JP Morgan, the US financial services entity, is allegedly closing the bank and credit card accounts held by non-domestic politically exposed persons (“PEP“) in the US in order to contain the risks and the costs of compliance with anti-money laundering law in respect of PEPs.
At least 3,500 foreign accounts held in the US at JP Morgan will be affected, however that number is likely higher because the majority of PEPs are not recognized as such.
In the US, a PEP is a current or former senior political official who is foreign and includes their immediate family (spouse, girlfriend/boyfriend (even if married), parents, children, in-laws) and close associates.
A political official is a person who holds a significant position in the executive, legislative, administrative, military or judicial branches of government and extends to include officials of major political parties and senior executives of government owed or controlled corporations and agencies in another country.
A close associate is a person who has close ties to the public official in a business, advisory or personal capacity. They are included as a category because of the concern that they exert influence over the public official or can be used as a facilitator of money laundering and asset removal.