Politically Exposed Person (PEP)

According to the ACAMS International Glossary of Key Money Laundering Terms and Acronyms, the Wolfsberg Global Anti-Money Laundering Guidelines for Private Banking, issued in October 2001, define politically exposed persons as "indi­viduals holding or having held positions of public trust, such as government officials, senior execu­tives of government corporations, politicians, impor­tant political party officials, etc., as well as their families and close associates."

The revised Financial Action Task Force's (FATF) 40 Recommendations define PEPs as individuals who are or have been entrusted with prominent public functions in a foreign country, for example head of state or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, important political party officials. The definition is not intend­ed to cover middle ranking or more junior individu­als in the foregoing categories. The FATF also says that business relationships with family members or close associates of PEPs involve reputational risks similar to those with PEPs themselves. PEPs are also known as Senior Foreign Political Figures.