PEP: Politically Exposed Person

A Politically Exposed Person (PEP) is an individual who holds or has held a prominent public function. PEPs present higher risk for potential involvement in bribery and corruption due to their positions of influence.

Who Qualifies as a PEP

Domestic and Foreign PEPs

Heads of state and government
Senior politicians and party officials
Senior judicial officials (Supreme Court, constitutional court)
Senior military officials
Executives of state-owned enterprises
Senior central bank officials

PEP Family and Associates

FATF guidance extends PEP status to:

Family members: Spouse, parents, children, siblings
Close associates: Known business partners, joint beneficial owners

PEP and KYB

For KYB, PEP screening covers beneficial owners, directors, and authorized signers. If any are PEPs, the relationship typically requires:

Enhanced Due Diligence: Higher corruption risk

Senior management approval: Elevated decision authority

Source of funds verification: Ensure legitimate origin

Closer ongoing monitoring: Detect suspicious activity

PEP Status Doesn't Mean Rejection

PEP status doesn't preclude a relationship—it requires heightened scrutiny. Many PEPs are legitimate customers. The goal is proportionate risk management, not blanket exclusion.