Paraguay Steps Up Screening for Politically Exposed Persons

As part of efforts to prevent money laundering and other financial crimes, Paraguay is set to strengthen its screening for Politically Exposed Persons (PEPs). Compliance experts at Alessa explain that this move is essential in identifying individuals who may pose a risk to the country’s financial system.

Upgrading Laws and Regulations

According to sources, Paraguay has been working on updating its laws and regulations related to PEPs. This includes improving data quality standards required for effective screening. The Wolfsberg Group recommends that financial institutions have complete and accurate customer data records and that the PEP database used for screening contains sufficient unique identifying data.

Importance of Good Customer Records

Compliance experts at Alessa emphasize the importance of good customer records and a PEP database that can be screened using unique identifying data. This will reduce the number of false positives and the overall burden on compliance teams.

Minimum Data Quality Standards

Some of the minimum data quality standards required for effective PEP screening include:

• Name: All known names and aliases
• Date of Birth, and where this isn’t available, Year of Birth
• Country of political exposure
• Gender (where available)
• Politically exposed role(s), and date(s) or year(s) of appointment
• Date or year that the PEP left their position (where applicable)
• Where applicable, if the PEP is deceased

Reducing False Positives

Experts advise using native character searching to reduce false positives. Searching for names in their native language greatly limits transliteration issues. They also recommend using geography to help determine risks – not all countries pose the same risk. Lower-risk countries present the opportunity to reduce the amount of time spent reviewing close associates and relatives.

Alessa’s PEP Scoring Solution

To further streamline compliance processes, Alessa offers a proprietary PEP Scoring Solution that can help reduce false positives by up to 50%. The solution helps build or implement a third-party PEP risk-scoring model that works for each organization. For additional information regarding PEP scoring benefits, experts recommend viewing the company’s website.

Conclusion

Paraguay’s efforts to strengthen its screening for Politically Exposed Persons are in line with international best practices and will help prevent financial crimes in the country. Compliance experts at Alessa emphasize the importance of good customer records and a PEP database that can be screened using unique identifying data for effective screening.