The 'Politically Exposed Person' Status - Part 3

09 June 2016

Removing or altering your status with third party politically exposed persons, sanctions databases and media outlets, should not be the end game. It is simply another ‘fire’ that has been extinguished. The objective is to create a sustainable long-term reputation strategy which allows you to conduct your business affairs in a smooth and timely manner.  

Where allegations or assertions are complex, and interwoven with aspects of truth it may be advisable to put together an advocacy document which either refutes or contextualises the allegations. This can be disseminated to a broad audience with the help of your PR advisors or to selected advisors or counter-parties when required under an non-disclosure agreement (NDA).

If guidance is required on what issues need addressing, the Financial Action Task Force has a very useful list of indicators which may be relied on by financial institutions or due diligence providers. This list which comprises 66 factors is a valuable point of reference from which one can identify the likely issues a bank or counter party may raise.

The indicators range from factors around the rationale behind corporate structures, a client’s behaviour, the degree of control they exert, the sectors of industry they are involved in, their transaction history and geographic risk factors.

The extent to which each of these factors is important will change, and will be heavily influenced by the current macro-economic and political climate. This can be addressed by layering a reputation strategy over your five year business plan, and incorporating reputational resilience into your everyday business decisions. With the right approach, the number of ‘fires’ you need to put out should diminish over time.  

The first step is to understand what content is being funnelled into the compliance industry databases and being vigilant to prune that which is inaccurate or out of date. It is worth revisiting this on an annual basis – and certainly in advance of any upcoming financing agreements or business deals. Databases can only provide a snapshot of your risk to a bank; you will need to help provide the context and analysis. By factoring this into the deal process, and using the right tools and strategies, a politically exposed person status need not be a damaging one.

To read part one of this politically exposed person series, click here.

To read part two of this politically exposed person series, click here.

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About the Author

Juliet Young


Juliet draws on over 15 years of experience in the corporate investigations and intelligence field to help clients solve reputation management and privacy problems.

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