Account Opening
Enhanced verification: source of wealth, source of funds, beneficial ownership, senior management approval.
PEP Banking
Politically Exposed Person Banking
How banks handle politically exposed person accounts. Learn about PEP banking requirements, enhanced due diligence, and ongoing monitoring obligations.
Key Information
PEP banking requirements
Politically exposed person banking presents unique challenges for financial institutions balancing customer service with compliance.
Banks must implement robust PEP identification, conduct enhanced due diligence, obtain senior management approval, and maintain heightened ongoing monitoring.
Banking obligations for PEPs
Enhanced Due Diligence
Additional identity verification, understanding political connections, verifying wealth legitimacy.
Ongoing Monitoring
Enhanced transaction monitoring, lower alert thresholds, regular relationship reviews, prompt investigation.
Senior Management
Documented approval required. Management informed of significant transactions, risk changes, and adverse information.
Frequently asked questions
Can banks refuse to open accounts for PEPs?
Yes, banks can decline based on risk assessment. However, blanket policies refusing all PEPs may be discriminatory. Decisions should be risk-based and documented.
What documentation do PEPs need?
Beyond standard KYC: source of wealth evidence, employment verification, tax returns, asset declarations, explanation of large deposits.
How often should PEP accounts be reviewed?
At least annual reviews, with more frequent reviews for higher-risk PEPs. Assess continued appropriateness of risk rating.
Simplify Your Compliance
ARCaml helps Australian businesses meet AML/CTF obligations.