A review has been completed into one of the biggest international crime threats to the island’s reputation.
The island’s Financial Services Authority carried out an exercise between 2021 and 2023 to assess the risks posed to our business sector in connection with foreign Politically Exposed Persons (PEPs).
It tested the strength of measures and controls put in place by firms to reduce PEP-related risks and protect them from abuse by criminals.
PEPs are individuals who may present a higher risk in relation to money laundering and terrorist financing because their position or influence may leave them more exposed to bribery or corruption.
A total of 91 firms provided details via a questionnaire including eight banks, 25 insurance and pensions providers, 33 trust and corporate service providers and 12 fund managers and investment firms.
Risk-based assessments were carried out on 29 of these firms.
Across the 91 firms there were more than 10,000 foreign PEPs.
These included more than 300 heads of state or heads of government, nearly 400 ambassadors or high ranking diplomats, 1,000 senior government officials, over 200 members of parliament, as well as members of the judiciary, high ranking army officers and important party officials.
The largest contingent of foreign PEPs were UK nationals (31%), whereas 27% of the foreign PEPs are resident in the UK.
Second largest were Argentine nationals and residents followed by UAE, South Africa and Bahrain. Other countries included Russia, Nigeria, Zimbabwe and Colombia.
Some firms demonstrated they had good systems and controls in place.
But the review also found cases where firms had no, or inadequate, procedures for managing higher risk PEPs.
This included one firm whose risk appetite was not to have high-risk PEPs, but had them all the same.
Where significant breaches were identified, the cases have been referred to the authority’s enforcement division.