Compliance Officers: Would You Offboard Donald Trump as a Customer?

?? Unpack this week’s edition of Ctrl + Alt + Comply – your dose of news in the tech and compliance landscape. Happy reading!

Over 40 elections are set to take place globally in 2024, creating fertile ground for the potential of bribery, corruption, and money laundering. This is creating significant implications for Politically Exposed Persons (PEP) management, as financial institutions are required to be extra vigilant in their PEP screening processes to identify and mitigate these heightened risks. For our second edition of Ctrl + Alt + Comply, we’ll be digging into Trump, PEPs, and the biggest elections taking place in 2024 – don’t miss out on this read!

To Offboard or Not to Offboard Trump, That Is the Question

Former US President and current Presidential Candidate, Donald Trump would already be considered a PEP, and in a lot of cases be considered High Risk, particularly because he previously held a prominent head of state level position. To give some context, PEPs are individuals who hold or have held prominent positions , such as government officials or high-net-worth individuals. They are generally seen as being at a higher risk of corruption, money laundering, terrorist financing, and bribery because of their power and influence.

But now that Trump has been convicted of 34 felonies , including crimes classified as “Financial Crimes” in any Compliance Adverse Media tool, should a Compliance Officer consider offboarding him when these issues are flagged during ongoing due diligence? We’ll get to it, but first, the landscape is about to change across the world, particularly in the new entrants to heads of state type positions of PEPs.

The Turbulent 2024 Electoral Landscape?

PEP screenings are expected to soar in 2024 in tandem with major elections taking place globally.?

Two of the largest economies in the world, the US and the UK, are set to hold elections in the coming months – which will have crucial implications for financial crime compliance teams who need to manage risks throughout these turbulent periods. Here’s just a peek into the 2024 electoral landscape:?

Mexico

A few days ago, Mexico elected Claudia Sheinbaum as their first female president in a historic landslide win. Given Mexico's ongoing challenges with corruption and organized crime, the transparency and integrity of incoming officials are paramount in shaping the nation's governance and economic stability.

India

Just two days ago, India re-elected Narendra Modi as Prime Minister. Although the result was expected, the Indian PEP landscape shifted significantly with the unexpected gain of seats by the opposing party in the Lok Sabha, India’s lower house of Parliament.

The UK?

The UK general election is being held on the 4th of July. With Parliament dissolved just a few days ago, MEPs have reverted to being ordinary members of the public – some of which may be re-elected again later, posing an interesting question of ‘once a PEP, always a PEP?’.?

The way that PEPs will be scanned, monitored, and treated will be particularly interesting taking into consideration the de-banking of Nigel Farage at the end of 2023 – a scandal that resulted in the resignation of the CEO of Natwest.

The US?

With the US elections upcoming this November, all eyes are focused on the different candidates, especially Trump – whose legal battles and criminal charges add an unprecedented layer of complexity. Despite being found guilty on 34 felony counts, he is still eligible to run for president.?

The EU

We couldn’t write about all the national elections taking place in 2024 without mentioning the pivotal EU elections happening right now. In the largest-ever transnational poll, 720 new members of the European Parliament will be chosen from among the 373 million eligible voters in the European Union between June 6 and June 9. With Qatargate barely out of sight, the integrity of these elections is under even more intense scrutiny.

Tackling Political Risks?

ComplyAdvantage conducted a thorough survey asking C-suite and senior compliance decision-makers how they foresee their organizations’ risk appetites and risk management to evolve throughout 2024 – the results of which indicate two clear trends.?

First and foremost, in the light of major elections and PEP scanning, organizations are more likely to adopt a risk-averse approach, entailing more Enhanced Due Diligence (EDD) and ongoing monitoring processes. Secondly, and as a result of this, organizations anticipate a change in their PEP management, honing in on the need to shift away from more manual processes in response to the sheer volume of PEPs.?

Once a PEP, always a PEP??

Back to the question at hand, should you offboard Donald Trump? Well, it ultimately whittles down to your company and compliance risk tolerance levels. Our advice is to have a diverse and well represented Compliance Committee in your organization that makes the decision, and, of course, keep proper documentation explaining the decision.

It will be interesting to witness how the 2024 electoral landscape will shape the near future of compliance and PEP management – stay tuned for more insights in following editions of Ctrl + Alt + Comply.?

Compliantly Yours,?

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