with the Wolfsberg Group's more recent documents, the revised PEP FAQs were formulated giving due regard to standards issued by relevant bodies including the Financial Action Task Force (FATF).
The publication of these revised FAQs is part of an on-going commitment by the Wolfsberg Group to provide guidance that continues to be relevant, appropriate and designed to help financial institutions meet their on-going regulatory obligations.
Members of the Wolfsberg Group are Banco Santander, Bank of Tokyo–Mitsubishi UFJ, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Société Générale and UBS.