Politically exposed person (PEP) checks process

A Politically exposed person (PEP) check is a critical component of an Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance program. It helps financial institutions and businesses identify individuals who may pose a higher risk for corruption, bribery, or financial crimes due to their prominent political or public roles.

Resonare offers automated compliance solutions to streamline PEP screening and monitoring. Features include:

  • Automated PEP screening, that scan PEP databases and sanctions lists in real time.
  • Customizable risk assessment models to categorize and manage high-risk PEPs.
  • Easy filing of SARs and compliance reports directly from the platform.
  • Encrypted storage of customer due diligence records for audit and regulatory compliance.

Explore Resonare’s step-by-step process for PEP check

1. Collect Customer Information

Businesses conduct Customer Due Diligence (CDD) to gather essential information, for example:

  • Full name
  • Date of birth
  • Nationality
  • Government-issued identification (passport, national ID)
  • Occupation and employer details
  • Source of wealth and funds
  • Business relationships and affiliations

2. Screen Against PEP Databases

After collecting customer data, Resonare screens individuals against PEP databases

If a PEP or their close associates or family members are identified?

1. Identify PEP categories. PEPs are classified into different categories based on their roles and influence. The main categories include:

  • Domestic PEPs
    Officials holding prominent public functions in their own country (e.g., heads of state, government ministers, judges, military officials).
  • Foreign PEPs
    Individuals with political influence outside the institution’s home country.
  • International Organization PEPs
    Senior officials from international organizations such as the United Nations, IMF, or World Bank.
  • Close Associates & Family Members
    Spouses, parents, children, or business associates of PEPs, as they may also pose corruption risks.

2. Not all PEPs pose the same risk, so Businesses conduct a risk-based assessment by evaluating:

  • The individual’s level of political exposure.
  • Their country of origin (high-risk vs. low-risk jurisdictions).
  • Their industry or sector (e.g., high-risk industries like arms trading or government contracting).
  • Any history of financial crime, corruption, or legal disputes.
  • The nature and size of financial transactions they engage in.

Depending on the level of risk, the institution may apply Enhanced Due Diligence (EDD) measures.

3. Apply Enhanced Due Diligence (EDD) for High-Risk PEPs

4. If any suspicious financial activity is detected involving a PEP, Resonare help for institutions file a Suspicious Activity Report (SAR) or Suspicious Transaction Report (STR).

Resonare’s PEP data sets compile information from trusted and common sources

  • Lists such as the U.S. Office of Foreign Assets Control (OFAC), European Union sanctions, and the United Nations Security Council lists.
  • Regulatory records, national government lists, financial crime enforcement networks, and law enforcement records.
  • Public and media sources, news reports, court records, and open-source intelligence (OSINT) tools help identify new or undisclosed PEP connections.

By integrating Resonare’s solutions, businesses can ensure efficient, accurate, and regulatory-compliant PEP screening, reducing exposure to financial crime risks.