Who is PEP - legal definition of PEP

In United Kingdom the legal definition of the Politically Exposed Person could be found in The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, published in 2017 No. 692. Politically exposed person aka PEP means an individual who is entrusted with prominent public functions, other than as a middle-ranking or more junior official 35(12), which is a definition adopted from UE Regulations in this matter.

The definition from EU Fourth AML Directive is exactly the same list of functions and public positions:

Politically exposed person’ means a natural person who is or who has been entrusted with prominent public functions and includes the following:
(a) heads of State, heads of government, ministers and deputy or assistant ministers;
(b) members of parliament or of similar legislative bodies;
(c) members of the governing bodies of political parties; (d) members of supreme courts, of constitutional courts or of other high-level judicial bodies, the decisions of which are not subject to further appeal, except in exceptional circumstances;
(e) members of courts of auditors or of the boards of central banks;
(f) ambassadors, chargés d'affaires and high-ranking officers in the armed forces;
(g) members of the administrative, management or supervisory bodies of State-owned enterprises;
(h) directors, deputy directors and members of the board or equivalent function of an international organisation.

No public function referred to in points (a) to (h) shall be understood as covering middle-ranking or more junior official

Why should you investigate PEP status?

UK & European Union regulations require that special attention be paid to transactions and activities of persons who are employed in exposed political positions.
The reason for this approach is that such persons have access to public money and their specific rights create a much greater risk of corruption activities.
Persons on prominent political positions participate both in legislative work related to the adoption of new legal acts in force in the UK and the entire European Union, as well as are employed in ministries and subordinate departments that implement the provisions of these laws.
The theoretical but potential involvement of a person in a politically exposed criminal activity causes that all such persons should be subject to special diligence measures when examining such a person.

When should you check if your client is PEP?

Basically, the due diligence process requires that at the beginning of establishing a relationship with the client, check whether the person does not occupy such a position.
Later, during the relationship with the client, it is necessary to periodically check whether the person has not obtained or lost PEP status.

By the client, we understand not only the personal involvement of the individual. The regulations state that in the case of entities with legal personality, which are not natural persons, all the actual beneficiaries of a given company or organization (UBO) should be verified for the status of PEP. In the event that at least one of UBOs is PEP, an enhanced due diligence procedure should be applied to such a client.

What are the categories of people with PEP status ?

Our solution does not only provide verification service if the given person is PEP. In addition, each of the persons on our list is assigned to one or more categories, that describe the nature of the position on which the person is employed.

In our system, we distinguish the following categories of people on politically exposed positions:

Each time you perform a search query (WWW application or API) - in the case of a positive answer (it is PEP) you will also receive - assigned categories to such a person.