{"id":10747,"date":"2025-12-18T11:40:31","date_gmt":"2025-12-18T11:40:31","guid":{"rendered":"https:\/\/www.amlcc.com\/?p=10747"},"modified":"2025-12-16T11:48:26","modified_gmt":"2025-12-16T11:48:26","slug":"whats-a-pep","status":"publish","type":"post","link":"https:\/\/www.amlcc.com\/sg\/whats-a-pep\/","title":{"rendered":"What\u2019s a PEP?"},"content":{"rendered":"\n

What\u2019s a PEP?<\/h1>\n\n\n
\"Richard<\/div>
Richard Simms<\/span>

Director and Founder of AMLCC and AMLCC Consult<\/h3><\/div><\/div><\/div><\/div>\n\n\n
\"What<\/figure><\/div><\/div>\n\n\n\n
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A politically exposed person (PEP) is someone who holds, or has held, a prominent public function. Because these individuals have access to power, influence and public funds, they can pose a higher inherent risk of money laundering, corruption or bribery. <\/p>\n\n\n\n

The Money Laundering Regulations 2017 (as amended) (MLRs) require regulated professionals to identify PEPs, assess the risks they present and apply enhanced due diligence<\/a> when necessary.<\/p>\n\n\n\n

Who is considered a PEP?<\/strong><\/strong><\/h2>\n\n\n\n

The Regulations define a PEP as an individual entrusted with prominent public functions, plus their immediate family members and known close associates. Examples include senior politicians, members of parliament, judges, ambassadors, military officials and executives of state-owned enterprises.<\/p>\n\n\n\n

This definition applies to both domestic and non-domestic PEPs. Following the new rules on UK PEPs<\/a> that took effect in January 2024, you\u2019re now asked to assume that UK PEPs automatically carry a lower starting risk than foreign PEPs. But they are still PEPs. And the requirement to apply enhanced due diligence has not been removed. Instead, regulated firms must take a proportionate, risk-based approach.<\/p>\n\n\n\n

Why PEPs matter for AML<\/strong><\/span><\/p>\n\n\n\n

Regulated firms act as gatekeepers to the financial system. For any client with political influence, there is a greater risk that criminal funds could flow through legitimate services.<\/p>\n\n\n\n

This is why PEP identification sits at the heart of your customer due diligence (CDD). It ensures you understand who the client is, how they built their wealth and whether the relationship is appropriate in the circumstances.<\/p>\n\n\n\n

What due diligence is required?<\/strong><\/h2>\n\n\n\n

When you identify a PEP, family member or close associate, you must apply enhanced due diligence (EDD). Under Regulation 35 of the MLRs, this might include:<\/p>\n\n\n\n