What is a politically exposed person (PEP)?

A politically exposed person (PEP) is an individual who holds a prominent public position or has been entrusted with a significant public function. This category typically includes heads of state, senior government officials, judicial or military officials, and individuals who hold important roles in international organizations. PEPs may also encompass family members and close associates of such persons. Due to their positions, PEPs are often considered to be at a higher risk for potential involvement in bribery, corruption, or money laundering activities. Therefore, financial institutions and entities are generally required to apply enhanced due diligence measures when dealing with PEPs, to ensure compliance with anti-money laundering (AML) and counter-terrorism financing regulations.