Version 1.0
Prepared by: @Peggy Knowles
Approved by: @Amaechi Azikiwe
Approved date: 2026-03-17 (TBC)
Next review date: 2027-03-17
To establish a risk-based framework for onboarding Politically Exposed Persons (PEPs) in compliance with Bahamian AML/CFT laws and regulatory guidance. This procedure helps mitigate the risks of money laundering, bribery, corruption, and reputational damage associated with high-profile individuals.
This SOP applies to all intake staff, Loan Officers, the Money Laundering Reporting Officer (MLRO), and Senior Management. It covers the identification, risk rating, approval, and ongoing monitoring of all PEP relationships.
A PEP status must be assessed at onboarding and monitored on an ongoing basis. Definitions include:
Domestic PEPs: Current or former senior public officials in The Bahamas.
Foreign PEPs: Individuals holding prominent public positions in foreign governments.
International Officials: Officials of international organizations.
High-Level Positions: Individuals in government, military, or judiciary roles.
Associates: Immediate family members or close professional/personal associates of the above.
Loan Officer: Conducts initial screening and standard KYC collection.
MLRO: Overviews PEP relationships, conducts Enhanced Due Diligence (EDD), and reports to the Board.
Senior Management: Responsible for final approval of any PEP relationship.
Operations Manager: Maintains the active list of PEPs for Board reporting.
5.1.1. Standard KYC: Collect valid ID (NIB, Passport, etc.), proof of address, employment details (Job Letter/Pay Slip), and source of funds/wealth declarations.
5.1.2. Screening: Screen all applicants and beneficial owners against:
Official Sanctions Lists (e.g., OFAC).
Adverse Media (Google, Social Media: Facebook, Instagram, Tabloids).
5.1.3. Escalation: If an applicant is flagged as a PEP, automatically escalate to Enhanced Due Diligence (EDD).
5.2.1. Classification: All PEPs are automatically classified as High Risk.
5.2.2. Risk Factors: Document a risk assessment considering:
Position held and level of influence.
Nature of facility (Note: Maximum lending is $30,000.00).
Transparency of source of wealth.
EDD must be completed prior to credit approval:
5.3.1. Court Checks: Search Bahamian court records for any pending legal matters.
5.3.2. Background Review: Evaluate allegations of corruption, criminal investigations, or regulatory actions.
5.3.3. Reporting: Escalate all material findings to the MLRO.
No funds may be disbursed to a PEP without Senior Management approval, which must confirm:
Relationship establishment and risk rating.
Review of the complete EDD file.
Conditions for annual monitoring.
5.5.1. Annual Re-screening: Minimum once per year.
5.5.2. Delinquency: Monitor strictly for payment delays or changes in employment.
5.5.3. Event-Driven Review: Re-assess if the PEP is appointed to a new role or if media exposure changes.
If suspicion of money laundering or corruption arises:
6.1. Filing: File an STR with the Financial Intelligence Unit (FIU) of The Bahamas.
6.2. Confidentiality: Do not notify ("tip off") the customer. Ensure all reports are kept in restricted, confidential files.
7.1. Record Retention: Maintain all PEP records (ID, EDD, Approvals) for a minimum of five years in secured, restricted-access storage.
7.2. Board Reporting: The Board will receive a list of active PEPs and risk trends via the Operations Manager/MLRO quarterly.
7.3. Training: Staff must undergo annual AML/CFT training covering PEP identification, risk indicators, and the three stages of money laundering.
Wealth is inconsistent with the known salary/position.
Pressure to expedite loan approvals.
Unusual collateral arrangements or politically connected guarantors.
Approved By: ____________________ Date: __________
MLRO Review: ____________________ Date: __________