Mid-February this year was jolly exciting: it was my birthday, and the FATF published the revised version of their Forty Recommendations. (Only one of these was marked by a family-sized Battenberg cake with a candle stuck in it – I’ll let you decide which.) One of the main changes introduced by the FATF’s revisions was the extension of the definition of PEPs to include domestic PEPs as well as foreigners. This is not an FATF invention; it was first mooted officially by the World Bank in 2007, when it launched its StAR (Stolen Asset Recovery) Initiative. Their reasoning is clearly explained on pages 26 and 27 of this 2009 document, where they finish by recommending: “Laws and regulation should make no distinction between domestic and foreign PEPs. The standards adopted by FATF and regional and national standard setters should require similar enhanced due diligence for both foreign and domestic PEPs.”
The reason that all of this is on my mind (apart from the usual unending AML obsession, of course) is the news that a French local politician has been charged with drug trafficking and money laundering. Florence Lamblin is deputy mayor of the 13th arrondissement in Paris (that’s the bit with place d’Italie and Chinatown in it) – and I am guessing that she does most of her banking in France (although there are suggestions of accounts in Switzerland). This means that she would probably not be tagged as a PEP by anyone – and almost certainly not by her French bank. If what we are concerned about with PEPs is that they are susceptible to corruption because of their public profile, and because they have access to public money and public influence, then that surely is the same concern whether they bank (or invest, or purchase, or whatever) domestically or internationally. I think we are fooling ourselves if we imagine that we know our own domestic PEPs so well that we can mitigate all of these risks simply through that knowledge – again, I fear that we may be confusing “he is well-known” with “we know him well”. Need I mention the UK MPs expenses scandal? Spare a thought for the poor homeless ducks.
I hate money laundering 