A PEP is an individual who is or has been entrusted with a prominent public function. Identifying PEPs depends on the effective implementation of Customer Due Diligence (CDD) and a risk-based approach.
🔍 Categories of PEPs under FIAMLR (Regulation 2):
• Domestic PEPs – Individuals entrusted with prominent public functions in Mauritius
• Foreign PEPs – Individuals entrusted with prominent public functions by a foreign country
• International Organisation PEPs – Individuals entrusted with prominent functions in international organisations, including senior management such as directors, deputy directors, and board members
• Family Members of PEPs – Relatives by blood, marriage, or similar partnerships
• Close Associates of PEPs – Individuals closely connected socially or professionally
⚠️ Why PEPs Matter:
PEPs are inherently higher-risk due to their position, influence, and potential exposure to bribery or corruption risks. However, refusing a relationship solely because a client is a PEP is contrary to FATF guidance.
📌 Key Regulatory Obligations (FIAMLR Regulations 12 & 15):
Reporting persons must, in addition to standard CDD:
• Identify whether a customer or beneficial owner is a PEP
• Obtain senior management approval before establishing or continuing the relationship
• Establish the source of wealth and source of funds
• Apply Enhanced Due Diligence (EDD)
• Conduct enhanced ongoing monitoring
• Maintain a PEP register
💡 What this means:
PEP relationships must be assessed based on risk, not time limits. Institutions should carefully evaluate whether they can adequately manage the legal, reputational, and AML/CFT risks associated with such relationships – in line with their internal risk appetite.
Strong governance, documented decision-making, and evidence-based controls are critical when onboarding or maintaining PEP relationships.
💬 Acrion Ltd supports institutions in strengthening PEP risk frameworks, EDD procedures, internal registers, and AML/CFT training – providing practical, regulator-aligned guidance. For support or guidance, contact info@acrioncompliance.com.
Access the full guidelines here: https://lnkd.in/dijFJa9f
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