GC17/2: Treatment of politically exposed persons (PEPs) under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

Open consultation: GC17/2
16/03/2017
Consultation closes
18/04/2017
18/04/2017
Finalised Guidance
June 2017

We are consulting on new guidance for how financial services firms should treat customers who are politically exposed persons (PEPs) when meeting their anti-money laundering obligations.

Show GC17/2 (PDF)

This guidance consultation follows the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 published by HM Treasury on March 15.

Our proposed guidance clarifies who should be considered a PEP, a family member of a PEP or known close associates and the steps that firms should take when dealing with higher or lower risk PEPs.

We expect firms to take a proportionate approach to meeting their money laundering obligations but there has been some evidence that firms are not applying enhanced due applied measures that were not commensurate with the risk posed by the PEP.

This guidance is intended to give firms certainty on our expectations for how they treat the varying risks posed by PEPs, whether they are based in the UK, another EU member state or in a country outside the EU.

We will monitor the extent to which this guidance is leading financial services to take a differential and risk based approach to their treatment of PEPs, their family members and known close associates.

Who this applies to

This guidance is aimed at any firm that are subject to supervision by us for anti-money laundering purposes. This includes, but is not limited to:

  • banks
  • building societies
  • wealth management firms
  • e-money institutions
  • investment managers

It will also be of interest to some consumers who hold high public office in the UK such as MPs as well as family members and close associates of those holding high office.

What you need to do

This consultation has now closed.

Next steps

We will consider your feedback and issue a response before the law requires it to be in place by 26 June 2017.