Who is a Politically Exposed Person (PEP)?
A politically exposed person (PEP) is defined by the Financial Action Task Force (FATF) as “an individual who is or has been entrusted with a prominent public function. Due to their position and influence, it is recognised that many PEPs are in positions that potentially can be abused for the purpose of committing money laundering offences and related predicate offences, including corruption and bribery, as well as conducting activity related to terrorist financing. (...)”.
Also, PEPs are “individuals who are, or have been, entrusted with prominent public functions and their family members and close associates, and includes both domestic and foreign PEPs”.
PEPs can hold a position in either a government or other large organisations and institutions.
Please find a list of examples below:
- heads of State, heads of government, ministers and deputy or assistant ministers;
- members of parliament or of similar legislative bodies;
- members of the governing bodies of political parties;
- members of supreme courts, of constitutional courts or of other high-level judicial bodies, the decisions of which are not subject to further appeal, except in exceptional circumstances;
- members of courts of auditors or of the boards of central banks;
- ambassadors, chargés d'affaires and high-ranking officers in the armed forces;
- members of the administrative, management or supervisory bodies of State-owned enterprises;
- directors, deputy directors and members of the board or equivalent function of an international organisation.
No public function referred to in points (1) to (8) shall be understood as covering middle-ranking or more junior officials
Who qualifies as a PEP related individual?
A PEP person will in most cases know when he/she qualifies as a Political Exposed Person.
Related party to a politically exposed person/family members: A politically exposed person's spouse, registered partner, sexual partner, cohabitant or parents as well as children and their spouses, registered partners or cohabitants.
Close partner/associate to a politically exposed person:
- a natural person who is the beneficial owner of a business or other legal person jointly with one or more politically exposed persons;
- a natural person who has sole beneficial ownership of a legal entity or legal arrangement which is known to have been set up for the de facto benefit of a politically exposed person;
- a natural person who is known to have any other close business relationship, with one or more politically exposed persons.
At Coinify, we are legally obliged to establish whether you, as a customer, might have any political connection. Consequently, if you are a PEP or an immediate family member who is a PEP we will simply ask you to do an additional source of funds check which is part of the standard procedures on handling PEPs.