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16.20 Foreign Politically Exposed Person (FPEP) and Head of International Organization (HIO) Checks

N 35/2018 STA
  1. 16.20.1The Licensed Person must implement appropriate systems and tools to determine whether a customer, who is a natural person or the beneficial owner of a juridical person, is a FPEP or HIO or family members or associates of such a person. The Licensed Person must also carry out a periodic review of existing customers to determine if any of them is a FPEP or HIO or a family member or associate of such a person;
  2. 16.20.2Where a natural person is found to be a FPEP or a family member or associate of a FPEP, the Licensed Person must carry out Enhanced Due Diligence to establish business relationship and to conduct transactions accordingly. In addition to this, the Licensed Person must also take reasonable measures to determine the source of funds and collect the information regarding the source of wealth of such customers, if it deems it necessary;
  3. 16.20.3Where a natural person is found to be a HIO or a family member or associate of a HIO, the Licensed Person must assess the level of risks involved and must conduct Enhanced Due Diligence to take measures as appropriate, in case the risk is considered High for ML/FT;
  4. 16.20.4Approval from the Compliance Officer and the Manager in Charge must be obtained before processing any transaction in the Point of Sale system for a natural person who is a FPEP and for high risk HIO;
  5. 16.20.5The Licensed Person must refer to Paragraphs 16.11.2 (k) and (l) of this Chapter for requirements while entering into business relationships with juridical persons (i.e. legal entities) owned by FPEPs; and
  6. 16.20.6All transactions by a FPEP or HIO or by an entity where the Ultimate Beneficial Owner is a FPEP or HIO must be closely monitored by the Compliance Officer. The systems must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts.