Skip to content
English
Back to the main page
  • There are no suggestions because the search field is empty.

Politically Exposed Person (PEP)

A Politically Exposed Person (PEP) is a natural person who is or has been entrusted with a prominent public function. Under FATF guidance and EU anti-money-laundering rules, PEPs are treated as higher-risk customers for corruption-related and money-laundering risks, which means firms should apply enhanced due diligence rather than automatically refusing the relationship.

Official classifications generally distinguish three categories of PEPs:

  • Foreign PEPs: persons entrusted with prominent public functions by a foreign country, such as heads of state or government, senior politicians, senior judicial or military officials, senior executives of state-owned enterprises, and important political party officials.
  • Domestic PEPs: persons entrusted with prominent public functions within their own country.
  • International organisation PEPs: persons entrusted with a prominent function by an international organisation, typically members of senior management such as directors, deputy directors, or board members.

Official rules also extend PEP-related scrutiny to immediate family members and persons known to be close associates of a PEP, because these individuals may be used to hold assets, conduct transactions, or maintain business relationships connected to the PEP.