PEP (Politically Exposed Person)

An individual entrusted with prominent public functions, plus their immediate family members and close associates, designated under FATF (Financial Action Task Force) Recommendations 12 and 22 for enhanced due diligence by financial institutions and designated non-financial businesses. Categories typically include heads of state and government, senior politicians, senior judicial and military officials, senior executives of state-owned enterprises, and senior officials of international organisations. Banks must apply enhanced KYC, source-of-funds and source-of-wealth verification, and ongoing monitoring; PEP status does not imply wrongdoing but elevates compliance scrutiny. PEP status is highly relevant in citizenship-by-investment due diligence — most CBI programmes screen against PEP databases (World-Check, LexisNexis, Dow Jones Risk & Compliance) at intake. Status typically extends 12 months past the official's term in the EU, and indefinitely under some national rules.