Who or what is a Politically Exposed Person (PEP)?
Politically Exposed Persons (government officials, judges, military leaders, heads of state organisations) have access to public funds and decision-making power, creating corruption opportunities.
Overview
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 a PEP?
The following PEP Occupation Categories (with examples of the the types of roles) are available:
Heads & Deputies, State/National Government
Presidents, premiers, chancellors, prime ministers, royal heads of state, and their deputies.
National Government Ministers
A country's government ministers (e.g., Finance, Foreign Affairs, Defence).
Members of the National Legislature
Members of national legislative bodies, whether unicameral, bicameral, or tricameral (e.g., UK House of Commons and Lords; US House and Senate; Russian State Duma and Federal Council).
Senior Civil Servants – National Government
Top tier of the national civil service plus the next level down (e.g., UK Permanent Secretary and Director General; German Staatssekretär; US Deputy Secretary). Generally includes deputy ministers. Where only news coverage is available, suitably senior individuals are included.
Senior Civil Servants – Regional Government
Uppermost levels of regional civil service (titles vary: State Secretary, General Secretary, Director). Not all countries have a regional civil service, so not all will have entries.
Embassy and Consular Staff
Top two positions at foreign missions and the top consular post: Ambassador, Deputy Head of Mission, Chargé d'Affaires, Consul General. Includes Permanent Representatives to the UN and other international bodies. Honorary Consuls excluded.
Senior Members of the Armed Forces
Top army, navy, and air force post holders (e.g., Chief of General Staff, Deputy Chief of Staff, Commander), following each country's force structure. Role often matters more than rank.
Senior Members of the Police Services
At minimum, the national police chief and regional force chiefs; broader coverage where information allows.
Senior Members of the Secret Services
Senior intelligence community members as available in directories, press, or government sources. Few entries expected per country given the nature of the role.
Senior Members of the Judiciary
Judges from a country's highest courts (supreme, high, constitutional).
State Corporation Executives
Senior executives and all board members of non-subsidiary corporations majority-owned by national government in key industries. Carry a "Board Member" description.
State Agency Officials
Top officials at main state agencies, including central banks, financial supervisors, and other regulators.
Heads & Deputy Heads of Regional Government
Regional prime ministers, presidents, premiers, governors, chief ministers, and their deputies.
Regional Government Ministers
Ministers in regional governments, where these exist. Not populated for all countries.
Religious Leaders
Leaders of major faith traditions.
Political Party Officials
Leaders, deputy leaders, directors, and national council/executive/board members of parties with national parliamentary representation.
International Organisation Officials
Leaders and senior officials of international organisations (e.g., UN, EU, OAS, ASEAN, WTO, NATO).
City Mayors
Mayors of capitals, regional capitals, and cities over 100,000 population.
Political Pressure and Labour Group Officials
Leaders and senior officials of major interest groups influencing public policy (e.g., national labour groups, trade unions, employers' associations).
Other
Country-specific senior roles with no global equivalent (e.g., tribal chiefs; power brokers in unrecognized territories such as the Nagorno-Karabakh Government in Azerbaijan).
Local Public Officials
Officials defined by national PEP regulations but outside other categories (e.g., Members of Regional Parliaments, Members of Local Councils). Only populated where national regulations define such roles.
International Sporting Organisation Officials
Senior IOC officials and executives of international bodies for official Olympic sports (e.g., FIFA, FIBA, International Golf Federation). Coverage began January 2012.
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