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Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001)

Notices

Guidance Note 3

Guidance for Banks on Customer Identification and Verification and Related Matters

Politically Exposed Persons (PEPs)

26. Treatment of PEPs in relation to other high-risk clients

 

In terms of the FATF standards, specific action should be taken in relation to PEPs as a category of high-risk client. In addition to performing customer due diligence measures, banks should put in place appropriate risk management systems to determine whether a customer, a potential customer or the beneficial owner is a PEP. In addition banks:

• should obtain senior management approval for establishing business relationships with a PEP. When the client has been accepted, the bank should be required to obtain senior management approval to continue the business relationship;
• should take reasonable measures to establish the source of wealth and the source of funds of customers and the beneficial owners identified as PEPs;
• should conduct enhanced ongoing monitoring of a relationship with a PEP.