PEP (Politically Exposed Person)

A Politically Exposed Person is someone entrusted with a prominent public function, a head of state, a senior politician, a senior judicial or military official, a senior executive of a state-owned enterprise, a senior political-party official, whose position creates an elevated risk that money moving through their accounts could be the proceeds of bribery, embezzlement, or corruption rather than legitimate income. Regulation typically splits the category into domestic PEPs (prominent functions within the customer's own country), foreign PEPs (the same, in another country), and international-organization PEPs (senior positions at a body like the UN or a multilateral development bank), and extends the same treatment to a PEP's family members and known close associates, since routing funds through a relative or business partner is an obvious way around a check that only looks at the PEP themselves.

Two things are worth teaching plainly, because both are commonly misunderstood. First, PEP status is not an accusation and does not automatically bar someone from a business relationship, it's a risk classification that triggers Enhanced Due Diligence (see EDD), not an automatic decline; most PEPs bank and transact entirely normally, just under closer scrutiny. Second, the status doesn't end the moment someone leaves office: the EU's own rule requires enhanced measures to continue for at least twelve months after a person ceases to hold a prominent public function, because the relationship-based risk (old favors, old connections) doesn't vanish the day the title does, many regimes outside the EU apply similar reasoning, though the exact period varies by jurisdiction.

Who actually built this

FATF Recommendation 12 and FATF's Glossary set the definition and the enhanced-measures requirement almost every national rule maps to. The EU gives it a specific legal shape in Article 3(9) of its Fourth Anti-Money Laundering Directive, with the twelve-month tail rule in Article 22. Türkiye's MASAK secondary legislation carries an equivalent definition for TR-regulated entities. None of it is Solidus's design.

Solidus today

Solidus has not built PEP screening into any product. Solidus Verify confirms identity (document authenticity plus a live face match); it does not check the verified person, or their known relatives and associates, against any PEP list or database.

See also

Sanctions Screening is the screening practice PEP status feeds into. EDD is the escalated diligence tier a PEP triggers. UBO, a PEP hiding behind a corporate ownership structure, is exactly the layered risk beneficial-ownership analysis is built to catch. AML is the umbrella program this all sits inside.