A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence they may hold.
[2]: 18 Foreign PEPs pose a unique risk as their influence and connections may not be as easily recognisable or understood by institutions outside their home country.
[3] A forerunner definition was by the 1997 OECD Anti-Bribery Convention aimed at reducing corruption, which came into force February 1999; it used the term foreign official.
"[citation needed] Sani Abacha was a Nigerian dictator who organized a large-scale, systematic theft of assets from the Central Bank of Nigeria for some years with his family members and associates.
[4] In 2001, the Nigerian Government succeeding the Abacha regime made an effort to recover the money,[5] and lodged complaints with several European agencies, including the Federal Office of Police of Switzerland, which investigated close to 60 Swiss banks.
This eventually led to the October 2003 resolution of the United Nations Convention against Corruption, entered into force in December 2005, with ongoing annual reviews of implementation and asset recovery.
[citation needed] Heavy fines have been imposed on financial institutions for conducting business with PEPs without following adequate procedures, as in 2004 in the case of Riggs Bank in Washington, D.C.[8] In spite of regulation, political leaders like Muammar Gaddafi and Hosni Mubarak made news in 2013 for having frozen assets in US banks that did not follow due diligence.
[9] Most financial institutions view a PEP as a potential compliance risk, and perform enhanced monitoring of accounts that fall within this category.
[12] In Chile, financial institutions are mandated to report any transaction suspicious for potential involvement in bribery by virtue of a PEP's position and the influence that they may hold.
[13] Egypt is a member of the Middle East and North Africa Financial Action Task Force (MENAFATF) and has committed to implementing the FATF's AML/CFT recommendations.
"[citation needed] The new law "prohibits what Beijing describes broadly as secession, subversion, terrorism and collusion with foreign forces", with maximum penalties of up to life terms in prison.
HSBC, Credit Suisse, Julius Baer and UBS declined to comment to the Daily Telegraph for a 20 July 2020 news article.
The Financial Conduct Authority and Joint Money Laundering Steering Group both publish comprehensive guidance on both PEPs and other know-your-customer (KYC) related matters to assist firms in complying with their legal obligations.
The term 'Senior Foreign Political Figure', as defined by section 312 of the USA PATRIOT Act is to a great extent similar to the definition of a PEP, and also excludes middle-ranking or more junior individuals.