Politically Exposed Persons

politically exposed persons risk assessment

Addressing the Perils of Politically Exposed Persons (PEPs)

Developing risk-based processes to identify PEPs among your customers and establish internal controls to fulfill your ethical duties

We help you do your part in thwarting financial crimes perpetrated by PEPs.

Having Politically Exposed Persons (PEPs) among your customer base adds an extra layer of risk that you’re responsible for controlling.

No financial institution is immune, and even small, rural banks can provide a platform for those looking to conduct illicit financial transactions.

Our team helps you institute a risk-based approach to addressing PEP-related challenges. That includes developing risk profiles of your customers and verifying and screening PEPs by reviewing your automated monitoring software models. We also measure the effectiveness of our testing and evaluate your bank’s procedures for escalating potential matches.

If you have PEP customers, we assess the level of risk they – and their family members and associates – bring.

Our process entails evaluating prospective PEPs’ position – their prominence, official responsibilities, and access to government assets, for instance – looking at the products and services they use, and the volume and nature of their transactions.

The enhanced due diligence that we recommend ensures that your bank isn’t inadvertently aiding someone in carrying out financial crime – bribery, blackmail, money laundering, or something else.

We provide insight on ways to identify potential PEPs during customer onboarding and advise you on the ongoing reviews and routine monitoring that should be in place – periodic reviews of PEP’s accounts, for example – to help you detect unusual activity that may expose the bank to unnecessary risk.

In addition, we evaluate what the examiners evaluate, ensuring that your PEP-related internal controls are appropriate and effective, will satisfy examiners, and uphold your ethical obligations.

TCA designs A Better Way for you to create best practices to address your PEP-related obligations and prevent your bank from being used for illicit financial activity.

Key deliverables include:

  • Developing an efficient way to review and monitor PEP screening alerts
  • Advising on customer onboarding methods that will help you know your customers and identify potential PEPs
  • Helping you do your part in identifying and preventing financial crimes perpetrated by PEPs
  • Creating and updating case files on likely PEPs to document relevant information for any future investigations


Politically Exposed Persons

changes ahead signs

FinCEN Issues Final Rule for Beneficial Ownership Reporting

By | October 7, 2022

On September 29, 2022, FinCEN issued a final rule for Beneficial Ownership Reporting to support law enforcement efforts. The rule establishes timeframes for legal entities to report beneficial ownership information FinCEN as required by the Corporate Transparency Act (CTA). According to the publication, FinCEN will have rulemakings to: Establish rules for who may access the …

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blue card

How do I complete Part II (Amounts and Dates) on a continuing activity suspicious activity report (SAR) if the transaction took place on a single date? Do I include the investigation range from the previous filing?

By | December 15, 2021

Answer: The date field in Part II should only cover the date range of activity determined to be suspicious, not the investigation range. If transaction occurred on a single date, the “To” field is left blank. Describe the time period of the investigation in the narrative.


When dispositioning alerts from our automated BSA/AML monitoring system, how much information is enough?

By | December 3, 2021

Answer: TCA continues to see examiner scrutiny on alert resolution. When documenting a response to an alert, it does not need to be as in-depth as an investigation narrative; however, it must explain the who, what, where, when, why, and how. This creates continuity for other BSA staff, examiners, and auditors to understand how you …

When dispositioning alerts from our automated BSA/AML monitoring system, how much information is enough? Read More »

New Hemp-related Business Guidance

By | July 7, 2020

On June 29, 2020, FinCEN published FIN-2020-G001 providing guidance for obtaining due diligence information for hemp-related businesses. The BSA industry has wrestled with cannabis and its derivative rules since FinCEN’s initial 2014 guidance for banking marijuana-related businesses. Between 2014 and 2018, hemp was equated with marijuana since both are derived from the same plant. However, …

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fraud being stopped

FinCEN Guidance on Medical Scams and COVID-19

By | June 11, 2020

As we continue to adjust with the evolving pandemic, FinCEN published two documents to keep awareness high. The May 18, 2020 Notice provides a current update to meet the various BSA reporting, recordkeeping and monitoring requirements.  Here are a few of the key points: BSA Reporting Requirements – As noted in TCA’s earlier article BSA …

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Preparing a Bank Secrecy Act Risk Assessment

By , | May 19, 2020

Welcome to TCA’s BSA Back to Basics article series! Each month, our BSA experts will explore a section of the FFIEC BSA/AML Exam Manual, analyze the regulatory requirements, and offer insights to common findings in exams and audits. We will share best practices to help your BSA program continue to evolve. The first section of …

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