PEEPing at PEPs
| Published date | 08 May 2009 |
| Pages | 137-143 |
| DOI | https://doi.org/10.1108/13590790910951812 |
| Date | 08 May 2009 |
| Author | George Gilligan |
| Subject Matter | Accounting & finance |
PEEPing at PEPs
George Gilligan
Department of Business Law and Taxation, Faculty of Business and Economics,
Monash University, Melbourne, Australia
Abstract
Purpose – The purpose of this paper is to discuss the subject of politically exposed persons (PEPs)
and some of the major issues associated with them. PEPs as a specific category are receiving increased
attention from governments, law enforcement agencies and international organisations such as the
Financial Action Task Force. An increased academic and theoretical focus upon PEPs is required
because there is considerable uncertainty about the specific definition of PEPs, how precisely they may
be categorised, what the impacts of their activities are and how they might be countered.
Design/methodology/approach – This paper first discusses some of the ambiguities surrounding
the definition of PEPs. The paper then emphasises the unsurprising reality that definitional confusion
regarding PEPs contributes to uncertainty about their incidence and effects. The paper then highlights
some of the key policy challenges in responding to PEPs and provides examples of good and bad
practice in seeking to counter the activities of PEPs.
Findings – The paper concludes that it is important for governments and business organisations to
be proactive about emerging risks relating to PEPs. However, experience suggests that it seems
extremely difficult to segregate political contexts from how the harms and other problems associated
with PEPs might be countered and that political expediency may be a defining overall factor in how
responses to PEPs evolve.
Originality/value – The paper’s originality and value lies in its efforts to link the definitional and
political landscape surrounding the issue of PEPs, and to articulate that progress in the former is
unlikely without open appraisal of the impacts of the latter.
Keywords Politics, Riskmanagement
Paper type Research paper
Introduction
The issue of politically exposed persons (PEPs) is an increasingly high-profile subject
within the financial sector, but with regard to PEPs a substantial problem presents
itself almost immediately. Who or what is a PEP, how does one know when one is
dealing with one and how should the risks of dealing with PEPs be evaluated? It brings
to mind an observation on the nature of pornography by a well-known American jurist,
Justice Potter Stewart of the US Supreme Court, who once famously said of obscene
material that he might not know precisely what it was, but: “[...] I know it when I see
regarding the “peep show” that surrounds PEPs. There are problems of definition for
individuals, organisations and governments regarding PEPs. Numerous definitions
have been put forward, but finding a universally acceptable one has been difficult.
Similarly, it is difficult to ascertain the scale of enforcement activity regarding PEPs as
a distinct category, as there are no specific totals of PEP-related activity provided by
law enforcement agencies. However, there are many sources of information about PEPs
available on the internet, as shown by a Google entry of “Politically exposed persons”
on 6 November 2008 which gave 408,000 results in 0.32 seconds.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1359-0790.htm
PEEPing
at PEPs
137
Journal of Financial Crime
Vol. 16 No. 2, 2009
pp. 137-143
qEmerald Group Publishing Limited
1359-0790
DOI 10.1108/13590790910951812
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