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A politically exposed person, or PEP, is someone who holds, or has recently held, a prominent public function — for example a senior politician, a judge, a senior military officer, or a central-bank official — together with their close family members and known associates. PEPs are not treated as wrongdoers; the status simply marks a higher risk of bribery or corruption, which means closer scrutiny is required.
- Who is a PEP
- A holder of a prominent public function, plus close family and known associates.
- Why it matters
- The role carries a higher risk of corruption, so enhanced checks apply.
- What it triggers
- Enhanced due diligence — more scrutiny, not automatic refusal.
How PEP status affects a check
When a borrower, owner or controller is identified as a PEP, a lender applies enhanced due diligence: it looks more closely at the source of funds and the purpose of the borrowing, and may seek senior sign-off. The aim is to manage the heightened risk responsibly, not to exclude PEPs outright. Many PEPs run perfectly legitimate businesses.
PEP screening and anti-money laundering
PEP screening is part of the anti-money-laundering framework, sitting alongside know-your-customer checks and sanctions screening. It is required under the Money Laundering Regulations 2017 and applies to business lending regardless of whether the lending falls inside the consumer-credit regime.
PEPs and Credicorp
Credicorp screens for politically exposed persons among the owners and controllers of the UK limited companies and LLPs it lends to, applying enhanced due diligence where the status is identified. Credicorp is an independent UK lender (Company No. 16093826, ICO ZC157682).
See also
- AML — the anti-money-laundering framework.
- KYC — knowing and verifying your customer.
- Ultimate beneficial owner — who really owns the borrower.
- Due diligence — the checks a lender carries out.
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