PEP clients and high risk clients: what are the requirements of FINMA?

How is the PEP notion applied: family members, close associates, former PEPs, sub-categories
What EDD measures should be applied to “high risk” clients? Any special measures for PEPs?
Policies and procedures relative to PEPs: FINMA’s expectations
Recent FINMA enforcement procedures related to PEPs

Introduction by the Chairman of the Conference

• Why do we have to flag PEP? What is the inherent risk? Are PEPs really increased risk relationships? A legal view versus a risk view.
• Are the definition of PEPs congruent between countries?
• Asset recovery cases related to PEPs
• Evolution of the notion of Politically Exposed Persons over time in the Swiss industry
• Other sensitive parties? Financially Exposed Persons?

The PEP clients : compliant practices, non compliant practices, evolutions

• How is the PEP notion applied? What does it mean (impact) for a Bank once a PEP is recognized?
• The different categories/risk levels of PEP (ex : domestic versus international, minister, ambassador,
  depending on country): diverse practices, advantages and drawbacks of the sub categories
• Family members and close associates of a PEP: correct and incorrect interpretations
• Evaluation / risk scoring of PEPs
• Inherent risks of PEPS: corruption, circumvention of sanctions, use of complex structures, straw-men
• The qualification of a business relationship as PEP
• Cooling off process of PEPs: conditions, follow-up measures
• FINMA enforcement procedures related to PEPs

PEPs: Best practices: Policies & Procedures – EDD according to FINMA

• Procedure of identification of the PEPs
• EDD
• Approval of business relationships with PEPs
• Continuous surveillance
• Coordination and Communication
• Training and Awareness

What are the appropriate EDD measures for PEP and other high risk clients? Market / Best
Practice

• What EDD measures should be applied to “high risk” clients? Any special measures for PEPs?
• Which EDD measures should be applied particularly regarding Source of Wealth?
• Introduction on SoW (definition and background).
• SoW in the context of KYC Procedures and Processes:
  . Roles of the 1st LoD (Front Office and CLM/KYC Teams) and 2nd LoD (FCC Teams).
  . Expected sign-offs and approvals.
• SoW Information and Corroboration requirements (focus on EDD scenarios).
• Documentation and Assessment of SoW files/memos (Best practice).
• Examples of good and bad SoW files/memos and corroboration