Read our examination feedback on politically exposed persons

In 2024 we examined how supervised persons were meeting their obligations regarding politically exposed persons. We have now published our feedback from this examination, including an anonymised summary of the key findings and relevant good practice.

Some of the areas for improvement we identified include:

• compliance monitoring plans not testing the effectiveness of systems and controls in place to address risk associated with PEPs
• backlogs and deficiencies with periodic reviews for high-risk PEP customers  
• declassification of PEPs too early, contrary to the requirements of the Money Laundering Order

Our feedback also identifies good practice including:

• business risk assessments clearly articulate an understanding of the risks associated with PEP customers and the mitigating measures put in place
• policies and procedures address the differing requirements for the application of customer due diligence measures (standard or enhanced) and declassification depending on the category of PEP
• the effectiveness of screening tools used to identify PEPs or PEP connections is appropriately calibrated and periodically tested for effectiveness

Supervised persons should now read the feedback and review its findings against their own arrangements: 2024 politically exposed persons examination feedback