A PEP is an individual entrusted with prominent public functions — politicians, senior public servants, judges, military leaders, senior executives of state-owned enterprises, and their family members and close associates. The AML/CTF Rules require enhanced due diligence on foreign PEPs and a risk-based approach to domestic PEPs.
Foreign vs domestic
Foreign PEPs always trigger enhanced due diligence: senior management approval, source-of-funds enquiry, and ongoing enhanced monitoring. Domestic PEPs trigger the same controls only where the relationship presents elevated risk — which is your judgement call, documented.
Handling a positive match
- Confirm it's a true match — name-only hits are common false positives.
- Document the source of the match and the date.
- Apply EDD if foreign or risk-elevated; document the rationale if no further action.
- Schedule periodic re-screening — PEP status changes.