How to screen for Politically Exposed Persons

How to screen for Politically Exposed Persons

Find out what a PEP list, what kinds are out there and if it’s worth relying on free PEP screening options.

What is a PEP List?

A PEP list is a database of known Politically Exposed Persons - that is, individuals who hold a prominent position of influence or function either in their home country or internationally. You can learn all about the different types of political persons from this earlier article on our blog.

PEPs, by the nature of their position in society, are more vulnerable to bribes, money laundering schemes and other types of financial crime. In order to minimize the risk of unknowing involvement with such persons, various legal bodies come up with the so-called PEP Lists. A PEP List is a sort of database of all individuals exposed to significant political and financial power or influence.

2 Kinds of PEP Lists

There are 2 approaches to composing a PEP list. Here they are:

Approach 1: A database of confirmed PEPs The list contains anyone who is a named Politically Exposed Person. Such lists, however, are rarely exhaustive as it’s virtually impossible to account for all influential people in all jurisdictions. If an individual is not on the list, this should by no means be taken as a definitive proof that they are not a PEP.

Approach 2: A database of public functions, positions and roles that would qualify a person as a PEP. This one is not without its downsides, either, as you can imagine. While it does provide some crucial context, this database can not be used for PEP screening on its own.

Free Lists for PEP Screening

In an attempt to cut costs, many businesses look to free options for PEP screening. There are quite a few a few organizations out there that publish free information, but almost none of those databases provide data exhaustive enough to ensure full AML protection.

Still, here are the options you can consult:

CIA World Leaders List An online directory published by the CIA of “Chiefs of State and Cabinet Members of Foreign Governments.” The directory is updated weekly.

EveryPolitician.org A project to “collect and share data about every politician in every country in the world, in a consistent, open format that anyone can use.” As of writing of this article, the site has collected the data for 78,382 politicians from 233 countries and paused its operation.

LittleSis.org LittleSis.org cites itself as a “free database detailing the connections between powerful people and organizations.” A who-is-who in the sphere of global influence.

CIBOD Biographies of Political Leaders (Only in Spanish) Biographies on 766 political leaders from around the world. The resource strives to be “useful in the fields of education, research, consulting, journalism and politics” or to anyone interested in global politics.

Rulers.org Rulers.org is a bare-bones resource that contains a list of heads of state and heads of government of all countries and territories, going back to about 1700.

Central Bank of Uruguay PEP List (Spanish only) This is a PEP list made at the request of the Central Bank of Uruguay. The list includes approximately 1,800 people who hold or once held public functions of importance in Uruguay and abroad.

Important:

Please keep in mind that most of these free resources do not include local governments, international organization PEPs, as well as family members or close associates of PEPs. As the Financial Action Task Force (FATF) recommendations mention, these lists have potential shortcomings as they may not be complete (lacking names, identifiers, relatives), and are quickly outdated.

What Makes a Good PEP Database?

Now you know why a PEP database may not be as reliable as you’d hope it would be. What makes a good PEP list, then?

Long story short — having as many unique identifying data as possible. In combination with a thorough customer card, such a database will critically reduce the number of false positives.

Ideally, unique identifying data should include the following:

1. Name (all known names and aliases)
2. Date of Birth (if available), Year of Birth
3. Country of political exposure
4. Gender (where available)
5. Politically exposed role(s), and date(s) or year(s) of appointment
6. Date of death (if applicable).

Does the Perfect PEP List Even Exist?

Well, the short answer is “No”. Most if not all PEP databases have some kind of shortcoming, be it outdatedness, limited applicability or lack of unique identifying data. The good news is — you don’t have to rely on one database. And no, it doesn’t mean your have to splurge on several different ones.

Your PEP screening can be both comprehensive and cost-effective. The solution lies in selecting a screening provider that aggregates data across all publicly available sources. A provider like DataSpike. DataSpike’s database contains just under a million unique entries for both companies and people with new ones added daily.

You never risk running your screening against outdated or incomplete data, as this simplistic yet powerful AML compliance software relies on AI and machine learning to acquire relevant information upon request. Sign up now to test DataSpike to test DataSpike no strings attached!