3.2.3. Time Limits of PEP Status

يسري تنفيذه من تاريخ 1/8/2022

The definition of PEP in the AML-CFT Decision makes clear that a PEP does not cease to qualify as a PEP simply because they no longer hold a prominent public function (i.e. “Natural persons who are or have been entrusted with prominent public functions”). Nor does a Related Customer cease to require PEP treatment simply because the PEP to whom they are related no longer holds that position. A PEP’s risk (and, indirectly, the risk of a Related Customer) derives from the PEP’s power or influence over decisions, funds, or policy. Therefore, it may not be appropriate to continue to treat a customer as a PEP long after they have lost such power or influence. On the other hand, if PEP has amassed funds through corruption during his or her period in office, the PEP is likely to wait until being out of office to access or enjoy those funds. This means that the corruption risk remains even if a PEP has been out of office for a certain time.

Because each case is different it would not be appropriate for LFIs to apply a universal rule for determining whether a customer is no longer a PEP (e.g. one year after relinquishing the public position). Therefore, while LFIs may set a schedule to review PEP status, they should make a risk-based decision as to when sufficient time has passed for a customer to no longer be classified as a PEP. Factors to consider when making such a determination include:

	•	The seniority, prominence, and power inherent in the customer’s (or the customer’s beneficial owner’s) previous role.
	•	The corruption potential of the customer’s previous role. Where there was greater opportunity for illicit gain, it is more likely that the customer’s source of funds will continue to be corrupt proceeds for some time after the customer leaves office.
	•	Whether the customer still exercises informal influence over government decision-making through his or her current formal role (e.g. head of a prominent lobbying organization) or through informal relationships (e.g. the customer is an informal but widely accepted leader of a political party but has no official title).
	•	Whether the previous and current role of the customer are linked in any way;
	•	The customer’s relationships to other PEPs (e.g., if the customer is a retired politician whose children are involved in politics. In such cases the customer would also likely qualify as the family member of a PEP).
	•	The nature and purpose of the business relationship, and the overall risks of the products and services the customer avails or intends to avail.
	•	The customer’s relationship to the PEP. Family relationships tend to endure through time, but business relationships do not always persist. A customer who was formerly the close associate of a PEP, but who severed the business relationship some time ago, may present reduced corruption risk.