By Legal Futures Associates VirtualSignature-ID
For accountancy firms, dealing with Politically Exposed Persons (PEPs) and sanctions checks could be familiar territory.
However, the workings of these checks, particularly when they involve overseas citizens, can be particularly challenging.
PEPs and sanctions checks
A Politically Exposed Person (PEP) is someone who holds a prominent public position, either domestically or internationally.
Due to their status and influence, PEPs are at a higher risk for potential involvement in bribery, corruption, and money laundering.
Sanctions checks, on the other hand, involve screening individuals and entities against national and international sanctions lists to ensure compliance with various laws.
The aim is to prevent doing business with individuals or entities involved in activities such as terrorism, drug trafficking, and other criminal activities.
UK accountancy firms and international PEPs and sanctions checks
Accountancy firms in the UK are legally required under the Money Laundering Regulations 2017 to carry out PEPs and sanctions checks on overseas citizens. The regulations were designed to help prevent money laundering and the financing of terrorism.
These checks become increasingly significant when dealing with clients who are citizens or have a business presence in countries identified as high-risk.
As a result, it is crucial that UK accountancy firms integrate thorough compliance checks into their customer due diligence processes, regardless of the client’s nationality or country of residence.
Are international PEPs and sanctions checks holding up your workflow?
Although they are necessary requirements, conducting PEPs and sanctions checks on overseas citizens does not come without its challenges.
One major hurdle is that these checks can significantly slow down the workflow, particularly for firms dealing with a high volume of international clients.
This is due to the thorough nature of the checks, often involving multiple databases and sources of information.
Compiling and analysing this data can be time-consuming, especially when considering language barriers and time zone differences.
Additionally, the dynamic nature of sanctions lists, which can be updated frequently, requires constant monitoring to ensure ongoing compliance.
The difficulty of checking a person’s credentials face to face when they travel or live overseas means that a reliable method of doing this remotely is needed; one that will identify them and carry out screening accurately and compliantly, thus saving valuable time and speeding up decision making.
While it’s true that international PEPs and sanctions checks can slow down your workflow, with the right approach, these checks can be streamlined.
VirtualSignature-ID’s SmartCheck ID-Validate app can do exactly this, enabling firms to quickly verify the identities of PEPs and conduct thorough sanctions checks.
Our Professional and Enterprise plans will give your firm access to these PEPs and sanctions checks, as well as KYC and AML checks. Please contact us today for more information.