AML & Compliance
What is politically exposed person (PEP)?
An individual who holds or has recently held a prominent public function—such as a head of state, senior government official, judicial authority, or military leader—along with their family members and close associates. PEPs present a higher risk for potential involvement in corruption and money laundering due to their position and influence. Financial institutions must apply Enhanced Due Diligence (EDD) to PEP relationships and monitor them more closely.
How it works
Example: A wealth management firm identifies a new client as the spouse of a sitting cabinet minister. The compliance team classifies the account as PEP-related and applies EDD, including enhanced transaction monitoring and annual relationship reviews.


