PEP screening software
PEP screening software identifies politically exposed persons, their family members and close associates among a business's customers and their beneficial owners, so that the higher risk these relationships can carry is managed with enhanced due diligence. This guide explains who counts as a PEP, what regulators generally expect, and how to evaluate PEP screening.
Who is a politically exposed person?
A politically exposed person is someone who is or has been entrusted with a prominent public function, such as a head of state or government, a senior politician, a senior government, judicial or military official, a senior executive of a state-owned company, or a senior official of a political party. The FATF standards distinguish foreign PEPs, domestic PEPs and people with a prominent function in an international organisation.
The measures also extend to a PEP's family members and close associates, often called RCAs, because they can be used to hold or move funds on the PEP's behalf. Being a PEP is not an accusation: most PEPs are legitimate customers. It is a risk factor that calls for more scrutiny.
What PEP screening software does
- Identifies PEPs, family members and close associates at onboarding, among customers and their beneficial owners.
- Re-screens the customer base, because a customer can take up a prominent function after the relationship has started.
- Shows the public function behind a match, so the analyst can judge the level of risk it carries.
- Feeds enhanced due diligence: establishing the source of wealth and source of funds and obtaining senior management approval for the relationship.
- Keeps the evidence of every check and every decision.
Regulatory expectations
FATF Recommendation 12 requires enhanced measures for foreign PEPs in every case: senior management approval, reasonable measures to establish the source of wealth and source of funds, and enhanced ongoing monitoring. For domestic PEPs and international organisation PEPs, the same measures apply where the relationship is assessed as higher risk.
Regional and national rules can go further. The EU anti-money laundering framework and the UK Money Laundering Regulations 2017, for example, apply enhanced due diligence to domestic PEPs as well as foreign ones, and both cover family members and known close associates.
How to evaluate PEP screening software
- Coverage: which countries and which levels of public function are included, and is that coverage documented?
- Relatives and associates: are family members and close associates covered, and is the relationship shown?
- Former PEPs: does the data keep people who have left office, for as long as your rules treat them as PEPs?
- Matching quality: spelling variants, transliteration and namesakes, with dates of birth and nationality used to rule out false positives.
- Explainability: does a match show the function, the country and the source, so an analyst can rate the risk?
- Integration: real-time checks at onboarding and batch re-screening of the existing customer base.
on8.ai
PEP screening with on8.ai
on8.ai screens for politically exposed persons in the same call as sanctions and risk screening, by API or in batch, and every match comes with the reasoning behind it. Each customer gets a dedicated deployment, and no large language model or external API sits in the decision path.
PEP screening
Identify politically exposed persons, including family and close associates, through one API.
Learn moreSanctions screening
Sanctions and PEP checks in the same screening call.
Learn moreOngoing monitoring
Re-screen customers and be told when their status changes.
Learn moreAdverse media
Enforcement, debarment and other adverse findings, categorised and graded.
Learn moreFAQ
Frequently asked questions
What is PEP screening?
PEP screening checks whether a customer, or the beneficial owner of a business customer, is a politically exposed person or a family member or close associate of one, so that enhanced due diligence can be applied where it is required.
Is it illegal to have a PEP as a customer?
No. A PEP is not a sanctioned person. The rules require more scrutiny of the relationship, not a refusal to do business.
Who counts as a close associate of a PEP?
Generally, a person known to have close business relations with a PEP, such as joint ownership of a company or legal arrangement, or to be the beneficial owner of an entity set up for the PEP's benefit. The exact definition follows the applicable national rules.
How long does someone remain a PEP?
It depends on the applicable rules. Many require PEP measures to continue for a period after the person leaves office and then to be ended only on a risk-based assessment.
Can I try on8.ai PEP screening for free?
Yes. The free sanctions search on on8.ai screens a person or company against sanctions and PEP sources and emails you the full report as a PDF.
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