Politically Exposed Person (PEP)
Definition
An individual who holds or has held a prominent public function, including senior government officials, judges, military officers, and their close family members and associates. PEP status is a risk indicator in bribery audits and triggers enhanced due diligence under most anti-money-laundering frameworks.
Related terms
- Beneficial Owner
- The natural person who ultimately owns or controls a legal entity or arrangement, as distinct from the nominee or registered owner. Anti-money-laundering...
- Conflict of Interest
- A situation in which a person's private interests, financial, personal, or professional, could improperly affect their exercise of a duty to an...
- Correspondent Banking
- A relationship in which one bank (the correspondent) provides services such as clearing and settlement to another bank (the respondent), allowing the...
- Customer Due Diligence (CDD)
- The process of identifying and verifying the identity of a customer and their beneficial owner, understanding the purpose of the business relationship,...
- Enhanced Due Diligence (EDD)
- A heightened set of CDD measures applied to higher-risk customers or relationships, including PEPs, high-risk jurisdictions, and certain business types. EDD typically...
- FCPA (Foreign Corrupt Practices Act)
- A 1977 US federal statute with two pillars: anti-bribery provisions that prohibit payments to foreign government officials to obtain or retain business,...
- Sole-Source Justification
- A documented explanation for awarding a contract without competitive bidding, typically claiming that only one supplier can meet a requirement. In bribery...
- Suspicious Activity Report (SAR) / STR
- A confidential report filed by a reporting entity to the national Financial Intelligence Unit when a transaction or pattern gives rise to...
- Third-Party Due Diligence
- The process of verifying the identity, ownership, reputation, and business legitimacy of agents, distributors, joint-venture partners, and other intermediaries. Required under the...
- UK Bribery Act 2010
- A UK statute that criminalises both public and private sector bribery, covers any person (not only government officials), and creates a strict-liability...
Explained in these topics
- AML Compliance: KYC, CDD, and Suspicious Activity ReportingAn individual who holds or has held a prominent public function, together with family members and known close associates, who presents a higher corruption and...
- Auditing Bribery and Conflicts of InterestAn individual who holds or has held a prominent public function, including senior government officials, judges, military officers, and their close family membe...