Politically Exposed Person (PEP)
A current or former senior foreign political figure (head of state, senior politician, senior government official, senior judicial or military official, senior executive of a state-owned company), their immediate family members, and their close associates. PEP status is NOT itself a disqualifier from being a client, but it triggers ENHANCED due diligence: senior-management approval to open the account, ongoing enhanced transaction monitoring, periodic source-of-wealth review, and documented justification for the relationship. The enhanced scrutiny reflects the higher historical correlation between PEP status and corruption-derived funds. Domestic PEPs are subject to less stringent requirements than foreign PEPs under US rules but increasingly receive elevated scrutiny under international AML best practice.
Lessons that use this term
Related terms
Anti-Money-Laundering (AML) · Currency Transaction Report (CTR) · Investment Policy Statement (IPS) · Know Your Client (KYC) · Onboarding Workflow · Rebalancing Policy
Open this term in the app → — no account needed; browse the full glossary while you research.