Under New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), businesses must consider risk profiling of their customers and clients. The profiling is for the purpose of identifying those clients that present greater risk to facilitating money laundering and/or financing of terrorism.

One such area of higher risk is when a client falls into the description of a Politically Exposed Person (PEP). A PEP is a person who in any overseas country has a prominent public function. This includes a head of state or head of a country or government, a Supreme court judge or senior judge, a senior foreign representative or ambassador, a high-ranking member of the armed forces, or a CEO of a state enterprise entity. The definition of a PEP also includes an immediate family member, their spouse or close associate. These are some of the definitions, not all.

PEPs are identified by the international watch dog, the Financial Action Task Force (FATF) as having a higher probability of committing an act of corruption due to their position of power or influence.

New Zealand’s legislation only includes a PEP from outside of the country that they govern. This however does not mean businesses within New Zealand cannot include a domestic PEP as a person requiring an extra level of due diligence. In fact, under section 22(1)(d) of the Act, businesses must identify higher risk clients.

Identifying Higher Risk PEPs

Identifying higher risk PEPs requires examining media releases and noting when a PEP has come under adverse media attention.

Judith Collins, the current leader of the National Party, would be one of New Zealand’s highest risk PEPs. This is because Ms Collins has adverse media and has been under investigation for matters of influencing political interest in her husband’s business, as well as leaking privacy information of a public servant to a family friend and well-known cyber bully, Cameron Slater. Ms Collins intended for Mr Slater to harass the public servant on his blog Whale Oil. Mr Slater followed her instructions and ultimately the public servant received death threats with the threats only being removed after police intervention.

To aggravate the situation, Ms Collins at the time was the Minister of Justice and was promoting anti cyber bullies law.

Though Judith Collins admitted her wrongdoing for being a party to cyber-bullying, this did not stop Ms Collins from re-entering cabinet. Should Ms Collins lead New Zealand following the election, this does not remove her status as a higher risk PEP.

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