What are common Politically Exposed Person (PEP) screening mistakes?

Mistake 1: Not Screening at All

"I trust my clients, I don't need to check"

Problem: PEP screening is legally mandatory. Failure to screen is a compliance breach even if the client turns out not to be a PEP.

Fix: Screen EVERY client, EVERY time. easyAML has PEP screening built into our platform when performing CDD.

 

Mistake 2: Only Screening the Individual, Not Beneficial Owners

"I screened the company director, that's enough"

Problem: The real PEP might be a beneficial owner, not the director. Directors can be nominees.

Fix: Screen all beneficial owners with 25%+ ownership or control.

 

Mistake 3: Not Screening Family Members or Close Associates 

"The client isn't a PEP, so I'm done"

Problem: PEP family members have the same risk profile. Criminals use family members to hide assets.

Fix: Ask about family member and close associate positions. Screen spouse and close family.

 

Mistake 4: Only Screening Once, Never Again

"I screened them 5 years ago"

Problem: People take on new positions. Former non-PEPs become PEPs. Your old screening is outdated.

Fix: Re-screen before significant new transactions.

 

Mistake 5: Poor Quality Screening

"I Googled their name, found nothing"

Problem: Generic Google searches miss a lot. Common names need more context. No database screening for high-risk clients.

Fix: Use easyAML's PEP functionality to check every one of your transactions automatically.

Mistake 6: Not Documenting Screening

"I definitely screened them, I just didn't write it down"

Problem: If you can't prove you screened, AUSTRAC treats it as if you didn't. No records = compliance failure.

Fix: easyAML Keeps records of every screening. Results, notes, dates, and sources used.

 

Mistake 7: Ignoring Positive Matches

"Someone with that name is a politician, but surely not THIS person"

Problem: Assuming it's not the same person without checking. You must investigate matches.

Fix: Compare details (DOB, nationality, photo). Confirm whether it's actually them or just a name match.

 

Mistake 8: Not Applying Enhanced Due Diligence

"They're a PEP but seem legitimate, so I'll just do standard checks"

Problem: PEPs ALWAYS require enhanced due diligence by law. No exceptions for "legitimate" PEPs.

Fix: If they're a PEP, switch to full EDD. No shortcuts.