What is a politically exposed person (PEP)?

A politically exposed person — a "PEP" — is someone entrusted with a prominent public function. The label matters because public office can be abused for private gain: bribery, embezzlement and the laundering of corrupt proceeds frequently run through people with political power, or through their families and associates. PEP status is not an accusation. It is a flag that a relationship carries a higher inherent risk of corruption, and therefore warrants closer scrutiny.

1Who counts as a PEP

Under regulation 35 of the Money Laundering Regulations 2017, a PEP is an individual entrusted with prominent public functions. That typically includes:

• heads of state, heads of government, ministers and deputy or assistant ministers;
• members of parliament or of similar legislative bodies;
• members of the governing bodies of political parties;
• members of supreme courts, constitutional courts or other high-level judicial bodies;
• members of courts of auditors or the boards of central banks;
• ambassadors and high-ranking armed-forces officers;
• members of the administrative, management or supervisory bodies of state-owned enterprises; and
• directors, deputy directors and board members of international organisations.

Crucially, the definition extends beyond the office-holder to their family members and known close associates (sometimes abbreviated RCAs — relatives and close associates). The reason is practical: corrupt funds are often held or moved by a spouse, child, business partner or front, not by the official directly.

2Domestic versus foreign PEPs

A long-standing point of confusion is whether UK PEPs should be treated the same as foreign ones. The UK's position, set out in the Financial Conduct Authority's guidance (FG17/6), is risk-sensitive:

• Firms must treat domestic (UK) PEPs as inherently lower risk than foreign PEPs, unless other risk factors are present.
• The "prominent public function" test should be applied sensibly. The FCA is explicit that firms should not sweep in junior officials, local councillors, or anyone other than those holding genuinely prominent positions.
• The same proportionate approach applies to family members and close associates.

The FCA updated this guidance in 2025 to reflect changes in the legislative framework and to reinforce that PEP measures must be applied proportionately — particularly for domestic PEPs and their relatives, who should not face disproportionate friction simply because of who they are related to.

3What enhanced due diligence requires

When a customer (or a beneficial owner of a customer) is a PEP, the MLRs require enhanced due diligence (EDD). In broad terms that means:

1. Senior management approval before establishing or continuing the business relationship.
2. Establishing the source of wealth and source of funds involved in the relationship and the transactions.
3. Enhanced ongoing monitoring of the relationship.

EDD does not mean refusing to do business with PEPs. Blanket "de-risking" — closing or denying accounts purely because someone is a PEP or related to one — has been criticised precisely because the rules call for managed risk, not avoided risk.

4How long does PEP status last?

A person does not stay a PEP forever. Once an individual has left their prominent public function, firms should continue to apply a risk-based approach for a period afterwards (commonly at least 12 months) until they are satisfied the person no longer presents PEP-level risk. Family-member and close-associate status generally falls away with the principal's.

5The international standard

The UK approach follows the Financial Action Task Force, whose Recommendations 12 and 22 establish the global PEP standard. FATF distinguishes foreign PEPs (where enhanced measures are mandatory) from domestic PEPs and PEPs of international organisations (where enhanced measures apply when the relationship is higher-risk) — the same logic the UK has adopted.

6Screening for PEPs in practice

Identifying PEPs means checking names against curated PEP data and, just as importantly, understanding relationships — who controls an entity, and who they are connected to. A Probitas screen checks a name against PEP and sanctions data alongside adverse media, so the political-exposure signal is read in context rather than in isolation. As always, the screen surfaces the risk; the decision about how to manage it remains a matter for your own judgement and procedures.