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Although it is not illegal to do business with SIPs, firms that operate with a high level of internal AML control, or that are concerned about reputational risk, may need to know about this status when entering into a new customer relationship. Like PEPs, firms doing business with a special interest person should consider the issue of relatives and close associates (RCAs) when determining the level of risk they present.
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Who is Considered a Special Interest Person (SIP)?Ī special interest person is similar to a politically exposed person (PEP) and sanctions list individuals because they present an elevated risk of money laundering - in their case, however, this risk is a result of their involvement, or suspected involvement, in crime. In certain circumstances, those high-risk customers are known as special interest persons (SIPs) or special interest entities (SIEs).Īfter verifying the identities of their customers during customer due diligence, firms must perform certain important AML processes, including screening to see if the customer appears on official sanctions lists or if they are a politically exposed person (PEP) and vulnerable to money laundering as a result of their political status.
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That information might include the customer’s political status, references to them in negative news media, their personal or professional connections or their involvement in criminal activity. What is a Special Interest Person (SIP) And Special Interest Entity (SIE)?Īs part of customer due diligence, financial institutions not only work to verify the identities of their customers but examine contextual information in order to establish whether those customers present a higher money laundering risk.