Who counts as a politically exposed person
Directive (EU) 2015/849 lists the functions in Article 3, and the UK's Money Laundering Regulations 2017 carry a matching list (regulation 35).
- Heads of state and of government, ministers and their deputies
- Members of parliament, and of the governing bodies of political parties
- Judges of supreme and constitutional courts, and of other courts of last instance
- Members of courts of auditors and of the boards of central banks
- Ambassadors and high-ranking officers of the armed forces
- Board members of state-owned enterprises, and directors of international organisations
Family members and close associates
Middle-ranking and more junior officials are not PEPs. Family members are the spouse or partner, the children and their spouses, and the parents. Close associates include people who share the beneficial ownership of a company with the PEP.
What firms do about a politically exposed person
Being a PEP is a risk category, not an accusation. A firm first needs a way to find out whether a customer or a beneficial owner is one, usually by screening names against lists.
For a relationship with a PEP, EU and UK law then require senior management approval, adequate measures to establish the source of wealth and the source of funds, and enhanced ongoing monitoring (Article 20, and regulation 35). The measures continue for at least 12 months after the person leaves office.
In the UK, since 10 January 2024, the starting point is that a domestic PEP presents a lower risk than a non-domestic one. From 10 July 2027, the EU's AML Regulation applies the three measures to occasional transactions as well (Article 42).
PEP or sanctioned person?
- Sanctioned person
- Named on a legal list, and dealing with them is prohibited. A PEP may be served, with more scrutiny.
- Domestic and foreign PEPs
- The FATF's glossary defines the two separately. The EU directive treats them alike, and UK law lowers the starting risk for domestic ones.
Where a politically exposed person shows up in a platform
Modules that do the work
- KYC / AMLIdentity checks, screening and ongoing monitoring, with the verification provider you choose.
- Compliance reportingTransaction monitoring, the Travel Rule and regulatory reports, ready for your regulator.
- BackofficeOne console to run the platform: customers, money, risk, content and staff permissions.
Platforms that need it
Where it is written
The laws and standards this page's facts come from.
- Directive (EU) 2015/849, the Anti-Money Laundering Directive, consolidated (EUR-Lex)
- Money Laundering Regulations 2017 (legislation.gov.uk)
- Regulation (EU) 2024/1624, the AML Regulation (EUR-Lex)
- FATF Glossary: politically exposed persons
General information, not legal advice: what applies to you depends on your services and your market.