PEP
Politically Exposed Person
Definition
An individual who holds or has held a prominent public function, such as a head of state, senior politician, or senior military official. PEPs present a higher risk for money laundering due to their potential access to public funds and susceptibility to corruption. Family members and close associates of PEPs are also subject to enhanced scrutiny.
Regulatory Context
FATF Recommendation 12 requires enhanced due diligence for PEPs. The EU AML Directives distinguish between domestic, foreign, and international organisation PEPs, each requiring EDD measures.