TLDR: The article categorizes Politically Exposed Persons (PEPs) by risk level according to FATF guidelines: High Risk (Class 1) includes ruling royals and top government officials; Medium-High Risk (Class 2) covers regional officials and senior international figures; Medium Risk (Class 3) involves senior management in state-owned enterprises; Low Risk (Class 4) includes local mayors and judges.
Understanding PEP's
Our PEP definitions and categorisations are aligned with the guidelines provided by the Financial Action Task Force (FATF), broken down by risk level:
High Risk – PEP Class 1
- Ruling Royal Families
- Heads of state and government
- Members of government (national and federal level)
- Members of Parliament (national and federal level)
- Senior officials of other state agencies and bodies, and high-ranking civil servants
- Heads of senior officials in the military, judiciary, law enforcement and the board of central banks
- Top-ranking officials of political parties
Medium-High Risk – PEP Class 2
- Member of regional governments, parliaments and judiciary
- Senior officials and functionaries of international and supranational organisations
- Senior members of religious groups
- Ambassadors, consuls, high commissioners
Medium Risk – PEP Class 3
- Senior management and board of directors of state-owned businesses and organisations – e.g. Chairman of a Bank
- Heads of agencies, state-owned enterprises, and other institutions under regional governments
Low Risk – PEP Class 4
- Mayors and members of local county, city and district assemblies
- Senior officials and functionaries of international or supranational organisations
- Judges of local courts
You can find an in-depth breakdown of what constitutes a PEP on our supplier's knowledge hub here: Who Are Politically Exposed Persons (PEP) And Why Do They Matter?