Documentation · Risks

Politically exposed persons and corruption

A politically exposed person (PEP) holds, or has held, a prominent public role. That role can be abused to move or hide the proceeds of corruption, so regulators require businesses to identify PEPs, their family members and close associates, and to apply extra checks where the risk is high. This guide explains the risk, the signs that point to it, what Canada and other regulators expect, and how to screen for it with Crown Intelligence.

What the risk is

Corruption means the misuse of public office for private gain. Officials who take bribes, steal public funds or award contracts in return for payment often need to move that money somewhere it looks legitimate. Money laundering is the process of disguising the origin of those proceeds, and the Financial Action Task Force (FATF) notes that PEPs and their networks can be exploited by criminals, or can themselves be the criminals, who use their position and their resources to launder the proceeds of bribery or corruption [8] [6].

The concept is about risk, not guilt. Being a PEP is not a finding of wrongdoing. It means the person holds a position where the risk of abuse is higher, so the business needs to know who it is dealing with, understand where the money comes from, and monitor the relationship. The same logic applies to the family members and close associates of a PEP, because influence and assets can be held through them.

There are three PEP categories in the FATF standards and in Canadian law:

Foreign PEPs: individuals who hold or have held a prominent office in or for a foreign state, such as heads of state or government, senior ministers, senior judges, ambassadors and heads of state-owned companies or banks [3].
Domestic PEPs: the equivalent offices in or for the federal, provincial, territorial or municipal government of the country where the business operates. In Canada this includes members of Parliament and provincial legislatures, deputy ministers, military officers of general rank or above, and presidents of corporations wholly owned by the Crown [3] [1].
Heads of international organizations: the heads of organizations established by governments, and of their institutions, as well as heads of international sports organizations [3].

How it shows up

These are indicators for analysts and compliance teams to weigh together. None of them proves corruption on its own. The list is a general summary for analysts. It draws on the themes of FATF's 2011 typology on laundering the proceeds of corruption, which was read as an abstract only [9].

Wealth or spending that does not match a public salary or declared income, such as large property purchases, luxury assets or private aircraft and yachts.
Payments to or from state-owned enterprises, or contracts with public bodies, where a relative, close associate or business partner benefits.
Companies, trusts or accounts held in the names of family members, friends, nominees or assistants, with the PEP controlling them in practice.
Layered ownership through shell or front companies, especially in another jurisdiction, where the ultimate beneficial owner is hard to establish.
Sudden changes in ownership or control of companies in a sector the official regulates, licenses or buys from.
Heavy use of intermediaries, such as lawyers, accountants or trust and company service providers, combined with unusual requests or reluctance to explain the purpose of transactions.
Reluctance or inability to explain the source of funds or source of wealth, or documents that are hard to verify.
Activity that changes after the person leaves office, or payments that continue to flow through people or companies linked to a former role.
Adverse media, enforcement actions or sanctions and debarments involving the PEP, a relative or an associate.

What regulators expect

Canada

Canada's rules sit in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), section 9.3, and its Regulations [3] [4]. The PCMLTFA requires covered businesses to determine whether they are dealing with a foreign PEP, a domestic PEP, a head of an international organization, or a family member or a person closely associated with one of them. FINTRAC's guidance sets out the practical steps [1] [2]:

Time limits. A domestic PEP or head of an international organization remains in scope for 5 years after leaving office or after death. Firms must keep mitigating risk until then [1].
Family members. The prescribed family members are the spouse or common-law partner, children, parents, the parents of the spouse or common-law partner, and siblings. Step-children are included only where legally adopted. Nieces and nephews are not on the list [1].
Close associates. A close associate is someone connected to a PEP for personal or business reasons, such as a business partner or a person in a romantic relationship with the PEP, or someone involved in financial transactions with the PEP [2].
Risk rating. Foreign PEPs, and their family members and close associates, must be treated as high risk. Domestic PEPs and heads of international organizations must be treated as high risk where the firm's own risk assessment finds a high risk of money laundering or terrorist financing [1].
Source of funds and source of wealth. Once a PEP is identified, firms must take reasonable measures to establish the source of funds for the transaction and the source of the person's wealth. Where activity does not fit that information, the firm may need to follow up [1].
Senior management review. A member of senior management must review the transactions and decide whether accounts can stay open. Senior management must understand the money laundering risk and the firm's PEP obligations [1].
Name matches. A name match must be considered, but FINTRAC states that it is not necessarily enough, on its own, to create reasonable grounds to conclude that an existing client is a PEP. The firm still has to assess the information [1].

The Corruption of Foreign Public Officials Act is the separate offence law. It implements Canada's commitment to the OECD Convention on Combating Bribery of Foreign Public Officials [5]. The Department of Finance's 2025 national risk assessment identifies PEPs and heads of international organizations as holding positions at risk for money laundering and terrorist financing (as quoted in FINTRAC's guidance), and says that businesses dealing with PEPs may face higher risks that require enhanced due diligence [6].

United States

US Treasury rules under 31 CFR Part 1010 require enhanced due diligence for private banking accounts where a senior foreign political figure is a nominal or beneficial owner. The program must include enhanced scrutiny designed to detect and report transactions that may involve the proceeds of foreign corruption [11] [12]. The US rule is limited to private banking accounts held for senior foreign political figures. It does not replace Canadian requirements, so Canadian businesses with US links should check both.

United Kingdom

The UK Money Laundering Regulations 2017 require enhanced customer due diligence for PEPs, their family members and known close associates, under regulation 35 [14]. The Financial Conduct Authority's guidance on the treatment of PEPs for anti-money laundering purposes, FG25/3, was published on 7 July 2025 and revised on 15 July 2025 [13].

European Union

Directive (EU) 2015/849 defines a PEP as a natural person who is or has been entrusted with prominent public functions, and sets out the categories and enhanced measures for PEPs and their family members and close associates [15]. The Anti-Money Laundering Regulation, Regulation (EU) 2024/1624, replaces national rules with a directly applicable rulebook [16]. A secondary guide reports that the Regulation applies from 10 July 2027; confirm the date against the Official Journal before relying on it [17].

International standards

FATF Recommendations 12 and 22 set the global baseline. FATF first made requirements for foreign PEPs mandatory in June 2003, then extended them in February 2012 to domestic PEPs and PEPs of international organizations, in line with Article 52 of the United Nations Convention against Corruption (UNCAC) [7] [8] [10]. FATF's 2013 guidance states that foreign PEPs are always high risk, while the risk of domestic PEPs depends on other factors [7]. The Wolfsberg Group, a private-sector association of banks, argues for a risk-based approach to all PEPs, foreign and domestic, rather than automatic high-risk treatment for foreign PEPs [18]. In Canada, FINTRAC's guidance requires foreign PEPs to be treated as high risk [1].

How to screen for it with Crown Intelligence

Crown Intelligence holds a dedicated PEP collection built from published official and public sources. Each record is credited to its source and dated, so you can show where a PEP status came from and when it was last loaded. Use the figures below to see the scale of the collection; they are fetched live from the data service and are not typed by hand.

Measure	Figure	Where to look
PEP records in the collection	Loading…	PEP collection page
Distinct entities	Loading…	Collection metadata (JSON)
Sources in the collection	Loading…	Browse PEP sources
Records tagged to Canada (CA)	Loading…	Search Canadian PEP records · Canada overview
Collection generated	Loading…	Date of the most recent build of the PEP collection

A practical workflow for a Canadian compliance team:

Search by name and nationality. Start with the PEP search, then narrow by nationality or country. Check the source, the position and the dates on each record.
Match in bulk. For onboarding or periodic reviews, send customer lists to the PEP match endpoint at POST /api/match/peps. Review the scores and the explanation for each match before deciding. See the developer documentation for the request format.
Check the adjacent registers. A PEP can also appear as a sanctioned party, a debarred supplier or a party in an ownership chain. Look at sanctions, debarments and ownership collections for the same name.
Record the decision. Keep the source, the date of the record and your reasoning, so the determination can be reviewed later.

Checklist

Determine whether each customer, beneficial owner or signing officer is a foreign PEP, domestic PEP or head of an international organization, and record the basis.
Check family members and close associates, using the definitions above, and re-check when the relationship changes.
Treat foreign PEPs and their family members and close associates as high risk, and apply enhanced measures to them.
Assess domestic PEPs and heads of international organizations against your risk assessment, and document the result.
Establish the source of funds and the source of wealth, with evidence where the risk is high.
Obtain senior management review before continuing a high-risk PEP relationship.
Monitor the relationship, and keep mitigating risk for 5 years after a domestic PEP leaves office.
Keep records of screening results, sources, dates and decisions.

Frequently asked questions

Is every PEP a high-risk customer?

In Canada, foreign PEPs and their family members and close associates must be treated as high risk. Domestic PEPs and heads of international organizations are high risk where the firm's own risk assessment finds a high risk of money laundering or terrorist financing [1]. FATF guidance treats foreign PEPs as always high risk [7].

How long does PEP status last?

For domestic PEPs and heads of international organizations, FINTRAC's guidance applies a 5-year period after the person leaves office or dies. Under FINTRAC's guidance, a family member of a foreign PEP remains a family member of a foreign PEP permanently [1].

Does a name match on a PEP list prove that someone is a PEP?

No. A name match must be assessed. FINTRAC notes that a name match is a fact a firm must consider, but it is not necessarily enough on its own to form reasonable grounds that the client is a PEP. Check the position, dates and source of the record, and confirm the identity of the person [1].

Who counts as a family member?

The prescribed list covers a spouse or common-law partner, children, parents, the parents of a spouse or common-law partner, and siblings. Step-children count only if legally adopted, and nieces and nephews are not on the list [1].

What is the difference between source of funds and source of wealth?

Source of funds is how the money used in a specific transaction was acquired. Source of wealth is where a person's overall wealth came from. FINTRAC's guidance asks firms to establish both where the risk is high [1].

Does Crown Intelligence decide who is a PEP?

No. Crown Intelligence provides records from published sources, credited and dated. The business decides whether a person is a PEP, what risk applies and what measures to take, and it should document that decision.

Sources

All sources were read on 2026-10-10 unless noted. Links are to the publisher's own pages.

FINTRAC, Politically exposed persons and heads of international organizations guidance, fintrac-canafe.canada.ca/guidance-directives/client-clientele/pep/pep-eng. Read 2026-10-10. The copy read shows a page date of 2021-05-04 and refers to the 2025 national risk assessment.
FINTRAC, Frequently asked questions in relation to politically exposed persons and heads of international organizations, fintrac-canafe.canada.ca/individuals-individus/faq-pep-eng. Read 2026-10-10. Page dated May 2021.
Government of Canada, Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17, section 9.3, laws-lois.justice.gc.ca/eng/acts/P-24.501/section-9.3.html. Read 2026-10-10. Consolidation current to 2026-09-21.
Government of Canada, Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, SOR/2002-184, laws-lois.justice.gc.ca/eng/regulations/SOR-2002-184/FullText.html. Read 2026-10-10. Consolidation current to 2026-09-21.
Government of Canada, Corruption of Foreign Public Officials Act, S.C. 1998, c. 34, laws-lois.justice.gc.ca/eng/acts/C-45.2/page-1.html. Read 2026-10-10 (long title read from search excerpt).
Department of Finance Canada, 2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada, canada.ca/en/department-finance/programs/financial-sector-policy/nira-neri/2025/report.html. Read 2026-10-10 (from search excerpt and as quoted in FINTRAC guidance).
FATF, Guidance: Politically Exposed Persons (Recommendations 12 and 22), 1 June 2013, fatf-gafi.org/content/dam/fatf/documents/recommendations/Guidance-PEP-Rec12-22.pdf. Read 2026-10-10 from search excerpts; the full PDF could not be retrieved by our reader.
FATF, Politically Exposed Persons (Recommendations 12 and 22), fatf-gafi.org/en/publications/Fatfrecommendations/Peps-r12-r22.html. Read 2026-10-10 (search excerpt).
FATF, Laundering the Proceeds of Corruption, July 2011, fatf-gafi.org/en/publications/Methodsandtrends/Launderingtheproceedsofcorruption.html. Read 2026-10-10.
United Nations Office on Drugs and Crime, United Nations Convention against Corruption, unodc.org/corruption/en/uncac/index.html. Read 2026-10-10 (search excerpt).
US Department of the Treasury, FinCEN, 31 CFR 1010.605 (definitions) and 31 CFR Part 1010, Subpart F, ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1010/subpart-F. Read 2026-10-10.
Federal Financial Institutions Examination Council, BSA/AML Manual: Assessing Compliance with BSA Regulatory Requirements, bsaaml.ffiec.gov/manual/AssessingComplianceWithBSARegulatoryRequirements/11. Read 2026-10-10 (search excerpt).
UK Financial Conduct Authority, FG25/3: The treatment of politically exposed persons for anti-money laundering purposes, 7 July 2025, revised 15 July 2025, fca.org.uk/publication/finalised-guidance/fg25-3.pdf. Read 2026-10-10 (search excerpt).
UK Legislation, The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692, regulation 48 (which refers to the enhanced measures in regulation 35), legislation.gov.uk/uksi/2017/692/regulation/48/made. Read 2026-10-10 (search excerpt).
European Union, Directive (EU) 2015/849 of 20 May 2015, eur-lex.europa.eu (CELEX 32015L0849). Read 2026-10-10 (search excerpt of Article 3(9)).
European Union, Regulation (EU) 2024/1624 of 31 May 2024 (AMLR), eur-lex.europa.eu/eli/reg/2024/1624/oj/eng. Read 2026-10-10 (search excerpt).
Secondary guide, EU AML Package Guide 2026, financialregulations.eu, financialregulations.eu/blog/eu-aml-package-amla-amlr-guide. Read 2026-10-10. Used only for the application date, which should be checked against the Official Journal.
Wolfsberg Group, PEP guidance statement, wolfsberg-group.org/resources/2024-statement-on-effective-monitoring-for-suspicious-activity/50. Read 2026-10-10 (search excerpt). Industry guidance, not a regulator.

Not legal advice. This guide summarizes public sources for general information. It is not legal, tax or compliance advice, and it does not replace the PCMLTFA, the Regulations, or guidance from FINTRAC or another regulator. Consult qualified advisers before relying on it for a decision.

Last updated 2026-10-10