National
National positions
"Senior officials of the General State Administration, ministers, secretaries of state, members of Congress, senators and other prominent public functions at national level."
Politically Exposed Persons (PEP): What They Are and What Measures Apply
We help you identify and manage politically exposed persons (PEPs), also called persons with public responsibility, under Article 14 of Law 10/2010: detection, management approval, source of wealth and source of funds, enhanced monitoring and the two-year period after leaving office.
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- PEP regime
- Art. 14
- Measures after leaving office (minimum)
- 2 years
- Municipal PEP threshold
- 50,000 inhabitants
- Enhanced measures required
- 4 measures
Services
How we handle your PEP customers
Six building blocks to detect and manage politically exposed persons under Article 14 of Law 10/2010, from identification to source of wealth, enhanced monitoring and the period after leaving office.
Detection
PEP detection and identification
We implement risk management procedures to determine whether the customer or the beneficial owner is a politically exposed person, integrated into your customer acceptance policy.
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Art. 14Law 10/2010KYCScreening
EDD
Enhanced due diligence measures
We design the enhanced measures that the PEP regime requires: senior management approval, source of wealth and source of funds, and enhanced, ongoing monitoring.
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EDDApprovalMonitoring
Inner circle
Family members and close associates
We extend the enhanced measures to the PEP’s family members and close associates, identifying the connection and its impact on the business relationship.
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Family membersClose associates
Source
Source of wealth and source of funds
We document the PEP’s source of wealth and source of funds, one of the specific measures required by Article 14.
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WealthFunds
Procedures
Procedures and acceptance policy
We build PEP detection and handling procedures into your AML/CFT manual and customer acceptance policy.
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ManualAcceptance
After leaving office
Two-year period and risk-based approach
We manage the period of at least two years after the person leaves office and the subsequent analysis of the continuing risk to decide whether to keep the measures in place.
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2 yearsRisk
Who they are
Who counts as a politically exposed person
PEPs are not only senior national officials: the regime extends to regional and local government, political parties, trade unions and employers’ organizations, international organizations, and family members and close associates.
Regional and local
Regional and local positions
"Regional presidents and ministers, regional parliament members and, at local level, mayors and councilors of municipalities with more than 50,000 inhabitants."
Parties and similar
Parties, trade unions and employers’ organizations
"Senior management positions in political parties, trade unions or employers’ organizations, as well as in international organizations."
Inner circle
Family members and close associates
"Spouse or person in an equivalent relationship, parents, children and their spouses, and associates with close business ties to the PEP."
Why it matters
Why is the PEP regime so demanding?
Politically exposed persons pose a higher risk of corruption and money laundering, so the law requires enhanced measures. Failing to detect them or to apply the measures correctly is one of the deficiencies SEPBLAC reviews most often.
The starting mistake: failing to detect the PEP. Without risk management procedures, you cannot know whether a customer or beneficial owner is a politically exposed person.
The relationship needs sign-off: you must obtain approval from at least the next management level up to establish or maintain a business relationship with a PEP.
The source of wealth matters: you must take measures to establish the PEP’s source of wealth and source of funds.
Art. 14 Law 10/2010
Family members and close associates
The enhanced measures also extend to the family members and close associates of the politically exposed person.
After leaving office
2 years
PEP treatment continues automatically for at least two years after the person leaves office.
Monitoring
Enhanced
A business relationship with a PEP requires enhanced, ongoing monitoring, not a one-off check.
Do you have customers who may be PEPs?
If your customers or their beneficial owners may include politically exposed persons, you should review your detection procedures, management approval, source of wealth checks and enhanced monitoring.
Frequently asked questions
PEPs: common questions
What is a politically exposed person (PEP)?
It is a person who holds or has held prominent public functions and therefore poses a higher risk of corruption and money laundering. AML rules require enhanced due diligence measures to be applied to them.
What does Spanish law call it?
Law 10/2010 uses the term "persona con responsabilidad pública" (PRP, person with public responsibility) in Article 14 to refer to what the EU directive calls a politically exposed person, or PEP ("persona del medio político" in its Spanish version).
Who are PEPs?
Among others:
- Senior national government officials, ministers, members of Congress and senators.
- Regional presidents and ministers, and regional parliament members.
- Mayors and councilors of municipalities with more than 50,000 inhabitants.
- Senior management positions in parties, trade unions and employers’ organizations.
It does not include mid-level or junior public employees.
Do family members and close associates count too?
Yes. The enhanced measures also apply to family members (spouse or partner, parents, children and the children’s spouses) and to close associates (people with close business ties to the PEP).
Which measures must be applied?
The four measures of Article 14:
- Risk management procedures to detect PEPs.
- Approval from at least the next management level up.
- Establishing the source of wealth and source of funds.
- Enhanced, ongoing monitoring of the relationship.
Do domestic PEPs count too?
Yes. Initially, the enhanced measures applied only to foreign PEPs, but the amendment introduced by Law 19/2013 extended the regime to domestic PEPs, an approach reinforced by later reforms.
How long do the measures apply after leaving office?
PEP treatment continues automatically for at least two years after the person leaves office. After that, the obliged entity applies appropriate measures based on the continuing risk, until it determines that the person no longer poses a specific risk.
Where can you check whether someone is a PEP?
Through internal risk management procedures, screening tools and, as support, the lists of positions and functions published by the Commission for the Prevention of Money Laundering and the Spanish Treasury. PEP status must be assessed case by case.
People also ask
Family members, close associates, approval and the AMLR
Who is a "family member" of a PEP?
The spouse or person in an equivalent relationship, parents, children, and the children’s spouses or partners in an equivalent relationship. The enhanced measures also apply to them.
Who is a "close associate"?
A person who has close business ties with the PEP, or who is the beneficial owner of a legal entity or arrangement set up for the PEP’s benefit. You should document the connection.
Is a public employee a PEP?
Not in itself. The PEP regime does not include mid-level or junior public employees; it covers those who hold prominent public functions as listed in Article 14.
Who approves a relationship with a PEP?
You must obtain approval from at least the next management level up to establish or maintain a business relationship with a politically exposed person.
Does being a PEP prevent someone from being a customer?
No. Being a PEP is not grounds for automatic rejection; what it requires is applying enhanced due diligence measures and properly managing the risk associated with the relationship.
What changes with the EU AMLR?
The new Regulation (EU) 2024/1624 (AMLR) maintains and harmonizes the PEP regime across the EU and applies from July 10, 2027, so it makes sense to have robust procedures in place ahead of that date.
Due diligence by profile
Standard customer, PEP, family member and close associate: comparison
Not all customers require the same level of due diligence. We help you calibrate the measures to each profile and document them so they stand up to a SEPBLAC review.
What determines the scope of the work
Managing PEPs depends on your number of customers, the type of business and the quality of your detection and monitoring procedures.
- Detection
- Risk management procedures and screening tools.
- Source
- Documenting the source of wealth and source of funds.
- Inner circle
- Identifying the PEP’s family members and close associates.
- Monitoring
- Enhanced monitoring system and review after leaving office.
How we handle the PEP regime
We start from your customer acceptance procedures, implement detection and settle approval, source of wealth and monitoring.
- Assessment of PEP detection and of the customer acceptance policy.
- Enhanced measures: approval, source of wealth and monitoring.
- Managing the inner circle (family members and close associates) and the period after leaving office.
| Profile | Standard customer | PEP (PRP) | PEP family member | PEP close associate |
|---|---|---|---|---|
| Due diligence | Standard (risk-based) | Enhanced | Enhanced | Enhanced |
| Senior management approval | No | Yes | Yes | Yes |
| Source of wealth | Risk-based | Mandatory | Mandatory | Mandatory |
| Monitoring | Ongoing | Enhanced | Enhanced | Enhanced |
| After leaving office | Not applicable | At least 2 years | Linked to the PEP | Linked to the PEP |
Indicative table. The exact scope of the measures follows from Article 14 of Law 10/2010 and Royal Decree 304/2014, and must be calibrated to the risk of each business relationship.
Operational guide
How to manage a PEP customer: a practical guide
Managing a politically exposed person does not mean rejecting them: it means detecting them in time, approving the relationship at the right level, documenting their source of wealth and maintaining enhanced monitoring for as long as the risk lasts.
Detect before onboarding
Without risk management procedures, you cannot know whether a customer or beneficial owner is a PEP. Detection is built into the customer acceptance policy, before the relationship begins.
Approve and document
The relationship needs management approval and documentation of the source of wealth and source of funds, with enhanced, ongoing monitoring of activity.
Review after leaving office
When the person leaves office, the measures remain in place for at least two years; after that period, the continuing risk is analyzed to decide whether to keep applying them.
10-step PEP management checklist
- Procedures: build risk-based PEP detection into the customer acceptance policy.
- Customer and beneficial owner: check whether the customer or their beneficial owner is a PEP.
- Inner circle: identify the family members and close associates concerned.
- Classification: document PEP status and the position that gives rise to it.
- Approval: obtain approval from at least the next management level up.
- Source: document the source of wealth and source of funds.
- Risk: assess the risk of the relationship and calibrate the measures.
- Monitoring: set up enhanced, ongoing monitoring.
- Leaving office: start the two-year period when the person leaves the position.
- Review: once the period is over, analyze the continuing risk and decide.
If you want to review how you handle PEPs, see our anti-money laundering (AML/CFT) practice area or our page on enhanced due diligence measures.
PEP management in practice
From detection to monitoring after leaving office
The PEP regime rests on four pillars: detecting the customer, approving the relationship, documenting the source of wealth and monitoring on an enhanced basis. Here is a visual overview of how it works in practice.
1) DetectDetect: is it a PEP?
The starting point is to determine, through risk management procedures, whether the customer or their beneficial owner is a politically exposed person.
- Customer and beneficial owner
- Family members and close associates
- Screening and lists
2) ApproveApprove: the management level
Establishing or maintaining a relationship with a PEP requires approval from at least the next management level up.
- Management approval
- Documented decision
- Acceptance policy
3) DocumentDocument: source of wealth
Measures are taken to establish the source of the wealth and funds involved in the relationship and the transactions.
- Source of wealth
- Source of funds
- Supporting documents
4) MonitorMonitor: enhanced monitoring and leaving office
A relationship with a PEP requires enhanced, ongoing monitoring. When the person leaves office, the measures remain in place for at least two years and are then reviewed based on the continuing risk.
Tip: recording the date the person left office and the subsequent risk analysis helps you avoid applying too many or too few measures.
Quick decisionPractical map: do I apply PEP measures?
Art. 14 position
It is a PEP: apply the enhanced measures from the start of the relationship.
Family member or close associate
The enhanced regime also applies, linked to the PEP.
Left office more than 2 years ago
Analyze the continuing risk to decide whether to keep the measures.
PEP playbook
The PEP regime, phase by phase
Detection
Determine, through risk management procedures, whether the customer or beneficial owner is a PEP.
Screening result and customer file.
Approval
Obtain approval from the next management level up to establish or maintain the relationship.
Minutes or record of the management approval.
Source of wealth
Take measures to establish the source of wealth and source of funds.
Source of wealth and funds file.
Monitoring
Carry out enhanced, ongoing monitoring of the business relationship.
Log of reviews and alerts.
After leaving office
Keep the measures for at least two years and review the continuing risk.
Risk analysis after leaving office.
Common mistakes with PEPs
Spot them before SEPBLAC flags them.
- Failing to detect the PEP for lack of risk management procedures.
- Establishing the relationship without management approval.
- Not documenting the source of wealth and source of funds.
- Forgetting the PEP’s family members and close associates.
- Withdrawing the enhanced measures before two years have passed since the person left office.
Operational glossary
Key concepts of the PEP regime
If you manage customers who may be politically exposed persons, these terms appear in Article 14 and in your procedures. Understanding them helps you apply the measures with sound judgment.
PEPBasics
Politically exposed person
A person who holds or has held prominent public functions; they pose a higher risk of corruption and money laundering.
Called "persona del medio político" in the Spanish version of the directive.
PRPLegal term
Person with public responsibility
The term that Law 10/2010 uses for PEPs in Article 14 (persona con responsabilidad pública).
Art. 14 of Law 10/2010.
FunctionsScope
Prominent public functions
National, regional and local positions (municipalities with more than 50,000 inhabitants), and positions in parties, trade unions, employers’ organizations and international organizations.
Does not include mid-level or junior positions.
Family memberInner circle
PEP family member
Spouse or equivalent partner, parents, children and the children’s spouses, who are also covered by the enhanced measures.
Extension of the regime.
Close associateInner circle
PEP close associate
A person with close business ties to the PEP, or the beneficial owner of a vehicle set up for the PEP’s benefit.
Also subject to enhanced measures.
ApprovalMeasure
Senior management approval
Approval from at least the next management level up to establish or maintain a relationship with a PEP.
Art. 14 of Law 10/2010.
SourceMeasure
Source of wealth and funds
Measures to establish where the wealth and funds involved in the business relationship come from.
PEP-specific measure.
MonitoringMeasure
Enhanced monitoring
Enhanced, ongoing scrutiny of the business relationship while the person holds PEP status.
Goes beyond ordinary monitoring.
PeriodAfter leaving office
Two-year period
The measures remain in place automatically for at least two years after the person leaves office; after that, a risk-based approach applies.
Art. 14(9) of Law 10/2010.
Contact
Book a call
Tell us about your situation with customers who may be PEPs and we will help you implement detection, approval, source of wealth checks and enhanced monitoring.
Legal framework for politically exposed persons: Article 14 of Law 10/2010
The concept of the politically exposed person (PEP) is regulated in Article 14 of Law 10/2010 of April 28 on the prevention of money laundering and terrorist financing, implemented by Royal Decree 304/2014. The law uses the term "persona con responsabilidad pública" (person with public responsibility) to refer to what the EU directive calls a politically exposed person ("persona del medio político" in its Spanish version).
Who is a PEP
Politically exposed persons are those who hold or have held prominent public functions: senior national government officials, regional presidents and ministers, regional parliament members, mayors and councilors of municipalities with more than 50,000 inhabitants, and holders of senior management positions in parties, trade unions, employers’ organizations and international organizations. The regime does not include mid-level or junior public employees and, since the Law 19/2013 amendment, it also covers domestic PEPs.
Enhanced measures
With a PEP, in addition to the standard measures, the obliged entity must apply risk management procedures to detect them, obtain approval from at least the next management level up, take measures to establish the source of wealth and source of funds, and carry out enhanced, ongoing monitoring of the relationship. These measures extend to the PEP’s family members and close associates.
Period after leaving office and the AMLR
PEP treatment continues automatically for at least two years after the person leaves office; after that period, the obliged entity applies appropriate measures based on the continuing risk, until it determines that the person no longer poses a specific risk (Article 14(9)). The new Regulation (EU) 2024/1624 (AMLR) will harmonize the PEP regime across the EU, applying from July 10, 2027.
AML/CFT services
Related areas
Resources and blog
Official sources
Key legislation, linked to the official text:
- Law 10/2010 of April 28 on the prevention of money laundering and terrorist financingBOE · consolidated text
- Regulation (EU) 2024/1624 of May 31, 2024 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financingEUR-Lex · Official Journal of the EU
- Royal Decree 304/2014 of May 5, approving the Regulation implementing Law 10/2010 of April 28 on the prevention of money laundering and terrorist financingBOE · consolidated text
Legislation and links reviewed in .