Financial Crime World

Preventing Financial Crimes: Jordan’s Financial Institutions Urged to Screen Politically Exposed Persons (PEPs)

Introduction

In an effort to prevent financial crimes, the Jordanian authorities are urging financial institutions in the country to screen Politically Exposed Persons (PEPs) and conduct due diligence on their customers. PEPs are individuals who hold public office or have close connections with those in power.

What are Politically Exposed Persons (PEPs)?

According to the Financial Action Task Force (FATF), a PEP is an individual who is or has been entrusted with prominent public functions, such as:

  • Government officials
  • Senior executives of state-owned enterprises
  • Members of legislative and executive bodies
  • Ambassadors
  • Others

Importance of Screening PEPs

Identifying PEPs and determining their risk level can help secure businesses for financial crime compliance. Financial institutions that fail to identify and screen PEPs risk facing fines and reputational damage.

Risk-Based Approach

Jordanian financial institutions are advised to use a risk-based approach to identify compliance risks and set the right processes and controls for risk management. This includes:

  • Consulting public databases
  • Conducting customer due diligence
  • Utilizing screening and monitoring tools

Enhanced Due Diligence (EDD) Procedures

The FATF stipulates that financial institutions must conduct EDD procedures on individuals flagged as PEPs.

Customer Profiles and Data Verification

Jordan’s central bank has emphasized the importance of maintaining accurate customer profiles and verifying the legitimacy of data provided by customers. Customers may be required to self-declare their PEP status when opening new accounts with financial institutions.

Advanced Tools for Screening

Experts warn that PEPs can have the finances and means to conduct financial crime, making it essential for financial institutions to stay vigilant and adopt robust compliance measures. Jordanian financial institutions are advised to invest in advanced tools that can:

  • Automate screening processes
  • Detect changes in existing accounts
  • Flag high-risk individuals

Solution for Jordanian Financial Institutions

Vespia, a leading provider of PEP and sanctions screening solutions, has launched its PEP & Sanctions Screening Solution for Jordanian financial institutions. The solution offers everything needed to accurately check for PEPs, screen against sanctions lists, and monitor businesses for vital updates.

Conclusion

Jordanian financial institutions must prioritize PEP screening and due diligence to maintain a strong reputation and prevent financial crimes. By integrating a risk-based approach with the right compliance measures and advanced tools, they can stay vigilant and effectively protect their business from crime and non-compliance.