PEP's, Sources of Wealth & Sources of Funds

Politically Exposed Persons

Relationships with PEPs may represent increased risks due to the possibility that individuals holding such positions may misuse their power and influence for personal gain or advantage. Subject persons are always required to apply EDD when a business relationship or occasional transaction involves a PEP, however PEPs do not pose the same ML/FT risk and subjects persons should apply a risk based approach for PEPs and assess the different types of risks in terms of customer, product, geography and channel. The nature and extent of CDD should be appropriate to the risk that the subject person has assessed in relation to the PEP.

We will go through the various risks posed by PEPs and what mitigation factors should be put in place in order to address such risks.

Sources of Wealth / Sources of Funds

Source of wealth and source of funds are a key component of the customer due diligence. Collecting information, (and depending on the risk, collecting the supporting documentation) in order to understand the customer activity together with the source of wealth and source of funds, which will also assist in determining the customer risk assessment.

Source of wealth and source of funds are to be considered among the key elements of customer risk assessment and risk management for certain customers. The source of wealth assessment seeks to identify how a customer accumulated their wealth and the source of funds information provides the subject person with the understanding of how and for what purpose the activity will be funded.

We will go through what constitutes source of wealth and source of funds and will provide practical examples on how to determine these as part of the AML requirements.

Both topics will also take into account the new EU AML regulations.

The Speaker

Ariane Azzopardi is a Director within the Quality and Risk Management function. She has over fifteen years’ experience in this field, and is the delegate of the Risk Management Partner at KPMG in Malta. She is involved in the implementation and monitoring compliance with quality and risk management policies and procedures in KPMG in Malta also handling compliance and risk management queries, including those related to the Prevention of Money Laundering and Financing of Terrorism (PMLFT) and ethics and independence. She delivers sessions on PMLFT at the KPMG roundtable and also at various other seminars and conferences.

Ariane is the chair of the PMLFT sub-committee at the Malta Institute of Accountants and a committee member of the PMLFT sub-committee at the Institute of Financial Services Practitioners.