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

compliance rules signposts

Legislative and Regulatory BSA/AML Changes

By | October 25, 2019

Despite the collective efforts of law enforcement and BSA risk managers across the country, the United States is not doing the best job of finding effective and efficient ways to combat money laundering. Regulatory and legislative efforts, which are the truly meaningful actions that could be taken, are currently being worked on in Washington. A …

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Examiners Stress Independent Audit Critical to BSA Success

By | August 2, 2019

On July 22, 2019, the prudential regulators issued FIL-43-2019 making a joint statement on BSA/AML risk-based approaches in examinations. TCA’s BAT reviewed the statement and took away three key points: transparency, risk assessment and independent audit. Transparency – The statement states: “This statement is intended to improve transparency into the risk-focused approach used for planning …

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Quality Assurance Monitoring for BSA/AML Compliance Programs

By | September 14, 2018

When your institution is examined for compliance with any law or regulation, the measure of your efforts will be based on your ability to self-identify and self-correct any deficiencies. Ongoing monitoring of key processes helps to ensure that any errors or warning flags are identified early. Monitoring is a required element of a compliance management …

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Model Validations—Why Do I Need a GAP Analysis?

By | July 26, 2018

The regulators are upping their game and are becoming more familiar with Automated Monitoring Systems. They are starting to push the boundaries of a model validation and their expectations for a “complete” model testing review. Some examiners are more advanced than others, but the word is being spread and soon they’ll all catch on! This …

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suspicious activity report

Making SAR Narratives Error‐Proof

By , | February 22, 2018

Each SAR field is entered into FinCEN’s searchable database, so law enforcement can pull information or run inquires to aid investigations into financial and other illicit crimes. That’s why SARs are crucial. The law enforcement agencies are your audience and they need to know the whole “story” since they were not actively involved in the …

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malware image

FinCEN Finalizes New SAR

By | February 13, 2018

FinCEN announced updates to the Suspicious Activity Report (SAR) filing format in a notice to e‐filers. The announcement says that the revisions adhere to the changes listed in FinCEN’s February 2, 2017 Federal Register notice and will be live in June 2018. In these new filings, batch submissions will have to be made in an …

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2021 Midwest Road, Suite 200,
Oak Brook, IL 60523

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