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Who is politically exposed and what are my requirements?

Welcome to Query Of The Week

Every week our technical team receives a variety of client queries. In this segment, we give you access to the most common and relevant topic. This weeks query is, “Who is a politically exposed person and what is my responsibility?”

Many of you will have worked with Gareth from our Practice Support division and in the video below he walks you through this week’s Query Of The Week.

2018 AML Update – Adoption of EU 4th Directive

If this Query Of The Week was of interest to you, you will also be interested in our 2018 AML Update – Adoption of EU 4th Directive online course.

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CPD Allocation 1 Hour
Fee €28 (or 1 CPD Club point)
Presenter Garret Wynne – OmniPro
Category Practice Management

Query Of The Week – Video Transcript

(Please note that this is a direct unedited transcript of the spoken word as recorded on the video) 

Hello and welcome to this week’s query of the week. For those of you who do not know me, my name is Garret Wynne and I work exclusively with practices through our practice support division.

On a daily basis in OmniPro, we receive a number of queries through various mediums; through phone, through email, and through our dedicated platform which is now Knowledge Hub. The idea and principle behind our query of the week is to bring you a flavour of those queries, and to let you see what we receive on a common basis within OmniPro.

This week we’re going to look at anti-money laundering. As everybody is aware, anti-money laundering legislation was updated just before Christmas in 2018, which has meant that the Fourth Directive is now in play in Ireland officially.

One of the most common issues and one of the most common problems and queries that we’re getting in relation to this is in relation to Politically Exposed Persons. This is a first-time principle within Ireland. The common query that we’re getting is what is my responsibility in relation to PEPs, and who officially are PEPs themselves?

Under the new directive we have a common definition of what is a Politically Exposed Person. From an Irish perspective a Politically Exposed Person now effectively is a member of the government, a high-level member of the actual parliament and Oireachtas themselves, so a government minister or the head of the government parliament themselves.

Secondly, the definition extends to members of the judiciary, so high-ranking members of the actual judiciary within Ireland itself. Thirdly, the definition extends to a member of a government-sponsored body, so a CEO of a government-backed industry within Ireland itself. And finally, we’re looking at high-level members of the armed forces as well, within that definition.

The definition then is not exclusive to only those members, but excludes to the close associates, and close associates are defined as the husband or wife, the children, the spouses of their children, and also their parents.

If you have identified a Politically Exposed Person, i.e., Garret Wynne, you also have to include my family, my extended family, within that definition. The difficulty for practicing accountants is I have a person sitting in front of me, how do I know that they are a Politically Exposed Person?

Part of our updated AML procedures manual we have included additional questions within our client identity form. This questionnaire will actually force you to ask those questions of the individual that is sitting in front of you at the time of client identity.

If you do then subsequently identify a Politically Exposed Person, you have specific requirements which effectively are determined under enhanced procedures as an AML process.

So, what are the enhanced procedures? We do our common checks, we get our standard ID in terms of our driving license or passport that must be in-date, our utility bill to prove the physical address of that individual, and then the enhanced element is an additional check.

As it is defined at the moment, an additional check could be something simple as a check online, so an internet check for the individual to confirm their position within that government department; or a credit check that can be run on that individual to confirm who they are and to give additional comfort that we know who that person is.

So as I said, this is one of the most common queries I’ve been getting the last few weeks in relation to who is a Politically Exposed Person and what, then, is my responsibility in relation to that person?

That concludes this week’s query of the week. I hope that you have found it informative and beneficial to you and your role. I would like to thank you for taking the time to watch this video.