On 2 March 2023, the Financial Information Unit (“UIF”) by means of Resolution No. 35/2023 (the “Resolution”) introduced amendments to the regulation on Politically Exposed Persons (“PEPs”), with the aim of bringing the regulatory framework in line with international standards and improving the management of Money Laundering and Terrorist Financing Risks in relation to customers and beneficial owners who are PEPs.
The Resolution came into force on 1 April 2023, on which date Resolution UIF N°134/2018, was repealed.
The Resolution maintains the PEP status for a period of two years and establishes that once this period in the public function is completed, each entity must assess the level of risk of the customer or beneficial owner. The regulated entities must take into account: (i) the relevance of the function performed, (ii) the power to dispose and/or manage funds, (iii) the length of service in the public service.
Another modification introduced by the Resolution refers to the enhanced due diligence actions to be carried out by obliged entities on foreign PEPs, in order to comply with recommendation 12 of the Financial Action Task Force (“FATF”).
Following the FATF recommendations, the cases in which obliged entities must comply with the FATF recommendations are indicated:
- Obtain approval from the Compliance Officer to initiate or maintain business relationships with customers who are PEPs and their beneficial owners, in cases where a business relationship already exists and they change their PEP status.
- Take reasonable steps to establish the source of funds and assets.
- Adopt Enhanced Due Diligence measures in relation to PEP customers and conduct ongoing monitoring of the business relationship.
Each obliged entity must take reasonable steps to verify, in all cases, the PEP status of its customers and beneficial owners.
