Banks use database of ‘politically exposed persons’
KARACHI: A newly formed database that identifies over 100,000 “politically exposed persons” (PEPs) in the country has enabled banks, public and private financial institutions, organizations monetary affairs, and realtors in Pakistan to help keep an eye on their clientele with the consent of with Financial Action Task Force (FATF).
An official source reported that this trend increased rapidly after June 2021 as it was announced that Pakistan will continue to be on the grey list for an additional year and provide seven new action points to approach the insufficiencies in its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regime.
The source added that the banks and other institutions were keeping an eye on the instructions of the governing bodies and financial market watchdogs.
A senior executive of a local financial institution stated his organization had used the database to remain vigilant of any troubles and take precautionary measures which are listed by the authorities to be safe and accommodate the country in reaching the FATF agreement.
A document named “Politically Exposed Persons (Recommendations 12 and 22) explains that the PEP is a person who is given the position and influence to keep the country from money laundering and offenses of corruption. Their positions are vital as they can deduct money laundering offenses, corruption, bribery, and movement-related to terrorist financing.
Syed Wajih Hassan, a chief executive officer of the First Paramount Modaraba (non-banking financial institute) shares that “FPM got valuable insights about the screening practices of the industry and was able to identify hindrances that fail businesses in adequately mitigating the risks associated with financial crimes and financing of terrorism by using this database.”
He further explained that the FPM’s PEP data worked in compliance with the structure provided by the PEP given by FATF. Furthermore, FPM has extended its coverage to the domains which are important for AML agreement in reflection of the domestic standards of the country.
He also pointed out that there is a High-level classification of the PEPs’ data in the institutions and the places that involved government, legislative bodies, judiciary, diplomats, municipalities, state-owned enterprises, ministries and bureaucracy, law enforcement, and security, political and religious groups.
He concluded that the data sources were evaluated strictly for authenticity and accuracy. The data collected from these sources went through a range of changes before it was organized into a design fitting for display. The sole owners of the organized data at the end of the process belonged to FPM and its partners.