PEPs, or Publicly Exposed Persons, require enhanced due diligence, NOT because they are more likely to be money launders as many overwrought risk managers and silly compliance people seem to think. Statistically, PEPs are
While certainly there have been instances whereby a senior political figure has in fact made their fortunes through corruption and the abuse of their position, the basis that PEPs require additional due diligence is also born out in an additional risk: if these persons are allowed to use the system to subvert the controls, and be allowed to compromise the fidelity of their duties to the public – our public systems and institutions can be made to fail.
The entire pretense of civil society is that it is free and that all its’ participants operate by the same rules. If there are two or more sets of rules, they will be taken advantage of by those with the money, power and the insight to use both sets of rules to concentrate their power and wealth. Ultimately, the concentration of wealth and power destabilizes the very institutions they sought to subvert to gain their wealth and power.
What does a nation look like that has two sets of rules? Some examples are, Argentina, Zimbabwe, Haiti, Côte d’Ivoire, Cambodia of Khmer Rouge Days, etc… you get the idea – the result is a mess heading backwards and accomplishing nothing but the de-civilization of a nation and its people.
PEPs are not more likely to launder money however it is just the consequence of an undisclosed income that tends to indicate an abuse of office and is an issue that must be raised – and raised publically.
Now what about CREPs – Corporately Responsible Exposed Persons? How does bribery, corruption and money laundering impact these entities?