Politically Exposed Person
A Politically Exposed Person is an individual who holds or has held a prominent public function — such as a head of state, senior government minister, senior civil servant, judge, military officer, or senior executive of a state-owned enterprise — and their close family members and known associates. PEPs carry elevated money laundering risk due to their access to public funds or political influence. Since the Financial Services and Markets Act 2023 (s.78) and the FCA's PS24/4 guidance, UK domestic PEPs are by default treated as lower risk than foreign PEPs unless other risk factors apply.
a positive PEP match does not mean refusing to act for a client. It means applying Enhanced Due Diligence, obtaining senior management approval, and conducting more frequent monitoring. For UK domestic PEPs, the EDD bar starts lower than for foreign PEPs — but ongoing monitoring and clear documentation of the risk decision still apply.
Other terms that go with Politically Exposed Person
Enhanced Due Diligence is a more thorough level of client verification required when a relationship presents a higher risk of money laundering or terrorist financing. EDD steps typically include verifying the source of funds, establishing source of wealth, obtaining senior management approval before onboarding, and applying more frequent ongoing monitoring.
Sanctions screening is the process of checking clients, their beneficial owners, and associated parties against official sanctions lists maintained by bodies such as the UK Office of Financial Sanctions Implementation (OFSI), the United Nations Security Council, the European Union, and the US Office of Foreign Assets Control (OFAC). Acting for a sanctioned individual or entity is a criminal offence.
Source of wealth refers to the origin of a client's total net worth or assets — for example, built through a business, inheritance, investments, or professional career. Source of wealth is a broader concept than source of funds and is typically assessed for PEPs and other higher-risk clients as part of Enhanced Due Diligence.
Put Politically Exposed Person into practice with Certivus
Knowing the term is the first step. Certivus gives you the workflows — client intake, CDD, EDD, PEP and sanctions screening, audit-ready records — to apply it across every client.
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