PEPs Face Scrutiny Under U.S. Money Laundering Laws

Via Reuters...

"It's easy enough, following the Riggs bank money laundering scandal, to know what a banker should do if a retired Chilean dictator named Augusto Pinochet pops in to open an account. But what if a potential client's surname is Clinton, or Bush? Under U.S. money laundering and banking secrecy laws, so-called Politically Exposed Persons, or PEPs, who are in positions of political influence and might conceivably have their hands in the cookie jar, can only be foreigners. The laws require banks to subject PEPs, their relatives and associates -- including mistresses or lovers -- to increased scrutiny to ensure their wealth does not come from corruption. Despite entreaties from banks, however, the U.S. government has resisted drawing up a definitive list of PEPs. Failure to conduct "due diligence" can result in big trouble, as Washington-based Riggs National Corp. found when it was fined $16 million in January for helping Pinochet move millions of potentially illicit dollars around the world."

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-- MDT