Politically Exposed Person (PEP) Policy (VML0010)

1. INTRODUCTION

A politically exposed person (PEP) is defined by the Money Laundering (Jersey) Order 2008 (MLO) as follows:

1.1. An individual who is or has been entrusted with a prominent public function in Jersey or in a country or territory outside Jersey or by an international organization outside Jersey, for example:

• Heads of state, heads of government, senior politicians.
• Senior government, judicial or military officials.
• Senior executives of state-owned corporations.
• Important political party officials.
• An immediate family member of a person including any of the following:
  • A spouse.
  • A partner, that is someone considered by his or her national law as equivalent or broadly equivalent to a spouse.
  • Children and their spouses.
  • Parents.
  • Grandparents and grandchildren.
  • Siblings.

1.3. Close associates of a person including any person who is known to maintain a close business relationship with such a person, including a person who is in a position to conduct substantial financial transactions on his or her behalf.

1.3.1. For the purpose of deciding whether a person is a close associate, a relevant person need only have regard to information which is in that person’s possession or is publicly known.

2. STATUTORY REGULATIONS

2.1. The JFSC states that appropriate risk-based systems and controls must be put in place to determine whether an applicant for business; owner or controller of an applicant; or third party on whose behalf an applicant acts, is a PEP.

2.2. A firm must have clear policies and procedures for dealing with PEPs, including:

• Appropriate senior management approval to establish a relationship with a PEP, and for continuing a relationship should a subsequent connection with a PEP be identified; and
• Enhanced CDD, including enhanced scrutiny and regular oversight of the relationship at appropriate
  senior management level.

3. HOW TO IDENTIFY A PEP

Given our usual client base, Viberts has a low likelihood of its clients having foreign PEP status. If however, over the course of a business relationship through standard questioning, you feel that a client could fall under any of the categories in sections 1.1, 1.2 or 1.3 above, you must check online sources for the business and personal profile of that person and complete an online search using C6 Intelligence.

There is greater opportunity for local PEPs and you should be alert to this possibility and make suitable enquiries to confirm the situation or otherwise. Authorisation from a senior Partner will be required when status of a PEP is concerned.

4. WHAT TO DO IF YOU THINK YOU MAY BE DEALING WITH A PEP

If any information indicates that an applicant for business could be subject to PEP status, you must contact the MLCO for advice on whether we should proceed with that business relationship and, if so, what measure of enhanced due diligence you should apply. This should include, but not be restricted to, the following:

4.1. Taking adequate measures to establish the source of wealth and source of funds involved.

4.2. Ensuring that all business/monetary transactions are consistent with the client’s risk profile.

4.3. Conducting enhanced on-going monitoring of the business relationship.

5. DOMESTIC PEPS

5.1. In the context of Jersey, PEPs are considered to include (but not limited to) the following:

• Lieutenant-Governor.
• Ministers (but not necessarily deputy ministers).
• Chief Executive of the Government of Jersey.
• Director-Generals of the Government of Jersey.
• HM Attorney-General.
• HM Solicitor-General.
• Commissioners of the JFSC.
• Director-General of the JFSC.
• Registrar of Companies.
• Information Commissioner.
• Comptroller and Auditor-General.
• Bailiff.
• Deputy Bailiff.
• Judicial Greffier.
• Comptroller of Taxes.
• HM Receiver General.
• Senior Executives of States owned body corporates (or similar), e.g. Jersey Telecom, Jersey Electricity, Ports of Jersey and Andium Homes.
• Immediate family members and close associates of all the above individuals.

5.2. We only need to undertake enhanced CDD measures for matters with domestic PEPs which are assessed as higher risk.

5.3. Individuals entrusted with a prominent Jersey public function may be considered low risk unless we consider that there are other factors indicating a higher risk, such as:

• Responsibility for, or ability to influence, large public procurement exercises.
• Responsibility for, or ability to influence, allocation of government licences or similar.
• Personal wealth or lifestyle inconsistent with known legitimate sources of income or wealth.
• Credible allegations of financial misconduct.

5.4. Likewise, immediate family and close associates of individuals entrusted with a prominent Jersey public function may be considered to pose a low risk unless there are other factors which we consider to indicate a higher risk, such as:

• Wealth of lifestyle inconsistent with known legitimate sources of income or wealth.
• Credible allegations of financial misconduct.
• Wealth derived from the granting of government licences or similar.
• Wealth derived from preferential access to the privatisation of former States assets.

5.5. All potential PEPs must be referred to the Head of Risk and Compliance for guidance/approval.