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PEP Lists Explained

Simply put, a PEP list is a database of known Politically Exposed Persons - that is, any individual who holds a prominent position in public life. Some examples include government ministers, high-ranking military officials or senior executives in publicly owned corporations.

PEP lists are an important resource when it comes to carrying out AML checks, as PEPs are generally deemed to be more vulnerable to corruption and financial crime. This means that identifying PEPs amongst your potential clients or customers can help you to reduce the money laundering risk your business is facing.

Two Kinds of PEP Lists

There are usually two different kinds of PEP list in circulation within a business, industry or country. These are as follows:

-         The first type of PEP list is a database of named or documented PEPs – anyone who features on a list like this is a confirmed Politically Exposed Person. However, it’s worth noting that these lists are rarely exhaustive; if you don’t get a match for your customer, this should not be considered as proof that they are not a PEP.

-         The second type of PEP list is a database of functions, positions and roles in the public domain, that would qualify a person as politically exposed, and therefore more susceptible to bribery and money laundering.

What is PEP screening?

PEP screening is the process of checking PEP lists for a match to the details of your customer. Data about PEPs can be obtained from a variety of different sources, including government lists, public records, media and the internet.

Carrying out PEP screening during the course of your AML checks is an integral part of your company’s AML compliance. By identifying a PEP, you are able to make an informed decision about whether or not to go into business with a high-risk customer. If you do choose to proceed despite the risk, then you can use your knowledge of the PEP to carry out Enhanced Due Diligence, as well as ongoing monitoring throughout your dealings.

SmartSearch Can Help

To be PEP compliant, you need to carry out extensive screenings, cross-referencing your customer’s details across all the PEP resources available to you. There are thousands of different PEP lists in circulation, so performing these checks manually is very time-consuming, and often inaccurate.

Here at SmartSearch, we conduct PEP screenings using the Dow Jones WatchList – a comprehensive combination of over 1,100 different lists sourced globally. Our automated software is incredibly thorough, and will automatically carry out Customer Due Diligence on any matches that occur. 

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