Using Asset Disclosure for Identifying Politically Exposed Persons

Aiming to promote greater transparency and accountability, numerous countries have introduced the requirement for public officials to file asset disclosures.

In parallel, efforts to curb money laundering and the plunder of state assets have resulted in greater scrutiny of financial relationships with politically exposed persons (PEPs).

The fight against corruption has led to the introduction of a series of innovative approaches; however, their implementation is never free of challenges and complementarities and potential synergies are still to be explored.

This paper analyzes how the information on asset disclosure could be used to support the identification of PEPs and provides a series of recommendations that can help support this use.

Recommendations

• To be useful for identifying PEPs, a list of public officials required to file asset disclosures needs to contain, at a minimum, the position held by each official, as this would help in determining whether the official is indeed a PEP. Including other identifying information—such as date of birth, national identification number, and information on family members—would further serve this purpose.
• Jurisdictions should consider designating an institution with clear responsibilities for compiling, maintaining, and updating the list of filers and sharing it with the relevant stakeholders.
• Jurisdictions should also consider facilitating access to the list of filers, and eventually to the information in the disclosures, for relevant government agencies and financial institutions to support their work related to identifying PEPs and complying with PEP requirements.
• Information on who files disclosures should be as user-friendly as possible. This implies, when feasible, making it publicly available online and in a searchable format. Online availability grants easy access. A format that allows searching—for example, by the official’s name or position— ensures user-friendliness. The ability to search a list becomes especially important when the list includes thousands of names, as is often the case in the more populous jurisdictions requiring disclosure.
• To ensure the use of asset disclosure for identifying PEPs, stakeholders need to develop effective channels for cooperation among domestic agencies and with foreign counterparts. Developing international cooperation on asset disclosure is certainly the biggest challenge. This is likely to require a gradual approach. It could begin with building links with the more obvious counterparts (foreign agencies with which there is a repeated need to exchange information) and potentially evolve into a regional or international network of formal exchange.
• In all cases stakeholders need to recognize that the list of those required to file asset disclosures in a jurisdiction is not the same thing as a list of PEPs for that jurisdiction (asset disclosure requirements might extend beyond the definition of PEPs or might not cover some PEPs). So even if they have a list of filers, they still need to take complementary measures to identify PEPs.