Politically Exposed Person (PEP) / Sanctions Screening

Politically Exposed Person - As part of AML compliance, brokers must identify if a client is a PEP (a public official or close relative) or is on global sanctions lists. This involves watchlist or sanctions-list screening of customers. Dealing with PEPs or sanctioned individuals triggers enhanced due diligence (EDD) because of higher corruption/terrorism risk. Regulated firms use automated screening (against UN, OFAC, etc.) to block or report dealings with sanctioned parties or PEPs.