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  • FC-1.5 FC-1.5 Enhanced Customer Due Diligence: Politically Exposed Persons ("PEPs")

    • FC-1.5.1

      Conventional bank licensees must have appropriate risk management systems to determine whether a customer is a Politically Exposed Person ('PEP'), both at the time of establishing business relations and thereafter on a periodic basis. Licensees must utilize publicly available databases and information to establish whether a customer is a PEP.

    • FC-1.5.2

      Conventional bank licensees must establish a client acceptance policy with regard to PEPs, taking into account the reputational and other risks involved. Senior management approval must be obtained before a PEP is accepted as a customer.

    • FC-1.5.3

      Where an existing customer is a PEP, or subsequently becomes a PEP, enhanced monitoring and customer due diligence measures must include:

      (a) analysis of complex financial structures, including trusts, foundations or international business corporations;
      (b) a written record in the customer file to establish that reasonable measures have been taken to establish both the source of wealth and the source of funds;
      (c) development of a profile of anticipated customer activity, to be used in on-going monitoring;
      (d) approval of senior management for allowing the customer relationship to continue; and
      (e) ongoing account monitoring of the PEP's account by senior management (such as the MLRO).

    • FC-1.5.4

      "Politically Exposed Persons" means individuals who are, or have been, entrusted with prominent public functions in Bahrain or a foreign country, such as Heads of State or government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations or important political party officials. Business relationships with family members or close associates of PEPs involve reputational risks similar to PEPs themselves. The definition is not intended to cover middle-ranking or more junior officials in the foregoing categories. Bahraini PEPs would include all Ministers, all MPs, and all Ministry officials with the rank of Undersecretary or above.