What is PEP Screening?
PEP check (screening) is an essential element of AML (Anti-Money Laundering) compliance and it enables institutions to take the following actions:
- Identify if the client is a PEP, a close associate or a family member of a PEP,
- Determine the risk factors,
- Apply Enhanced Due Diligence (EDD) measures when required,
- Reduce the risk of being connected to any financial crime.
What is the Role of PEP Screening in AML Compliance?
PEP Screening is required for AML compliance because it helps financial institutions identify risky individuals. By carefully screening PEPs, institutions reduce risk factors early by applying Enhanced Due Diligence (EDD) and complying with FATF, FinCEN, and EU AMLD requirements.
Why Does PEP Screening Matter?
Adhering to Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) laws is required to make your business transparent and reliable. One vital element here is to follow PEP (Politically Exposed Person) screening requirements.
Why is PEP Screening Required?
In many regions under the jurisdiction of the FATF, the EU’s AML Directives and FinCEN guidance, it is mandatory to screen PEPs so that institutions can
Handle relationships with PEPs with extra caution,
- Document and monitor transactions,
- Conduct Enhanced Due Diligence (EDD) to determine where their funds come from,
- Check the financial status of PEPs regularly. An effective PEP screening also assists in
- Preventing the misuse of political power,
- Providing transparency in financial systems,
- Protecting institutions from damage and penalties,
- Following regulations such as FATF Recommendations, EU AML Directives, FinCEN guidelines, etc.
To be effective at PEP Screening, organizations and financial institutions must rely on advanced screening technologies that are proficient at AI-driven name matching and risk scoring. The up-to-date screening tools and the professional team of Sanction Scanner ensure your business can check PEPs, control their core KYC, onboarding and financial transactions.
What Is PEP Screening Software?
Across the onboarding process and the whole customer lifecycle, PEP screening software helps organizations detect Politically Exposed Persons (PEPs) and their close associates (RCAs). To provide anti-money laundering and prevent corruption, it checks individuals against global PEP databases.
How Does PEP Screening Software Work?
The software cross-references customer names with structured databases containing current and former government officials, politicians, and high-risk individuals. It uses fuzzy matching, real-time updates, and risk scoring to flag potential PEP matches accurately.
Top PEP Monitoring Software Providers in 2025
| Provider | ID verification |
| Sanction Scanner | Real-time global database, customizable risk scoring, API-first structure |
| ComplyAdvantage | Advanced AI-driven screening |
| Dow Jones Risk & Compliance | Rich and curated PEP list |
| Refinitiv World-Check | Sanction lists with strong analyst curation |
| LexisNexis Bridger Insight | Robust due diligence tools |
| NameScan | Affordable, easy-to-integrate screening |
| Shufti Pro | ID verification |
What to Consider When Choosing a PEP Monitoring Tool
- Jurisdictional Coverage: Does the tool align with your client profile?
- Real-time Data: Are PEP lists recently updated?
- Customization: Can you obtain alerts for risk factors?
- Scalability: Can the tool scale with your business growth?
- Regulatory Alignment: Is it compliant with FATF, FinCEN, and EU AMLD requirements?
PEP Screening Requirements by Country
Politically Exposed Person (PEP) screening is fundamental for global Anti-Money Laundering (AML) frameworks. Financial Action Task Force (FATF) set global rules, and yet every country has its own rules and regulation levels. You can find the summary of key jurisdictions and requirements for PEP screening below:
United States (FinCEN)
PEP Screening in USA is recommended but not directly mandated. It is regulated by the Bank of Secrecy Act (BSA) and FinCEN Guidance. While U.S. banks are urged to apply enhanced due diligence (EDD) to foreign PEPs, local PEPs do not meet the same behavior.
European Union (EU AMLD)
PEP Screening in Europe is mandatory for both foreign and domestic PEPs. It is regulated by EU Anti-Money Laundering Directives (5AMLD, 6AMLD). Enforced entities have to identify PEPs, lose associates (RCAs), and EDD. Another requirement is that transparency should be provided over beneficial ownership.
United Kingdom (UK MLRs)
PEP Screening is mandatory in the United Kingdom, which is regulated by Money Laundering Regulations (MLRs). Moreover, PEP Screening is applicable for both foreign and UK PEPs. Firms have to make a risk assessment, apply EDD, and maintain monitoring during the relationship.
Canada (FINTRAC)
PEP Screening is mandatory in Canada
Regulations: Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Applies to both foreign and domestic PEPs. Ongoing monitoring and source-of-funds checks are required for high-risk clients.
Australia (AUSTRAC)
In Australia, PEP Screening is mandatory for foreign PEPs. Anti-Money Laundering and Counter-Terrorism Financing Act regulate it. While screening is not rigorously required for Domestic PEPs, high-risk assessments are encouraged.
Singapore (MAS Guidelines)
PEP Screening is mandatory in Singapore, which is regulated by Monetary Authority of Singapore (MAS) and AML/CFT Notices. Furthermore, PEPs, their family members, and close associates must be detected and monitored nonstop.
United Arab Emirates (UAE)
United Arab Emirates (UAE) deem PEP Screening mandatory. Cabinet Resolution No. (10) of 2019 and UAE AML Law regulates it and it should be applied for all of the financial institutions and DNFBPs.
Japan (FSA Guidelines)
Japan makes PEP Screening obligatory for foreign PEPs. PEP Screening is regulated by Act on Prevention of Transfer of Criminal Proceeds. Foreign PEPs must apply EDD, and firsm are motivated to risk score domestic PEP properly.
India (RBI/SEBI/IRDAI)
India is another country in which PEP Screening is mandatory. Prevention of Money Laundering Act (PMLA) is responsible for the regulation. PEPs must be detected during onboarding and before the establishment of relationships, senior management approval is required.
Brazil (COAF Guidelines)
PEP Screening is mandatory in Brazil. Circular No. 3,978/2020 by the Central Bank of Brazil regulates it. It is applied to all financial institutions and fintechs. EDD and approval by higher management is required for PEP relationships.
What Are the Common Techniques Used in PEP Screening?
Fuzzy Matching and Name Variations
With the diversity in their names, nicknames, or alternate spelling, PEPs emerge in databases. For example, UK Prime Minister Boris Johnson’s name can also appear in his full legal name, which is Alexander Boris de Pfeffel Johnson. Advanced fuzzy matching algorithms can recognize these variations and detect potential matches. Thus, it can recognize Boris J. and Alexander Johnson as the same person.
Ongoing Monitoring
PEP risks are not stable. To detect the new risks over time, nonstop monitoring of customer activities and watchlists are essential. For instance, formerly low-risk individuals can get into a PEP watchlist after they are appointed as a government minister.
Adverse Media Screening
PEP screening includes analyzing news and public records too. With adverse media checks, for instance, banks can be informed if a client of theirs is implicated in a corruption scandal. When an international businessperson is mentioned for money laundering in a publication, Adverse Media Screening makes sure that the organization is informed about the risks beyond official watchlists.
Automated vs Manual Screening
Modern organizations trust automated solutions strengthened by artificial intelligence (AI) and machine learning for applying real-time PEP checks. These systems provide accuracy, speed, and scalability.
| Aspect | Automated Screening | Manual Screening |
| Speed | Performs checks in real-time, providing instant results | Time-intensive, as it requires human involvement |
| Accuracy | High accuracy for standard cases | Relies on human expertise |
| Scalability | Easily scalable to manage large volumes of data | Limited scalability |
| Cost Efficiency | Cost-effective for ongoing, large-scale operations | Expensive due to significant labor costs |
| Complex Case Handling | Limited in handling nuanced or ambiguous cases | Ideal for resolving complex or ambiguous scenarios |
| Reliability | Depends on the quality of algorithms | Subject to human error |
What is Included in a PEP Check?
- PEP (Politically Exposed Person) check involves the identification of sensitive information. Here we have summarized the key elements checked during a PEP screening process:
- Full Name and Aliases: Verify through global databases with exact and fuzzy matching.
- Public Role: Identify if the individual is a government official.
- Country of Exposure: Determine if the individual is a domestic or foreign PEP.
- Date of Exposure: Investigate if the individual is currently in the office. Treat former PEPs as high risk for at least 12–18 months after they end their duty.
- Close Associates: Check PEP spouses, relatives, and their business contacts.
- Industry Risk: Find out if PEPs are connected to the defense and energy sectors.
- Watchlists and Media Presence: Make sure PEPs are not on sanction lists, or that they are not involved in criminal investigations or negative news reports.
What are the PEP Screening Requirements by Country?
Each country determines its own Politically Exposed Person (PEP) screening requirements. These regulatory standards include the timing of screening and applying Enhanced Due Diligence (EDD). Our team prepared a snapshot of PEP screening requirements by country.
| Country Regulator(s) | Screening Required? | EDD | Mandatory? | Key Notes |
| United States | FinCEN | Yes | Yes, for foreign PEPs | Under the Bank Secrecy Act (BSA), Domestic PEPs are not specifically required to be screened, but financial institutions are encouraged to assess them using a risk-based approac |
| United Kingdom | FCA / JMLSG | Yes | Yes (domestic & foreign) | FCA requires EDD for all PEP categories. |
| European Union | ESAs / AMLD6 | Yes | Yes | AMLD4+ requires consistent treatment of PEPs across the EU. |
| Singapore | MAS | Yes | Yes | MAS Notice 626 mandates PEP identification and EDD for high-risk scenarios. |
| Australia | AUSTRAC | Yes | Yes | AML/CTF Rule 15 focuses on foreign PEPs. |
| Canada | FINTRAC | Yes | Yes, for foreign PEPs | Domestic PEPs are subject to a screening above C$100,000. |
| India | RBI / SEBI | Yes | Yes, for foreign PEPs | Domestic PEP treatment varies. RBI recommends a risk-based approach. |
| UAE | CBUAE / DFSA | Yes | Yes | Screening of domestic and foreign PEPs is mandatory for all entities. |
| Brazil | COAF | Yes | Yes | EDD mandated for PEPs and their relatives. |
| South Africa | FSCA / FIC | Yes | Yes | Under FICA, risk-based approaches are recommended. |
| Türkiye | MASAK | Yes | Yes | As per the Regulation 5549 requirements, all institutions must apply EDD on PEPs. |
What Is a PEP Database and How is It Maintained?
A PEP database is a centralized list that includes detailed information about Politically Exposed Persons (PEPs). It contains:
- Official roles such as ministers and ambassadors,
- Relatives and close associates (RCAs) of PEPs,
- Records of former PEPs,
- Sanction Scanner’s advanced compliance tools provide an updated database that enables real-time PEP screening.
What are the Tools for Global PEP Screening?
It is essential for financial institutions to have effective PEP screening tools. Best solutions should offer the following:
- Global Coverage: Gain access to extensive data from more than 220 countries, including sources like the UN, EU, and national sanctions lists. With global coverage, you can effectively control risk factors.
- RCA Tracing: Uncover hidden risks and identify indirect links between individuals.
- Instant Monitoring: Get real-time alerts when PEP status changes.
- Integrating API: Get help from screening tools. Make them connect to your existing software systems for best results.
- Comprehensive Screening Engine: Using a unified system can provide you with the best results.
Documentation & Audit Tips
It is essential to maintain documentation diligently. This way, financial institutions can stay compliant with PEP regulations. To ensure a professional audit process, these are the key steps:
- Save records of all PEP screening results, including both matches and non-matches.
- Log all critical decisions, such as accepting or rejecting PEPs.
- Track risk assessments, analyst reviews, and system alerts.
- Share evidence of Enhanced Due Diligence (EDD) with regulators when needed.
What are the Consequences of Failing to Screen for PEPs?
If financial institutions fail to identify and manage Politically Exposed Persons (PEPs) this can result in severe consequences. Here in this table we have summarized some of the consequences for you.
| Consequence Type | Description |
| Regulatory Fines | Imposing financial penalties |
| License Suspension | Temporary or permanent loss of permission to operate legally |
| Reputational Damage | Loss of customer trust and damaging the brand identity |
| Criminal Liability | Legal action against compliance staff for violations |
| Increased Audit Pressure | More frequent and detailed reviews of authorities |
| Operational Disruption | Business delays, extra workload, reduced efficiency |
| Closure of Entity | Shutting down companies entirely |
What Is a PEP Database and How is It Maintained?
A PEP database is a centralized list that includes detailed information about Politically Exposed Persons (PEPs). It contains:
- Official roles such as ministers and ambassadors
- Relatives and close associates (RCAs) of PEPs
- Records of former PEPs
Sanction Scanner’s advanced compliance tools provide an updated database that enables real-time PEP screening.
How Often are PEPs Checked?
PEP screening is not a one-time or temporary process but must be continuous. As political roles and risk factors frequently change, institutions must follow regulatory updates.
Recommended PEP Screening Frequency
| Stages | Frequency | Why Is It Important? |
| Customer Onboarding | Mandatory (real-time) | To prevent onboarding high-risk individuals |
| Ongoing Monitoring | At regular intervals (daily to monthly) | To detect status changes (e.g., becoming or ending up being a PEP) |
| High-Risk Clients | Continuous (real-time alerts preferred) | Due to exposure to corruption risk |
| Periodic Reviews | Annually or based on risk profile | Reassessing client risk classification |
How can Sanction Scanner Help You Identify PEPs?
Sanction Scanner provides professional tools for financial institutions, fintech companies, and professional service providers so that they can effectively manage Politically Exposed Persons (PEPs).
1. Global PEP screening is for continuously monitoring customers against an up-to-date PEP database that involves 200+ countries.
2. Automated risk classification is another service that provides assessment and categorization of PEPs depending on their role, region, and risk level.
3. Ongoing monitoring or continuous due diligence is for institutions to receive automatic alerts when new risk details about PEPs emerge.
4. Detailed audit trails and reports can regularly meet internal and external compliance requirements.
5. Real-time API integration for screening your onboarding and transaction systems with the professional tools of Sanction Scanner.
FAQ's Blog Post
PEP screening is designed for individuals. For company-related risk analysis (e.g., UBO, sanctions, adverse media), we recommend using Sanction Scanner’s full compliance platform.
The tool covers global PEP databases, including profiles of politicians, senior officials, state-owned enterprise executives, and their close associates or family members.
Yes — individual, manual checks are free of charge. If you request a demo, we’ll show sample PEP results at no cost. For bulk screening or continuous monitoring, a paid plan is required.
It’s a free tool that lets you check if a person is listed as a Politically Exposed Person (PEP). It scans global databases and returns results instantly.
PEP screening involves identifying individuals who hold or have held prominent public positions to assess their risk level for bribery, corruption, or money laundering.
Heads of state, government officials, judges, military officers, executives of state-owned enterprises, and their close associates or family members.
Because PEPs pose a higher risk for corruption and abuse of power, they require enhanced due diligence (EDD) and closer monitoring under global AML regulations.
PEP screening is legally required for regulated entities like banks, fintechs, casinos, and crypto firms. Other businesses may adopt it as part of risk-based KYC.
A PEP is not necessarily under sanctions. PEPs are monitored due to their position and influence, while sanctioned individuals are subject to legal or financial restrictions.
