Financial Conduct Authority's Guidance on PEPs and Money Laundering. LexisNexis Karen E Gray Senior Supply Management Specialist

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1 Financial Conduct Authority's Guidance on PEPs and Money Laundering LexisNexis Karen E Gray Senior Supply Management Specialist

2 Financial Conduct Authority s Guidance on PEPs and Money Laundering Karen E Gray, Senior Supply Management Specialist LexisNexis Sourcing Industry Group s Global Executive Summit 53 rd Edition, March 2018

3 About Lexis Nexis A leading global provider of legal, regulatory and business information and analytics that help professional customers make more informed decisions, increase productivity and serve their clients better. LexisNexis Legal & Professional, which serves customers in more than 175 countries with 10,000 employees worldwide, is part of RELX Group, a worldleading provider of information and analytics for professional and business customers across industries.

4 SUMMARY OF THE FCA GUIDANCE Firms will take appropriate but proportionate measures in meeting their financial crime obligations Firms must apply a risk sensitive approach to identifying PEPs and then applying enhanced due diligence measures Firms use guidance provided for clarity in applying the definitions of a PEP In too many countries, people are deprived of their most basic needs and go to bed hungry every night because of corruption, while the powerful and corrupt enjoy lavish lifestyles with impunity. José Ugaz, Chair of Transparency International

5 AGENDA Financial Conduct Authority s Guidance on PEPs and Money Laundering What s in a name? Not all PEPs are equal A case by case approach to PEPs What should companies do?

6 WHAT S IN A NAME PEPs are individuals who hold powerful positions in public office, and they are considered a risk to companies because they could abuse their office for private gain and launder the proceeds. The new guidance applies to any UK institution whose AML procedures are overseen by the FCA, and advises them on how they can meet their AML obligations when opening a new business relationship or monitoring an existing relationship with a PEP.

7 WHAT S IN A NAME Founder Eugene Cap Gen Financial Wife Carol PFG Museum DC Bar Pro Bono US Dept of VA

8 NOT ALL PEPS ARE EQUAL * Transparency International ~ Corruption Perception Index

9 NOT ALL PEPS ARE EQUAL No activist or reporter should have to fear for their lives when speaking out against corruption. Given current crackdowns on both civil society and the media worldwide, we need to do more to protect those who speak up. Patricia Moreira Managing Director Transparency International * Transparency International ~ Corruption Perception Index

10 NOT ALL PEPS ARE EQUAL Domestic PEPs vs International PEPs * Transparency International ~ Corruption Perception Index

11 NOT ALL PEPS ARE EQUAL Putting the scores in context * Transparency International ~ Corruption Perception Index

12 NOT ALL PEPS ARE EQUAL A call for transparency Free Speech and Independent Media International Agreements Work without Fear Access to Information Proactive Disclosure * Transparency International ~ Corruption Perception Index

13 NOT ALL PEPS ARE EQUAL Americas: 2016 was a good year in the fight against corruption in the Americas. But there is still a long way to go. Middle East and North Africa: Despite the political changes that shook the Arab region six years ago, the hope for Arab countries to fight corruption and end impunity has not seen any progress yet. Sub Saharan Africa: 2016 saw elections across the African continent with the results providing a good reflection of corruption trends in the region. Europe and Central Asia: There are no drastic changes in Europe and Central Asia on this year s index, with only a few exceptions. Asia Pacific: Unfortunately, the majority of Asia Pacific countries sit in the bottom half of this year s Corruption Perceptions Index.

14 A CASE BY CASE APPROACH TO PEPS Not all PEPs carry the same level of risk. Companies should have access to accurate and up-to-date information on PEPs. Refusing to do business with someone simply because they are a PEP is unacceptable. It is up to each company to identify individuals who count as a PEP, and assess whether each PEP poses a risk. Websites of parliaments and governments, reliable news, reliable anti-corruption groups, public registers, and/or commercial sources.

15 WHAT SHOULD COMPANIES DO? Implement a risk-based approach to manage the risk of corruption from PEPs Seek advice and permission from Senior Management when considering whether to start or continue a business relation with a PEP Establish where a PEP obtained their wealth before entering into a business relationship with them Continue to monitor a PEP throughout any business relationship with them Use a wide-range of sources such as legal information, news coverage, government listings, and company data to assess the level of risk posed by a PEP

16 Questions and Answers Thank you for your attendance!

17 Evaluation How-to: Why? How? Your feedback drives SIG Event content By signing and submitting your evaluation, you are automatically entered into a prize drawing From the App 1. Select Sessions 2. Select Day 3. Select Session S12 4. Click on Clipboard Icon COMPLETE & SUBMIT EVAL

18 Session # 12 Financial Conduct Authority's Guidance on PEPs and Money Laundering LexisNexis Karen Elaine Gray Sr Supply Management Specialist karen.gray@lexisnexis.com Download the App: sig.org/app Tweet: #SIGspring18

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