Risk Assessment

PEP status triggers the measures required by the MLRs but does not by itself mean that the person or matter should be assessed as high risk. The nature and extent of those measures must be proportionate.

The starting point for a domestic PEP, their family member or known close associate is that they present a lower level of risk than a non-domestic PEP, unless other risk factors indicate otherwise. Family members and close associates are not themselves PEPs, even though the prescribed measures apply to them.

The definition of a PEP excludes middle-ranking and junior officials. The relevant measures continue to apply to a former PEP for at least 12 months after they leave office and longer where necessary to address continuing risk.

The responsible lawyer should consider the PEP relationship in the context of the client, matter and source of funds. Factors that may be relevant include:

• the seniority and influence of the public office held;
• whether the public office held is domestic to the UK or international;
• whether the individual remains active in public office;
• the level of corruption risk associated with the relevant jurisdiction;
• the nature of the proposed instruction;
• the complexity of ownership, control or funding arrangements;
• whether public office could reasonably be connected to the generation of wealth or the assets involved; and
• whether any adverse media, sanctions, criminal proceedings or other concerns have been identified.

The objective is not merely to identify a PEP relationship, but to understand the risks arising from it and determine whether those risks can be managed appropriately.