Who or what is a Politically Exposed Person (PEP)?

PEP screening is the process of checking whether your client, their family members, close associates or beneficial owners are Politically Exposed Persons (government officials, judges, military leaders, heads of state organisations). You must screen all new clients before providing services. If you identify a PEP, you need enhanced due diligence, senior management approval, and ongoing monitoring. Missing a PEP can result in severe penalties - it's one of the most common compliance failures.

easyAML will automatically scan databases of PEPs to determine if the client you're dealing with is exposed, flag the client and provide the steps to ensure you stay compliant including source of funds and wealth questionnaires.

PEPs Are High-Risk

PEPs have access to public funds and decision-making power, creating corruption opportunities. Many major money laundering cases involve PEPs moving illicit funds through legitimate businesses.

Example: Foreign minister's official salary is $100K/year, but they've accumulated $15M in assets. You need comprehensive documentation of legitimate wealth sources (family wealth, business interests, etc.)

Red flag: Wealth inconsistent with legitimate income from public position

Who Counts as Family?

Immediate family (automatically PEPs):

• Spouse or de facto partner
• Children (including adult children)
• Parents
• Siblings

Extended family (consider on case-by-case basis):

• Grandchildren
• In-laws
• Step-family
• Cousins (if very close relationship)

Who Counts as a Close Associate?

Business associates:

• Business partners
• Joint venture participants
• Co-directors
• Co-shareholders (significant holdings)
• Professional advisors (if very close relationship)

Personal associates:

• Known close friends
• Long-term advisors
• Individuals benefiting from PEP's position