Frequently asked questions
What is AML PEP screening?
PEP stands for “politically exposed person” and refers to those in positions of power or entrusted with high-value public functions. Given their widespread influence, additional identity verification and screening is required under anti-money laundering (AML) regulations to ensure requested transactions or activities are not tied to corruption or money laundering.
What is PEP in background checks?
A PEP background check looks to determine if prospective customers are politically exposed persons (PEPs) based on their role in governments or other public agencies. Conducting these background checks is part of robust due diligence under KYC/AML frameworks.
How do you determine if someone is a PEP?
The definition of a PEP varies from country to country. That said, many countries base their PEP regulations on the standard set by the Financial Action Task Force on Money Laundering (FATF) in 2003.
Generally speaking, PEPs are people in positions of substantial power or influence, along with their close business associates and immediate family members. For example, the U.S. Secretary of State is considered a PEP, along with their parents, siblings, children, and spouse. PEPs also include close contacts within the government and anyone who conducts substantial amounts of transactions on their behalf.
How long is a person considered a PEP?
There’s no set time frame defining how long a person remains a PEP. Well-known, high-risk PEPs may keep their status for life, while others are declassified after some time has passed. Most countries agree it should be at least 12 to 18 months after they leave office. Close associates should be considered a PEP for as long as the relationship continues.