NOBODY WANTS TO BE A PEP
The news today that two highly regarded businessmen appointed by the government of Belize to the long-dormant Integrity Commission last week have resigned, is the first shot across the bow of corrupt governments in small countries.
The world powers are turning the screws in their quest to exclude small countries such as Belize from the lucrative offshore financial services industry.
So, a raft of rules has been rolled out to make the world a safer place for all of us.
But there is more than meets the eye.
Stringent rules have been introduced to govern the domestic and foreign banking industry.
These rules do not apply to rich countries such as the U.S.A. and Britain - the two largest players in this sector.
Enter the PEP.
A Politically Exposed Person (PEP) is any individual, his family members and associates in a high public office. This includes people such as a prime minister or minister and his relatives. A CEO. A head of a public department. A chairman, member, adviser, auditor, banker of a public board such as Belize Water Services or the Social Security Board.
Anyone in high public office.
Because of the ease with which PEPs can access and manipulate the public purse for their own use, banks now must be extremely wary of dealing with this species.
The fines and penalties are astronomical for non-compliance.
Being black listed by the Financial Action Task Force. Loss of North American and European correspondent banking facilities.
So all banks in Belize now require PEPs to submit detailed information on past and present financial activities.
In the words of a Belizean politician mocking the Financial Action Task Force that has wrought this new order, you need tell what dog you acquired last week and if it has puppies.
Full disclosure is required.
The new PEP rules are going to make life very uncomfortable, even dangerous, for small and medium players.
Businessmen, professionals, academics and others will now never aspire to be a PEP.
It is an intrusion of privacy.
They do not want to be associated with a what could be seen as a corrupt institution.
Big PEPs have seen this coming a long time.
The have made adequate preparations. So they have nothing to worry about.
You can read more about what is a PEP here.http://www.fatf-gafi.org/media/fatf/documents/recommendations/Guidance-PEP-Rec12-22.pdf