directive anti-blanchiment de l’Union européenne

Depuis 1991, la stratégie de l’UE pour lutter contre le blanchiment d’argent est centrée sur la transposition d’une succession de directives anti-blanchiment dans le droit national des États membres. La 5e Directive (5AMLD) a étendu les réglementations existantes en matière de lutte contre le blanchiment d’argent aux crypto-monnaies et aux bourses de crypto-monnaies, tout en améliorant l’accès aux données sur la propriété des entreprises et les PPE. Cependant, il y a un manque de cohérence législative sur les infractions de blanchiment d’argent à travers l’UE.

La 6e Directive (6AMLD), qui devra être mise en œuvre au plus tard le 03 juin 2021, cherche à résoudre ces problèmes en harmonisant les définitions des infractions de blanchiment d’argent, en étendant la responsabilité pénale aux personnes morales, en établissant des sanctions plus sévères et en renforçant la coopération entre les États pour la lutte contre la criminalité financière.

Remplissez vos coordonnées pour consulter le rapport, qui couvre les sujets suivants :

• L’UE et les AMLD
• Pourquoi 6AMLD ?
• 6AMLD : Les changements
• Responsabilités et opportunités
• Défis particuliers
• Développements futurs

Remplissez vos coordonnées pour consulter le rapport :

The post 6AMLD Le point sur la nouvelle directive anti-blanchiment de l’Union européenne appeared first on ComplyAdvantage.

Global financial authorities require banking and financial institutions to apply relevant PEP screening measures as part of their anti-money laundering program to know who among their customers are PEPs. Although PEP status is not an indicator of criminal activity or actual participation in such practices, it does involve significant compliance obligations in almost all regions of the world due to the potential risk. Financial institutions should be aware of the applicable PEP regulations in their jurisdiction and be prepared to deploy relevant AML/CFT measures  when onboarding a PEP and throughout the business relationship.

The different categories of PPE

There is no overarching definition of a politically exposed person, but the Financial Action Task Force  (FATF) defines a PEP as “a person who is or has been charged with an important public function”. Although the term varies from jurisdiction to jurisdiction, alongside the screening requirements imposed by local financial authorities, most of these distinguish between three categories of PEPs:

• Foreign : Individuals elected to political office or appointed to a significant public role or office in a foreign country should be classified as foreign PEPs for AML/CFT purposes. Foreign PEPs can be heads of state, members of government, civil servants, high-ranking military personnel or magistrates. They may also be senior executives of public companies or prominent members of political parties.
• Domestic : Individuals elected to political office or appointed to important public office in their country of residence are classified as domestic PEPs. Like foreign PEPs, the domestic category includes heads of state and other foreign government officials as well as members of political parties, senior officials, magistrates and senior executives of state-owned companies.
• Internationals: Senior managers (or persons of equivalent level) who are entrusted with important functions by international companies may be classified as international PEPs. Examples of international PEPs include senior executives, directors and board members of companies. 

PEP screening requirements may also apply to relatives and close associates (RCAs) of PEPs. Indeed, the latter may be exposed to a risk of money laundering due to their professional or social proximity to people with PEP status. 

PPE regulations around the world

North America

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

National PEP Screening Obligation: Yes (except USA)

Screening obligation for international PEPs: Yes 

In North America, the various national regulations regarding PPE are largely similar. Thus, Canada and Mexico require screening of foreign, national and international PEPs in the context of the AML/CFT fight, while the United States departs from this by not requiring screening of domestic PEPs. In 2018, a FATF assessment of Mexico highlighted the threat of organized crime and corruption in that country and identified specific gaps in screening PEPs in the absence of rigorous risk categorization. to national PEPs. 

Specifically, the regulations on screening PEPs in the United States and Canada are as follows:

UNITED STATES

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: No

Screening obligation for international PEPs : Yes 

Using the term “foreign agent” to refer to individuals with PEP status, U.S. regulations regarding PEPs are defined in the Bank Secrecy Act  and the Patriot Act  and enforced by the network against financial crime  (FinCEN). In the United States, PEP screening should be integrated into the company’s risk-based AML/CFT program. Financial institutions should therefore use reasonable judgment to incorporate appropriate screening processes, including Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) requirements.for PEPs presenting more risks. When a financial institution detects or suspects that a PEP may be involved in money laundering activities, it must submit a suspicious activity report (SAR) to the FinCEN network. 

Canada

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Screening obligation for international PEPs: Yes 

In accordance with FATF recommendations for the application of AML/CFT regulations, screening of PEPs in Canada should be part of a risk-based AML/CFT program. Canada ‘s Proceeds of Crime (Money Laundering) and Terrorist Financing Act  (PCMLTFA) sets out specific requirements for screening domestic PEPs. Indeed, while foreign PEPs are still considered high risk in Canada, the risk posed by domestic PEPs must be assessed upon onboarding and monitored on an ongoing basis. In Canada, PEP screening regulations are enforced by the Financial Transactions and Reports Analysis Center of Canada (FINTRAC).

Upcoming changes : The proposed amendments will expand the PCMLTFA by extending AML/CFT requirements to certain non-financial activities and professions and casinos. Under these changes, these entities will be required, like other financial entities, to determine which of their customers are PEPs.

Latin America

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

National PEP Screening Obligation: Yes (except Suriname)

Screening obligation for international PEPs: Depending on the country

The  Latin American Financial Action Task Force (GAFILAT) is working to develop a standardized AML/CFT strategy for the region by defining requirements for PEPs that converge with the rest of the world. In Latin America, PEP screening requires financial institutions to exercise due diligence and increased risk-based due diligence on customers and when onboarding them and throughout the duration of the commercial relationship. In Latin America, the definition of a PEP varies by country. Examples of PEPs include mayors, candidates for political office and prominent business owners (including football team owners) while grandparents and grandchildren are considered RCA.beneficial ownership  when screening PEPs and engage in effective information exchange.

Among Latin American countries, the following countries practice screening of PEPs:

Brazil

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Screening obligation for international PEPs:  Yes 

In Brazil, PEP screening is mandatory for all three categories of PEPs. The FATF assessment of Brazil identified AML/CFT weaknesses in the country’s border regions and in a predominantly informal economy, so any PEP screening measures must take these parameters into account. In 2019, the Financial Activities Control Council (COAF) , under the authority of the  Central Bank of Brazil , expanded the definition of PEPs to include mayors of all cities, as well as councilors, state representatives, and other officials . 

Chile

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Obligation to screen international PEPs: No

In Chile, PEP screening requirements apply to foreign and domestic PEPs, but not to international PEPs. In this country, the screening of PEPs is imposed by the law on the fight against money laundering, under the authority of the CMF commission (Comisión para el Mercado Financiero  and the Financial Analysis Unit (Unidad de Análisis Financiero ) that require financial institutions to exercise increased due diligence when dealing with customers with PEP status. Although it has experienced incidents of public and government corruption, Chile is not considered a high-risk country by organizations such as the FATF or the EU.

Europe

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Screening obligation for international PEPs: Yes (except Bosnia and Herzegovina)

The European Union applies a consistent policy of screening PEPs within its Member States by regularly issuing directives on the fight against money laundering while non-EU states tend to align their own PEP policies with those of the Union. Therefore, politically exposed persons in Germany, for example, are subject to the same screening requirements as in France, Spain and other EU or EEA countries. Screening of PEPs in the EU is implemented under a risk-based approach to AML/CFT and the EU has the same definition of a PEP and RCA as the FATF. But some countries in Europe would certainly require further consideration when it comes to PEPs. Albania for example, 

As not all countries in Europe are members of the EU, there are regulatory discrepancies across the continent. 

Some examples of important European jurisdictions:

United Kingdom

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Screening obligation for international PEPs:  Yes 

The UK has now left the European Union, but its PEP screening requirements remain broadly similar thanks to its prior application of EU money laundering directives. In the UK, politically exposed person screening requirements are set out by the UK Financial Conduct Authority (FCA) .

France

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Screening obligation for international PEPs:  Yes 

The screening of PEPs in France is also governed by the European directives on money laundering, which are transposed into the French penal code ,  the monetary and financial code  and other pieces of financial legislation. Regulation on PEPs is mainly implemented by the Financial Markets Authority (AMF) and the Prudential Control and Resolution Authority (ACPR).

Germany

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Screening obligation for international PEPs:  Yes 

As an EU Member State, Germany applies the European Money Laundering Directives in line with the continent’s risk-based approach to AML/CFT. In Germany, politically exposed person screening requirements are enforced by the Federal Financial Supervisory Authority  (BaFin) and defined by the  Money Laundering Act . 

Albania

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Screening requirement for international PEPs:  Yes 

Not being an EU member state, Albania is also not obliged to apply the European directives on money laundering nor the associated PEP regulations. Although Albania imposes screening requirements for foreign, domestic and international PEPs, the FATF currently considers this country to be high risk. Therefore, financial institutions need to put in place strong PEP screening measures to account for this high risk. Albanian PEP screening regulations are defined by the General Directorate for the Prevention of Money Laundering (GDPML) and enforced by the Albanian Financial Markets Supervisory Authority . 

Recent development: Under the Fifth Anti-Money Laundering Directive  (in force since January 10, 2020), all PEPs within the EU must be considered high risk, regardless of whether they are classified as foreign, domestic or foreign PEPs. international. The new legislation also requires all EU member states to publish a list of functional PEPs. 

Africa

Screening obligation for PEPs: Yes (except Libya, Guinea-Bissau and Western Sahara)

Screening obligation for foreign PEPs:  Depending on the country 

National PEP Screening Obligation: Depending on the country

Screening obligation for international PEPs: Depending on the country

Most African countries adhere to the general definition of a PEP and include heads of state, MPs, civil servants, employees of public companies as well as parents and close associates (RCA) of a PEP. Many African states, including South Africa, are members of FATF and these countries have regulations in place that require financial institutions to screen foreign, domestic and international PEPs. However, in Africa, the situation differs from country to country and several states face high levels of corruption and financial crime. Currently, Uganda, Ghana, Botswana and Zimbabwe are identified as high risk countries  by the FATF.

Even though most African countries apply screening requirements for all categories of PEPs, significant discrepancies remain across the continent. For example, in Egypt, Mauritania, Eritrea, Guinea, Sierra Leone, Somalia, Malawi, Namibia and Eswatini, financial institutions must screen foreign and domestic PEPs. Angola applies screening requirements for foreign and international PEPs, but does not require screening of domestic PEPs. In contrast, in Algeria, South Sudan and Tanzania, screening is only required for foreign PEPs. 

Top nations applying PEP screening in Africa:

Egypt

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs : No 

Obligation to screen international PEPs: No

Egypt is a member of the Middle East and North Africa Financial Action Task Force  (MENAFATF) and is committed to implementing MENAFATF recommendations on AML/CFT. In Egypt, foreign PEPs are screened, but this does not apply to international PEPs. Egypt has previously faced threats of money laundering and terrorist financing, but MENAFATF notes that the country has since worked to put in place appropriate due diligence and enhanced due diligence measures and also supervision under the control of the Egyptian Financial Regulatory Authority.

South Africa

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Screening obligation for international PEPs:  Yes 

In its 2009 assessment, the FATF identified drug trafficking and institutional corruption as a problem for South Africa, but acknowledged that the authorities were trying to improve their AML/CFT control. At the time, there were also no PEP screening requirements in the country. Since then, regulations regarding PEPs have been put in place to meet FATF standards under the authority of the South African Financial Intelligence Centre . Screening of PEPs in South Africa is now mandatory for foreign, domestic and international PEPs.

Middle East

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs:  Depending on the country 

National PEP Screening Obligation: Depending on the country

Screening obligation for international PEPs: Depending on the country

The Middle East is a diverse AML/CFT environment. Most Persian Gulf states, including the United Arab Emirates , Sultanate of Oman, Yemen, Saudi Arabia, and Iraq, mandate screening of foreign, domestic, and international PEPs, as do Israel, Jordan, Lebanon, Turkmenistan and Afghanistan. Iran requires financial institutions to screen foreign and international PEPs, while Syria only requires screening of foreign and domestic PEPs. Close to Europe, Armenia and Azerbaijan only require screening of foreign PEPs. 

The FATF has placed Iran on its AML blacklist while other countries in the Middle East are high risk nations for money laundering and terrorist financing due to the high level of government corruption. Screening of PEPs in the Middle East should therefore take this high level of risk into account. In the Middle East, naming conventions  and the risk of duplication can also pose complex challenges for customer due diligence requirements, increasing the risk of false positives and negatives. Financial institutions should ensure that their screening processes are sensitive to these factors and able to identify PEPs accurately and on a continuous basis.

Among the countries in the Middle East, the following countries practice screening of PEPs:

Saudi Arabia

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Screening obligation for international PEPs:  Yes 

In Saudi Arabia, PEP screening is mandatory for foreign, domestic and international PEPs. During its 2017 assessment, the FATF highlighted Saudi Arabia’s specific shortcomings in identifying and prosecuting individuals involved in money laundering and terrorist financing. The FATF pointed out that Saudi Arabia does not have a comprehensive definition of a PEP and that gaps remain in its requirements for screening PEPs in certain companies in the financial services sector. In Saudi Arabia, regulations for PEPs are set out in the Anti-Money Laundering Act, under the supervision of the Saudi Arabian Monetary Authority .

Türkiye

Obligation to screen PEPs: No

Obligation to screen foreign PEPs: No

Obligation to screen national PEPs: No

Obligation to screen international PEPs: No

Turkey has no screening requirements for foreign, domestic or international PEPs, which contrasts with the majority of European countries. Turkey had started the process of applying for EU membership, but its application file has stalled and the country therefore remains outside the EU and the EEA. Nevertheless, Turkey has adapted its own anti-money laundering legislation to converge with that of the EU’s Fourth Money Laundering Directive. Regulations on PEPs are set out in the Prevention of Laundering of Proceeds of Crime Act  and are enforced by the Banking Regulation and Supervision Agency .

Iran

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: No

Screening obligation for international PEPs:  Yes 

The FATF has placed Iran on its AML blacklist due to specific deficiencies in its AML/CFT infrastructure and continuing concerns about the country’s support of international terrorist organizations. In Iran, PEP screening is mandatory for foreign and international PEPs, but not for domestic PEPs, while PEP regulations are overseen by the Central Bank of Iran . Iran is currently subject to numerous financial sanctions which prohibit most financial institutions from establishing business relations with Iranian persons. 

Asia

Screening obligation for PEPs:  Yes (except China and Uzbekistan)

Obligation to screen foreign PEPs:  Depending on the country 

National PEP Screening Obligation: Depending on the country

Screening obligation for international PEPs: Depending on the country

In Asia, the AML/CFT environment is diverse and presents disparities in terms of screening requirements for PEPs depending on whether it is a more or less highly developed country. In the Philippines, for example, as well as Australia, Indonesia, Russia and smaller countries such as Thailand, Malaysia and the Pacific Island States, there is an obligation to screen foreign, domestic and international PEPs . Conversely, Cambodia only requires screening of foreign and international PEPs while China, New Zealand, Vietnam, Japan, South Korea and India only require screening of PEPs foreign. In contrast, Uzbekistan has no PEP screening requirements. 

Similar to some countries in the Middle East, PEP screening in Asia must consider naming conventions and potential duplication of names. Similarly, PEPs are an important criterion in the fight against money laundering in many Asian countries due to a high level of corruption within governments and institutions. Financial institutions must be prepared to have to manage a high risk of money laundering in certain countries including Myanmar, Cambodia and Pakistan which are currently subject to increased surveillance by the FATF while North Korea is on the FATF blacklist.

Main jurisdictions practicing PEP screening in Asia:

China

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: No

Screening obligation for international PEPs:  Yes 

China has recently introduced screening requirements for PEPs as part of its AML/CFT regulations which is overseen by the People’s Bank of China . PEP screening in China currently applies to foreign and international PEPs, but not to domestic PEPs. The FATF stresses that the lack of screening of domestic PEPs represents a major vulnerability as corruption is a significant predicate offense in China and state-owned companies play a major economic role.

Singapore

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: Yes

Screening obligation for international PEPs:  Yes 

Reflecting its status as a global financial centre, Singapore imposes screening of both foreign and domestic or international PEPs under the AML/CFT regulations enforced by the Monetary Authority of Singapore . In a recent assessment report, FATF found Singapore to be in compliance with its recommendations on PEPs. 

South Korea

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: No

Obligation to screen international PEPs: No

Screening of PEPs in South Korea is an important part of the fight against money laundering as the FATF recently exposed the high levels of fraud and corruption in that country. Following FATF recommendations, Korea is taking steps to extend its AML/CFT regulations to money laundering related to PEPs. In South Korea, PEP regulations are enforced by the Korea Financial Intelligence Unit  (KoFIU).

Japan

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: No

Obligation to screen international PEPs: No

Japan has traditionally resisted imposing increased screening requirements on PEPs, but the renewed interest of the Financial Services Agency in the fight against corruption and bribery has helped strengthen AML/CFT restrictions. In Japan, transactions involving foreign PEPs are now systematically classified as high risk and must be subject to enhanced due diligence measures.

India

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: No

Obligation to screen international PEPs: No

In India, financial institutions are required to screen only foreign PEPs. An observer member of FATF, India is striving to become a full member of this group and therefore applies a risk-based AML/CFT approach. Financial institutions must therefore introduce heightened due diligence measures to detect customers with PEP status. In India, regulations regarding PEPs are set out by the Prevention of Money Laundering Act passed in 2002. It is overseen by the Reserve Bank of India .

New Zealand

Obligation to screen PEPs: Yes

Obligation to screen foreign PEPs: Yes

Obligation to screen national PEPs: No

Obligation to screen international PEPs: No

In New Zealand, PEP screening only applies to foreign PEPs. However, New Zealand being a member of the FATF, its AML/CFT regulations require financial institutions to take risk-based measures and do what is necessary to determine the origin of PEPs’ wealth. New Zealand’s PEP regulations are set out in the AML/CFT Act 2009  and enforced by the Reserve Bank of New Zealand .

How to Comply with PEP Screening Regulations

To conduct global PEP screening and comply with local PEP regulations, financial institutions need to collect and analyze large volumes of customer and transaction data. Due diligence obligations towards customers as well as enhanced due diligence measures should concern not only the information provided by customers, but also the verification of existing lists of PEPs and a whole range of sources of information, including online and traditional media.

Manual PEP screening can be expensive and time-consuming. On the other hand, integrating specific technology and software into an AML compliance solution can enhance the efficiency and accuracy of the screening process. Smart technology tools help AML/CFT teams better manage their PEP data and compliance obligations. These solutions allow customers to be divided into groups according to defined priorities, which speeds up the collection and analysis process while reducing the risk of human error.

 This article should be used as a guide and not as legal advice.

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