PEP

How it is used

Used in AML and KYC, and said as a word, 'pep'. Being a PEP is not wrong in itself, but because the risk of corruption is higher, banks apply enhanced due diligence: senior management approval, checks on the source of wealth and closer monitoring. Customers are screened against PEP databases at onboarding and regularly afterwards.

Example sentences

1. The new client is a PEP, so the account needs approval from senior management.

2. PEP screening flagged the customer's brother, who is a deputy minister.

Common collocations

• PEP screening
• PEP status
• enhanced due diligence
• source of wealth
• domestic PEP

Related terms

• KYCShort for know your customer: the checks a bank makes to confirm a customer's identity, address and source of funds before and during the business relationship.
• AMLShort for anti-money laundering: the laws, controls and procedures that banks use to prevent, detect and report money laundering.
• due diligenceA careful investigation of a company, deal or customer before an agreement, to check the facts and find any risks or legal and financial problems.
• sanctionsRestrictions imposed by governments or international bodies that ban or limit financial and trade dealings with certain countries, companies or people.
• beneficial ownerThe real person who ultimately owns or controls a company or account, even if it is held in someone else's name or through other companies.

More terms: Regulation & Compliance

• compliance
• money laundering
• fraud
• regulator
• capital adequacy ratio
• suspicious transaction report
• Basel III
• terrorist financing
• banking secrecy
• reserve requirement
• regulatory reporting