What is a politically exposed person (PEP)?
A politically exposed person (PEP) is an individual who holds or has held a prominent public function — such as a head of state, minister, senior judge, senior military officer, ambassador, or director of a state-owned enterprise. Their immediate family members and known close associates are treated equivalently. PEP status is a risk indicator, not an accusation.
Written by Andréas Hobbelin · Last updated
Categories
- Domestic PEPs — prominent public functions within Spain or Portugal.
- Foreign PEPs — equivalent functions in another country, generally treated as higher risk.
- International organisation PEPs — senior officials of supranational bodies.
- Family members — spouse or equivalent partner, children and their spouses, parents.
- Close associates — joint beneficial owners of a legal entity, or those with close business relationships.
What is required when a client is a PEP
PEP status triggers enhanced due diligence: senior management approval to establish or continue the relationship, additional measures to establish the source of funds and source of wealth, and enhanced ongoing monitoring. Being a PEP is never a reason to decline automatically — it is a reason to understand and document the relationship properly.
False positives
Name-based screening produces a high volume of possible matches, particularly with common Spanish and Portuguese surnames. The discipline that matters is match resolution: comparing date of birth, nationality, jurisdiction and role, recording the reasoning and the evidence relied on, and being able to reproduce that decision later. PropComply presents match data in a guided way so a user can confirm or dismiss a match with an auditable trail.
Frequently asked questions
How long does someone remain a PEP after leaving office?
Risk does not end on the last day in office. A risk-based assessment is required for a period afterwards, commonly at least twelve months and longer where the role or jurisdiction warrants it.
Are local councillors PEPs?
It depends on the prominence of the function. Middle-ranking or junior officials are generally excluded, but locally prominent roles with procurement or planning influence deserve a risk-based assessment.
Sources and further reading
Put this into practice
PropComply structures KYC/CDD once per client and shares it securely with the parties in the transaction — each keeping their own independent decision.
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