PEP Risk Watch: Your Guide to Effective Due Diligence & Monitoring of Politically Exposed Persons

10 September 2020 18:22

pep risk guide

In a post-Coronavirus world, the ethical expectations companies face from consumers, investors, third parties and regulators will only increase. This means that companies’ relationships to Politically Exposed Persons (PEPs) will be scrutinized more than ever. Download our step-by-step guide on using Nexis® Solutions technology and data to screen, investigate and monitor PEPs to mitigate risk.

Why the focus on PEPs?

Politically exposed persons, or PEPs, carry a greater risk of bribery and corruption because their prominent role in a country and public function can make them a target for bad actors seeking undue influence. Unsurprisingly, many of the biggest bribery and corruption cases of all time involve PEPs.

For example, Operation Car Wash in Brazil implicated more than 80 politicians and members of the business elite in a kick-back scheme centred around the construction company Odebrecht. This case caused lasting legal, financial, reputational, and strategic damage to Odebrecht. Last year, five years after the investigation into its activities began, Odebrecht filed for bankruptcy protection in Brazil.

It is therefore essential that companies who have PEPs as clients or third parties understand the level of risk they pose before deciding whether to start or continue a relationship with them. How can organisations get a clear understanding of potential risk exposure due to PEPs?

  • Carry out screening and enhanced due diligence on PEPs. This is essential if a company suspects they carry a high risk of bribery and corruption. Nexis Diligence™ lets companies perform ad-hoc, third-party due diligence investigations and generate an audit trail with customized reports.
  • Implement ongoing monitoring of all PEPs a company is involved because a PEP’s public functions or behaviour may change over time. Nexis® Entity Insight allows organisations to quickly establish high-volume, risk monitoring with PESTLE risk-scoring. This automates monitoring, driving efficiencies and cost-savings unmatched by manual research.
  • Integrate PEPs data into proprietary solutions. Nexis® Data as a Service allows you to integrate relevant datasets, including information on 1.4 million PEPs, into your own AI-powered risk management applications.
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