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Politically Exposed Persons Screening: A Must for Financial Institutions in French Polynesia

In the wake of increasing financial regulations, financial institutions operating in French Polynesia must ensure they screen for Politically Exposed Persons (PEPs) prior to conducting business with them. PEPs are individuals who hold or have held prominent public positions, such as heads of state, government ministers, or high-ranking officials.

What are Politically Exposed Persons?

Politically Exposed Persons can be found in various sectors, including:

  • Government
  • Politics
  • Education
  • Healthcare
  • Private sector

They may hold positions such as:

  • Heads of state or government ministers
  • High-ranking officials in government agencies
  • Members of parliament or legislative assemblies
  • Judges and magistrates
  • Military personnel with high ranks

Why is PEP Screening Important?

Financial institutions must screen for PEPs to prevent the laundering of funds generated from corrupt activities. By doing so, they can:

  • Protect their reputation and maintain customer trust
  • Comply with international financial regulations, such as those set by the Wolfsberg Group
  • Reduce the risk of money laundering and terrorist financing

Minimum Data Quality Standards for PEP Screening

Financial institutions in French Polynesia should have complete and accurate customer data records. The PEP database used for screening must contain sufficient unique identifying data, including:

  • 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)

Best Practices for Screening for PEPs

When screening for PEPs, financial institutions should:

  • Use native character searching to reduce false positives
  • Utilize geography to help determine risks, as not all countries pose the same risk
  • Reduce the number of hits by using date of birth and age to refine searches
  • Consider changing screening levels based on risk factors

PEP Scoring: A Risk-Based Approach

Financial institutions can use a PEP scoring model to assess the level of risk associated with each customer. This can help streamline compliance while reducing false positives.

Conclusion

In French Polynesia, financial institutions must take proactive steps to screen for Politically Exposed Persons and mitigate potential risks associated with them. By doing so, they can protect their reputation, maintain customer trust, and comply with international financial regulations. Contact us today to learn more about how our sanctions and watchlist screening solution and PEP Scoring Methodology can help you streamline compliance while reducing your PEP-related false positives.