Process Overview
For each client identity verification, we will:
Automatically screen client details against current PEP and Sanctions lists
Flag any potential matches for compliance review
Conduct enhanced due diligence on flagged matches
Contact clients if additional information is required
Complete verification once screening is resolved
Important: This screening is a legal requirement under Australian AML/CTF laws. Being flagged does not imply wrongdoing.
Understanding Sanctions
What Are Sanctioned Entities?
Sanctions are restrictive measures imposed by individual countries (such as Australia) and intergovernmental bodies (like the United Nations) on specific organisations or individuals.
Why Sanctions Are Imposed
Sanctions address situations of international concern including repression of human rights or democratic freedoms, proliferation of weapons of mass destruction, and internal or international armed conflict.
Types of Sanctions
Sanctions are measures "not involving the use of armed force" (UN Charter, Article 41) and may include restrictions on economic relations and activities, restrictions on goods and services, and restrictions on transactions with specific entities or individuals.
Legal Implications
Penalties for Contravening Australian Sanctions Laws:
Individuals: Up to 10 years imprisonment and substantial fines
Corporate entities: Significant financial penalties
Application of Australian Sanctions Laws:
All activities conducted within Australia
Australian citizens operating overseas
Australian-registered corporations operating overseas
Note: Activities may also be subject to sanctions laws of other countries. Clients should seek legal advice to ensure full compliance with all applicable regulations.
Additional Information: Australian Sanctions Guidance
Understanding Politically Exposed Persons (PEPs)
What Are PEPs?
A Politically Exposed Person (PEP) is an individual who has been entrusted with a prominent public function. This classification is used in the financial services industry for financial crime prevention.
Who Qualifies as a PEP?
PEPs may include members of cabinets and parliaments, senior public servants and military personnel, managers of state-owned companies, other individuals holding prominent public positions, and family members and close associates of PEPs.
Important Clarification
Being classified as a PEP does not imply any wrongdoing or misconduct. The classification exists because PEPs and their family members are subject to enhanced public scrutiny under financial crime laws. Enhanced due diligence on PEPs is mandated by Australian AML/CTF legislation.
PEP Categories and Risk Treatment
Not all PEPs carry the same level of risk under Australian AML/CTF law. The three categories and their required treatment are:
PEP Category | Risk Classification | EDD Automatically Required |
Foreign PEP | Always HIGH risk | Yes — mandatory for all |
Domestic PEP | Risk-based assessment | Only if assessed high risk |
International Organisation PEP | Risk-based assessment | Only if assessed high risk |
International Organisation PEPs
Under the AML/CTF Rules 2007 (Rule 1.2.1(5)), an "international organisation" must be established by formal political agreement between two or more countries with the status of an international treaty, and recognised in the law of its member countries. This excludes NGOs, multinational corporations, and private international bodies. Qualifying examples include the United Nations, WTO, NATO, IMF, World Bank Group, and regional development banks.
PEP status applies to senior positions within these organisations — board chairs, chief executives (Director-General, Secretary-General, or equivalent), chief financial officers, comparably influential roles, and senior judicial roles at international courts such as the ICJ or ICC. It also extends to immediate family members (spouse, de facto partner, children and their partners, parents) and close associates with beneficial ownership arrangements connected to the PEP. Standard employees and contractors do not qualify unless holding one of these prominent positions.
Risk Treatment
Unlike foreign PEPs — who are always treated as high risk — international organisation PEPs require a risk-based assessment. EDD is only triggered where that assessment identifies elevated ML/TF risk, considering factors such as the nature of the role, jurisdiction connections, and transaction patterns. Low-to-medium risk cases are subject to standard customer identification procedures. Applying blanket EDD regardless of risk constitutes over-compliance and is contrary to FATF guidance.
Where a high-risk determination is made, EDD obligations under AML/CTF Rules 2025 (sections 6-21, 6-23, 6-24) include senior management approval before or during service provision (with documented rationale), source of wealth and source of funds verification through reliable independent documentation, and enhanced ongoing transaction monitoring for unusual, large, or high-risk-jurisdiction-related activity.
Support & Questions
For questions about the VerifiMe PEP and Sanctions screening process:
Contact: VerifiMe Support Team Email: [email protected]
Disclaimer
This guide provides general information only and does not constitute legal or compliance advice. As individual circumstances vary and regulations may change, clients are encouraged to seek independent legal or professional advice regarding their specific obligations.