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FFIEC Exam Manual-Politically Exposed Persons

Answered by: 
Jim Bedsole

Question: 
The FFIEC Exam Manual refers to Politically Exposed Persons, as a "senior foreign political figure". We have Examiners here, who also have stated that they are only foreign political figures (and their families, close friends, & associates, etc...). But, we had a State of Arkansas House of Representative come up as a "hit" on the Enhanced Politically Exposed Persons (PEP) list when we ran them through the OFAC section of Chexsystems. So, I am just looking for some clarification or guidance on this.
Answer: 

While the FFIEC Exam Manual only addresses foreign PEPs, many institutions have started looking harder at domestic PEPs as well as they could also be a source of increased risk exposure for money laundering and corruption. Some vendors include domestic PEPs in their watch lists to accomodate those institutions that choose to treat domestic PEPs as higher risk.

First published on 10/28/2018

Filed under: 
Compliance
Filed under compliance as: 
OFAC
Anti-Money Laundering

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