Working with Politically Exposed Persons (PEPs)

Houses of parliament

A Politically Exposed Person (PEP) is an individual who may have been entrusted with a high-position by a community institution, an international body or state, within the last 12 months. These people are more susceptible to being involved in bribery and corruption due to their public position or function. 

Who is a PEP?

Anyone in these positions would be considered a politically exposed person:

  • Members of Parliament
  • Members of supreme courts, constitutional courts or high-level judicial bodies
  • Heads of state, heads of government, ministers, and deputy or assistant ministers
  • Members of courts of auditors or of the boards of central banks 
  • Ambassadors and high-ranking officers in the armed forces 
  • Members of the administrative, management or supervisory bodies of state-owned enterprises 

PEPs also include the person’s close family members, business associates, and other beneficial owners of the person’s property. 

They typically have more opportunity to acquire assets and funds through unlawful means such as bribery and corruption. This therefore increases the potential to launder these ill-gotten funds.

A PEP is not just high risk when they are active within their position, they may still pose some risk once they have left office by remaining a target. It is for this reason that continued due diligence is wise in order to ensure risk is managed.

A full list of the roles considered to be high-profile under The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 can be found on

Why is PEP screening so important?

Research has shown that there are approximately one trillion dollars worth of bribes processed each year, with this amount of corruption predicted at around 2.6 trillion dollars. 

The importance of identifying politically exposed persons is so that financial institutions can monitor their activity and, in doing so, identify people that are most high-risk and prevent them from being involved in crime. Financial institutions are required to have complete and current data records so that the databases used for PEP screening contain sufficient identification data.

The minimum information required by financial institutions for a thorough PEP screening involves: 

  • Full name
  • Gender 
  • Date of birth or year 
  • Country of political exposure
  • Politically exposed roles, appointment dates, and years
  • The date PEP left their post

When onboarding, PEP screenings should be carried out during the customer’s first engagement period as part of Know Your Customer (KYC) onboarding process. The responsibility of identifying PEPs lies with the business that is in direct contact with the customer, and must be included in the CDD processes. Ongoing monitoring is critical for your compliance and should be undertaken to protect your business from money laundering and other financial crimes under 6AMLD.

Should I avoid working with PEPs?

The increased risk that a PEP may pose means that a higher level of scrutiny is required as part of your due diligence processes, but that does not make it necessary to avoid working with them altogether. 

The Financial Conduct Authority (FCA) expects regulated businesses to use information that is reasonably available to help you identify PEPs, including:

  • Public domain information, such as parliament and government website reliable 
  • Public registers, such as the Companies House
  • Reputable commercial databases that include lists of PEPs, their family and known close associates

It is crucial that financial institutions and regulated businesses are aware of an individual’s standing in public office, as well as having the correct controls and procedures in place to identify and mitigate any risks.

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