All PEPs, whether natural person customers or the BOs of legal persons or legal arrangements, are required to undergo EDD as defined in Paragraph 16.13.4, no matter the transaction in which they seek to engage. It is not acceptable to conduct only CID and CDD on a PEP customer.
16.13.2
Licensed Persons should note that the definition of PEPs includes their direct family members and close business associates. A legal person or legal arrangement qualifies as a PEP when its BO(s) meets the definition of a PEP.
16.13.3
The Licensed Person must implement appropriate systems and tools to determine whether a customer, who is a natural person or the BO of a legal person or arrangement customer, is a PEP. Where the Licensed Person has established a customer profile for a customer, the Licensed Person must repeat this check at least once every 12 months, or prior to carrying out the first transaction following the expiration of the 12-month period;
16.13.4
Where a natural person, a legal person or legal arrangement customer or a BO of a legal person or legal arrangement customer is found to be a PEP, the Licensed Person must perform the following mandatory steps:
a)
Take reasonable measures to identify the source of funds and the source of wealth of the customer or the BO(s);
b)
Obtain approval from the Compliance Officer and the Manager in Charge before processing any transaction in the Point of Sale system. If the BO of a legal person or legal arrangement customer is an PEP, the Board of Directors (or of the Owner/Partners where there is no Board of Directors) must approve the relationship or the processing of a transaction; and
c)
Perform any other EDD as necessary to manage the risk of the customer.
16.13.5
The Licensed Person must refer to Paragraphs 16.11.2 (a).14 and (b).2 of this Chapter for requirements while entering into business relationships with a legal person or legal arrangement owned by PEP;
16.13.6
All transactions by a PEP or by a legal person or legal arrangement customer where the BO is a PEP must be closely monitored by the Compliance Officer. The transaction monitoring systems employed by Licensed Person must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts.