Derrick ponders… Pepe’s PEP

A member of the House of Lords has been reported as saying “Taking dirty money from foreign despots is unacceptable behaviour…” whilst the Joint Money Laundering Steering Group’s guidance says, “Establishing whether individuals qualify as PEPs [politically exposed persons] is not always straightforward and present difficulties.” Derrick Paterson reflects on the problems that firms can face with foreign individuals.

The purpose of this article is to pose questions and instigate discussion. It does not represent advice. Derrick Paterson Dip (AML) FCA MICA, is the Director of Ophelimity Limited, an independent AML consultancy. He may be reached at mlro@ hotmail.co.uk

“Rick,” says Pepe, one of the senior partners at Cabbage LLP, “I’ve got a question about client due diligence [CDD]. My long-term client, Mung, has a new investor. Čebula, a company from Foristan, has bought 40%. So I decided to update my CDD.” “Well done. So what is the question?” asks the MLRO. “One of the directors of Čebula is called Zoya Zyxw. Zyxw is a common family name among the parliamentary group that forms the Foristan government. Is she a PEP?”