What are PEP (Public Exposed Persons) lists?

PEP (Public Exposed Persons) lists are registries or databases that contain information on individuals who hold public or relevant positions in society and who are therefore exposed to risk situations such as bribery, corruption, or money laundering. These lists are used by financial entities and government authorities to prevent and detect illicit activities. PEP lists may include information on politicians, public officials, businessmen, religious leaders, among others, and their use is mandatory in many countries as part of efforts to combat corruption and money laundering.

Who is considered a Politically Exposed Person (PEP)?

A Politically Exposed Person (PEP) is a person who holds or has held a prominent public office or who has a close relationship with someone who holds or has held such an office. In general, a PEP is any person who has a high level of responsibility in political, administrative or judicial decision-making, whether at the national or international level. For example, heads of state, members of government, deputies or senators, judges, magistrates, mayors, among others, are considered PEPs. Close relatives or associates of these persons, such as spouses, children, parents, siblings, business partners, among others, are also considered PEPs. In short, any person who has a position of power or influence in society may be considered a PEP.

Why are PEPs and sanction screening necessary?

PEP (Politically Exposed Persons) and sanctioned lists are important tools for preventing and combating corruption, money laundering and terrorist financing. These tools enable financial institutions and government authorities to identify individuals and organizations that may be involved in illicit activities.

Sanctions screening identifies individuals and organizations that have been sanctioned for illegal activities, such as terrorism or drug trafficking. These sanctions may include freezing assets or prohibiting financial transactions. The inclusion of these individuals and organizations on sanctions lists allows financial institutions and government authorities to prevent any financial transactions with them.

En resumen, las listas PEP y la detección de sanciones son herramientas importantes para prevenir y combatir la corrupción, el lavado de dinero y el financiamiento del terrorismo, y son necesarias para garantizar la integridad y la transparencia del sistema financiero.

Who decides who is a Public Exposed Person?

The decision of who is considered a Politically Exposed Person (PEP) or who is sanctioned is made by different agencies and entities, depending on the country and jurisdiction in question.

In general, PEP and sanctions lists are maintained by government authorities. These may include government agencies such as the U.S. Treasury Department, the European Union, the Organization for Economic Cooperation and Development (OECD) and other international organizations.

Financial institutions, such as banks and exchange houses, are responsible for verifying whether their customers are on the PEP or sanctions lists. In some countries, financial institutions are required by law to perform this verification before conducting any financial transaction.

As for the decision to sanction an individual or organization, this is usually made by the relevant government authorities, such as the justice or national security departments. These decisions are usually based on investigations and evidence indicating that the person or organization is involved in illegal activities, such as money laundering, corruption or terrorist financing.

In short, the decision of who is considered a PEP or who is sanctioned is made by different agencies and entities, depending on the country and jurisdiction in question, and is usually based on investigations and evidence of illicit activities.

How many types of PEP are there?

There are different types of Politically Exposed Persons (PEPs), depending on their level of exposure and responsibility in political or administrative decision-making. The three main types of PEPs are described below:

1. High-level PEPs: are individuals who hold or have held high-level political or administrative positions, such as heads of state, ministers, governors, mayors, among others.
2. Intermediate-level PEPs: these are people who hold or have held political or administrative positions at intermediate level, such as deputies, senators, councilmen, directors of state-owned companies, among others.
3. Low-level PEPs: these are people who hold or have held low-level political or administrative positions, such as advisors, secretaries, assistants, among others.