Politically exposed person (PEP)
A person who holds or has recently held a prominent public function (head of state, parliamentarian, senior public-company executive, etc.) as well as their close associates and family members. Their file is subject to enhanced due-diligence measures under AML/CTF rules: thorough identity checks, verification of the source of funds and wealth, and ongoing monitoring of the business relationship. The broker must identify PEPs at the outset of the relationship.
Key points
- Status defined by EU directive and transposed into French law.
- Extends to close family members and known associates of the PEP.
- Enhanced diligence includes verification of wealth origin and ongoing relationship monitoring.
- The broker must identify PEP status at the outset, before any bank submission.
Frequently asked questions
How does a broker identify whether their client is a politically exposed person?
The broker explicitly asks the question during onboarding via a KYC questionnaire and consults reference lists (AML/CTF databases, official public sources). They must also check whether close family members hold or have held such functions, since PEP status extends to relatives.
What concrete measures apply to a PEP file?
The file requires sign-off from a senior officer before submission, a thorough check of the origin of assets and funds, and ongoing monitoring throughout the business relationship. These additional steps lengthen processing times compared to a standard file.
Is a former official still considered a PEP after leaving office?
Yes. Regulations require enhanced vigilance to be maintained for at least one year, and often longer depending on the seniority of the functions held, after leaving office. The broker cannot therefore automatically lift PEP measures as soon as the term ends.
In practice
A chief executive of a public-sector company applies for a mortgage; the broker classifies the file under enhanced due diligence, requests a detailed justification of the down payment, and seeks compliance officer sign-off before submitting to the bank.
Official sources
- Article R561-18 CMF (politically exposed persons) · Légifrance
- Article L519-1 of the Monetary and Financial Code · Légifrance
- Prudential supervision and resolution authority · ACPR (Banque de France)