What is PEP?

The first time I ran a Google search on the PEP, it brought up websites about post-exposure prophylaxis.  That’s not exactly what I was looking for.

I was searching for the PEP, you ask?  The PEP (politically exposed person) is just as it sounds. A person on the PEP is usually an existing or previous senior foreign political figure, their direct family, and their close contacts/associates.

PEPs are not only typical political figures. They can also be executives of a foreign government-owned corporation.

Now, why does PEP matter to you?

PEPs have used financial institutions as conduits for corruption, bribery, money laundering… the list goes on with illegal activities.

But, not all PEPs have the same amount of risk.  Their individual risk will be determined by several different factors (geographic locations, business they are in, position, level of authority, etc).  Products, services and size as well as the complexity of the account determine the risk as well.

As of the year 2001, banks and financial institutions are required to use procedures to establish risk in order to determine if a person is on the PEP list. Banks that choose to still “do business” with dishonest PEPs face a huge risk, more regulations and possible supervisory action. So … make sure you are checking the PEP list.

Integra makes it easy.  Find out how at www.integrasystems.net.

 

What is OFAC?

What is this OFAC?

Repeat after me, Office of Foreign Assets Control (run by the US Dept. of Treasury). That’s a mouth full.

What does OFAC do?

OFAC manages and implements financial and trade authorizations (sanctions).  They closely monitor and in some cases, freeze assets (under the U.S. authority) of targeted foreign countries, regimes, terrorists, international narcotics traffickers, those involved in manufacturing and selling weapons of mass destruction, and other threats to the U.S. economy, national security or foreign policy.  These sanctions require collaboration with allied governments and are based upon the United Nations’ directives.  (Whew!)

So, there’s an OFAC list I’m supposed to do something with?

OFAC lists individuals and organizations that the government suspects of terrorism or having ties to terrorism. If they are on the list, their assets have or will soon be frozen! Funding organizations with terrorist ties (as listed by OFAC) is illegal. If OFAC finds that your organization is violating the lists, there are major fines involved.  (We are talking MAJOR fines… yikes!)

Understanding OFAC and how to become compliant can be a challenge.

If you have any questions, give us a call or send us a message.