In financial regulations, a politically exposed person (PEP) is someone who has been entrusted with a prominent public function. A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.
This includes a person who holds or has previously held an important public position in a state or international organisation. A person continues to be considered a PEP for 18 months after their position ends.
Important public position in a state refers to roles such as:
- Head of State or Government, Minister, as well as Vice and Deputy minister
- Member of Parliament
- Board member in political parties
- Judge in the Supreme Court, Constitutional courts, or other judicial bodies at high level whose decisions can be appealed only exceptionally
- Higher official at audit authorities and member of governing bodies in Central Banks
- Ambassador, Head of mission, as well as Senior officer in Försvarsmakten (Swedish armed forces)
- People who are included in government owned companies’ management-, executive or control bodies
An important public function in an international organisation refers to functions such as Directors, Deputy directors, Board members and people who hold similar positions.
RCA stands for Relatives and Close Associates of a PEP. The list of people who may qualify as RCA includes:
- Spouses and partners
- Uncles, aunts, cousins
- Spouses/parents of children
- Close friends
- Legal advisors
- Business associates
RCAs may also be joint beneficial owners of an entity in which PEP has an interest, or may be the sole beneficial owner of an entity set up for the benefit of a PEP.