Financial Crime World

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Brazil’s Politically Exposed Persons: Can Compliance Professionals Rely on Free Lists?

In today’s challenging compliance landscape, many professionals wonder if they can rely on free lists to identify and screen political exposure persons (PEPs). The answer is a resounding no.

Limitations of Public Domain Lists

Free lists in the public domain that mention PEPs are limited to senior politicians from various countries and a small number of domestic PEPs issued by specific governments. However, relying on these lists can be problematic due to their:

  • Incomplete information
  • Unreliable data
  • Outdated content

Inadequacy of Public Domain Lists

The Financial Action Task Force (FATF) 2013 Recommendations emphasize that public domain lists are not designed for PEP screening. For instance, the U.S. Central Intelligence Agency’s (CIA) online directory of World Leaders and Cabinet Members of Foreign Governments is incomplete, excluding members of national parliaments, senior judicial or military officials, and senior executives of international organizations.

Brazil’s Government-Issued List

Brazil’s government-issued list of over 110,000 PEPs also has its limitations. The list:

  • Is not complete
  • Does not reflect changes in roles in a timely manner
  • Does not include names of relatives or close associates from other countries

What Makes a Good PEP Source?

A reliable PEP source should:

  • Include current and former names from all countries and territories around the world
  • Provide biographical data
  • Reflect changes in roles in a timely manner
  • Be readily available

Commercial Databases: The Key to Effective PEP Screening

Commercial databases, such as Dow Jones Risk & Compliance, offer a more comprehensive solution for detecting current and former PEPs, including their relatives and close associates. Our best-in-class PEP data is curated according to a carefully constructed proprietary definition that is developed through continuous analysis of international and national guidelines.

Conclusion

Relying solely on free lists of senior politicians or government-issued resources for the detection and monitoring of PEPs can be problematic, as they often are incomplete and outdated. A good PEP source should include current and former names from all countries and territories around the world, as well as their relatives and close associates.

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