PEP screening for family offices
What a politically exposed person is, why they require enhanced due diligence, and how screening works without over-flagging.
- A PEP holds or held a prominent public function, plus their close associates and family.
- PEP status requires enhanced due diligence, not refusal.
- Good screening balances coverage against false positives.
What is a PEP
A politically exposed person holds or has held a prominent public function — heads of state, senior politicians, judges, senior military, and executives of state-owned enterprises. The definition extends to their immediate family and known close associates.
Enhanced due diligence
PEP status does not mean refusal. It means enhanced due diligence: senior sign-off, source-of-wealth and source-of-funds checks, and closer ongoing monitoring. The risk is corruption and illicit enrichment, not the office itself.
Avoiding over-flagging
Name-matching produces false positives — common names, transliterations, and namesakes. A score-based approach with human review beats a blunt yes/no. FLIORE treats screening as advisory: it surfaces candidates and leaves the decision to the responsible officer.
FAQ
- FATF Recommendation 12 — PEP requirements.
- Wolfsberg Group guidance — PEP due diligence practice.
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