Politically Exposed Persons (PEPs) Screening in Syrian Arab Republic
The Syrian Arab Republic has implemented measures to combat money laundering and terrorist financing, including the identification of Politically Exposed Persons (PEPs). PEPs are individuals who hold or have held important public office, making them a high-risk category for corruption and money laundering.
What is a PEP?
According to the EU Anti-Money Laundering Directives, a PEP is any holder of a public office at home or in a foreign country. This includes natural persons who have been assigned with prominent political functions and their immediate family members. PEPs can be categorized into three types:
Types of PEPs
- Domestic Politically Exposed Persons (D-PEPs): Individuals holding prominent public roles in national governments.
- Foreign Politically Exposed Persons (F-PEPs): High-ranking officials from foreign countries.
- International Organization Politically Exposed Persons (I-PEPs): Prominent members of international organizations, such as the UN, WTO, or NATO.
Examples of PEPs
Heads of government or heads of state, senior politicians and government officials, top military or judicial officials, senior executives of government-owned organizations, and high-ranking political party members are all considered PEPs. Close associates, including immediate family members and support staff, are also considered PEPs.
Why are PEPs particularly risky?
PEPs are assumed to be at greater risk of corruption and money laundering due to their influential public position. They may use their power to influence decisions on the awarding of contracts, finance terrorism, evade tax, or launder illegally obtained money.
Enhanced Due Diligence for PEPs
The Syrian Arab Republic requires enhanced due diligence for PEPs, including:
- Risk-based approach: Assessing the level of risk associated with each PEP.
- PEP lists: Using databases to identify and verify PEP status.
- Source of funds: Clarifying the origin of assets to prevent money laundering.
Consequences of Inadequate PEP Due Diligence
Organizations that fail to conduct thorough PEP checks may face reputational damage, fines of an unlimited amount, and regulatory penalties.
Guidelines for Managing PEP Risks
To mitigate PEP risks, organizations should:
- Implement a risk-based approach: Assess the level of risk associated with each PEP.
- Use PEP lists: Identify and verify PEP status using databases.
- Conduct enhanced due diligence: Clarify the origin of assets to prevent money laundering.
Frequently Asked Questions
Q: Why are PEPs particularly risky?
A: Politically exposed persons are assumed to be at greater risk of corruption and money laundering due to their influential position.
Q: Who is classed as politically exposed?
A: Individuals who hold or have held important public office, including natural persons with prominent political functions and immediate family members.
Q: What is a domestic PEP?
A: A person holding a position in a domestic public office, such as heads of state government, judicial or military officials, senior officials of state-owned corporations, and important party officials.