How to define “Politically Exposed Persons”?
. The term “politically exposed persons” (“PEP”) applies to persons who perform important public functions for a state. The definition used by regulators or in guidance is usually very general and leaves room for interpretation. For example the Swiss Federal Banking Commission in its guidelines on money laundering uses the term “person occupying an important public function”, the US interagency guidance uses “senior foreign political figure” and the BIS paper Customer due diligence for banks says “potentates”. The term should be understood to include persons whose current or former („Rule of thumb”: 1 year after giving up any political function) position can attract publicity beyond the borders of the country concerned and whose financial circumstances may be the subject of additional public interest. In specific cases, local factors in the country concerned, such as the political and social environment, should be considered when deciding whether a person falls within the definition.
A. The term “politically exposed persons” (“PEP”) applies to persons who perform important public functions for a state. The definition used by regulators or in guidance is usually very general and leaves room for interpretation. For example the Swiss Federal Banking Commission in its guidelines on money laundering uses the term “person occupying an important public function”, the US interagency guidance uses “senior foreign political figure” and the BIS paper Customer due diligence for banks says “potentates”. The term should be understood to include persons whose current or former („Rule of thumb”: 1 year after giving up any political function) position can attract publicity beyond the borders of the country concerned and whose financial circumstances may be the subject of additional public interest. In specific cases, local factors in the country concerned, such as the political and social environment, should be considered when deciding whether a person falls within the definition.
