Anti-Money Laundering/Countering the Financing of Terrorism for Fund Management Companies
What is a politically exposed person (PEP)?
The definition of a politically exposed person (PEP) in Singapore is drawn from the Financial Action Task Force (FATF) Recommendations 11 and 12.
While the strict definition of PEP remains broad, it describes an individual who is more susceptible to being involved in bribery or corruption due to their prominence and/or position, such as a member of parliament.
According to FATF (Recommendations)
last revised June 2013
A politically exposed person (PEP) is an individual who is or has been entrusted with a prominent function. Many PEPs hold positions that can be abused for the purpose of laundering illicit funds or other predicate offences such as corruption or bribery. Because of the risks associated with PEPs, the FATF Recommendations require the application of additional AML/CFT measures to business relationships with PEPs. These requirements are preventive (not criminal) in nature, and should not be interpreted as meaning that all PEPs are involved in criminal activity.
According to MAS (Guidelines)
last revised 24 April 2015
8-4-2 In the context of Singapore, domestic PEPs should include at least all Government Ministers, Members of Parliament, Nominated Members of Parliament and Non-Constituency Members of Parliament.
8-4-3 When determining whether a person is a “close associate” of a PEP, the CMI may consider factors such as the level of influence the PEP has on such a person or the extent of his exposure to the PEP. The CMI may rely on information available from public sources and information obtained through customer interaction.
8-4-4 With reference to paragraph 8.1 of the Notice, examples of an “international organisation” include the United Nations and affiliated agencies such as the International Maritime Organisation and the International Monetary Fund; regional international organisations such as the Asian Development Bank, Association of Southeast Asian Nations Secretariat, institutions of the European Union, the Organisation for Security and Cooperation in Europe; military international organisations such as the North Atlantic Treaty Organisation; and economic organisations such as the World Trade Organisation or the Asia-Pacific Economic Cooperation Secretariat.
8-4-5 Examples of persons who are or have been entrusted with prominent functions by an international organisation are members of senior management such as directors, deputy directors and members of the board or equivalent functions. Other than relying on the information from a customer, the CMI may consider information from public sources in determining whether a person has been or is entrusted with prominent functions by an international organisation.