What is a PEP, and how do I check for one?
Politically exposed persons, their relatives and close associates — and what enhanced scrutiny means.
Executive summary
PEP status is a risk signal, not an accusation.RCA links matter as much as the named official.The office makes the determination; screening only informs it.A politically exposed person (PEP) holds, or has held, a prominent public function — a minister, senior official, judge, senior military officer, or a director of a state-owned company. The definition extends to immediate family members and known close associates.
Being a PEP is not an accusation; it signals a higher corruption and bribery risk, which the law answers with enhanced due diligence: senior-management approval to enter the relationship, establishing the source of wealth and funds, and closer ongoing monitoring.
Checking means screening the client against PEP data and recording the result — including a clean result. A platform that re-screens automatically and keeps the dated evidence turns a recurring manual chore into a by-product of normal work.
Who this applies to
This guide is for offices that must identify politically exposed persons, family members and close associates before accepting or continuing a relationship.
- Clients and beneficial owners
- Directors, representatives and persons controlling the client
- Immediate family members of a PEP
- Known close associates and business partners
- Former PEPs where local rules or risk still require enhanced monitoring
Legal and supervisory context
A PEP has or had a prominent public function. That can include ministers, parliamentarians, senior judges, senior military officers, central-bank officials, ambassadors and senior management of state-owned enterprises. The reason for enhanced due diligence is exposure to bribery, corruption, misuse of public funds or pressure on the office.
The distinction Sceau uses is deliberately careful: open-source and licensed signals inform a PEP determination decision. They are not themselves the legal determination. The obliged entity records the conclusion, its reasoning and the EDD steps it performed.
What the office must actually do
When a PEP or RCA signal appears, the office should not panic and should not ignore it. It should document the role, relationship, geography, source of wealth, source of funds and senior approval.
- Screen clients, representatives and UBOs at onboarding.
- Record whether the match is true, false or needs review.
- Establish source of wealth and source of funds for true PEPs.
- Get senior-management approval before acceptance where required.
- Increase review frequency and transaction monitoring.
- Re-screen when lists or client facts change.
What good evidence looks like
The file should show the matched person, the public function or relationship, the office's determination, the EDD measures, the approving person and the date of approval.
Common mistakes supervisors find
- Treating a PEP match as automatic rejection.
- Ignoring relatives and close associates.
- Failing to document source of wealth separately from source of funds.
- Using open-source signals without recording the human determination.
- Screening only once at onboarding.
Practical checklist
- Screen the client and UBOs.
- Resolve false positives.
- Record PEP/RCA role and country.
- Document source of wealth and funds.
- Obtain senior approval where required.
- Set enhanced review cadence.
- Keep dated screening evidence.
- Labels the signal layer clearly.
- Keeps the PEP determination as a human decision.
- Links EDD tasks to source-of-wealth and source-of-funds evidence.
- Re-screens on list updates.
- Seals the approval record for inspection.
FAQ
Is every PEP high risk?
Not automatically, but every true PEP requires enhanced due diligence and a documented risk decision.
Can open-source screening be used?
Yes as a signal layer, provided the office is clear that it informs, rather than replaces, the regulated determination.
What is the difference between wealth and funds?
Source of wealth explains how the person became wealthy overall. Source of funds explains the money used in the specific matter.
Official references
From knowledge to compliance
Reading is a start. Sceau turns these obligations into a workflow that runs itself and proves itself.
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