Politically exposed personPEP

Someone in a prominent public role, or close to one.

Examples include a head of state, a government minister, a senior judge, or a close relative or associate of someone in such a role.

An individual entrusted with a prominent public function, such as a head of state, senior official, or judge, plus their close associates and family. Most regimes keep the designation active for a set period after the person leaves office.

PEPs are often grouped by where they hold office:

• Domestic PEPs hold prominent public functions in the institution's own country.
• Foreign PEPs hold them in another country.
• International organization PEPs hold senior roles in bodies such as international organizations.

The category also reaches people close to them:

• Family members, such as spouses, children, and parents.
• Close associates, such as known business partners.

PEP screening typically works like this:

1. The institution checks customers and related parties against PEP databases.
2. A match raises the customer's risk rating.
3. The institution applies enhanced due diligence, such as source of wealth checks and senior approval.
4. It monitors the relationship more closely.

A PEP sits next to terms that are easy to mix up:

• Enhanced due diligence (EDD) is the deeper review that a PEP designation triggers.
• Adverse media screening looks for damaging news about a person, which supports PEP reviews.
• Watchlist is any list that screening checks, and PEP lists are one kind.

For more, see What is a Politically Exposed Person (PEP)?