A person who holds or has held a prominent public function, making them a higher risk for involvement in bribery, corruption, or money laundering. The term carries real weight in citizenship by investment. PEP status doesn't automatically disqualify someone—but it transforms the entire application process into something slower, more expensive, and significantly more scrutinized.
The Financial Action Task Force (FATF) provides the baseline: heads of state, senior politicians, senior government officials (judicial and military), senior executives of state-owned corporations, and important political party officials. This is just the start. The definition also reaches family members and close associates of PEPs. A PEP's spouse, adult children, business partners, and known associates all fall under enhanced due diligence. The net is intentionally wide because the risk theory is straightforward—these individuals have access to state resources and decision-making power, making them attractive corruption targets.
The definition applies three ways. You can be a domestic PEP (an official in your own country), a foreign PEP (an official in another country), or an international organization PEP (someone with authority at the UN, World Bank, IMF, or similar multilateral body). This distinction matters enormously for how you're treated.
Let's be direct: PEP status doesn't disqualify you from citizenship by investment. Malta accepts PEPs. Dominica accepts PEPs. Portugal's golden visa program accepts PEPs. But the friction is real and substantial.
A clean applicant might complete a citizenship by investment program in 90 days at a cost of $200,000 to $300,000 in fees (excluding the actual investment). A PEP in the same program might wait 180 days, pay $400,000 to $500,000 in additional compliance and legal costs, and still face a heightened chance of rejection. The government wants certainty that the money isn't proceeds of corruption. That certainty takes time and money to establish.
Some programs are explicitly PEP-friendly. Antigua and Barbuda has a more straightforward PEP process than some EU golden visa schemes. St. Kitts and Nevis has well-established precedent with PEP applications. Others treat PEP status as a near-automatic reason for further investigation. The investment amount matters too—a PEP investing $5 million faces less scrutiny than one investing the minimum $250,000.
Domestic PEPs (officials in their home country) are treated unevenly across jurisdictions. Singapore's banking system, for instance, is far stricter on domestic PEPs from certain countries than others. A former senior official from a jurisdiction with known corruption problems faces much higher scrutiny than a former finance minister from Norway. This isn't fair, exactly, but it reflects the practical risk assessment.
Foreign PEPs are always treated as high-risk under FATF guidelines. A former Chinese government official, a retired Brazilian politician, or a Gulf region family member with government ties faces enhanced scrutiny in nearly every jurisdiction. The assumption is that foreign officials might be holding assets that couldn't legally be held in their home countries—wealth accumulated through corruption, political connections, or family privilege that wouldn't survive scrutiny back home.
International organization PEPs (UN officials, World Bank staff, IMF employees) sit in a peculiar middle ground. They hold less direct political power than a head of state, but they're international actors with access to decision-making. They're typically treated less strictly than foreign heads of state but more strictly than a domestic local official.
The databases used in PEP screening are Refinitiv's World-Check (formerly Thomson Reuters), Dow Jones Risk & Compliance, and LexisNexis WorldCompliance. These pull from public records, sanctions lists, law enforcement data, media reports, and corporate databases. If you appear in any of these systems as a PEP, your CBI application will flag.
Here's the catch: false positives are endemic. Name matching is crude. A person named "Muhammad Hassan" might match dozens of officials across the Middle East. A former Spanish official named "Juan García" might trigger matches on Argentine and Mexican officials with similar names. Media reports from 15 years ago get permanently indexed. Old data lives forever in these systems.
The screening process usually works like this: the government or their appointed CBI agent runs your name through World-Check and similar databases. If a match appears, they escalate to a human investigator who then tries to determine if it's actually you. This often requires explaining why you share a name with a politician, or clarifying that you're a private citizen named José Silva, not the former finance minister of the same name.
A good CBI lawyer will run you through these databases before you apply. You might learn you have a flag you didn't know about. Clearing a false positive can take weeks and requires documentation proving you're not the person in the database.
How long after leaving office does someone stop being a PEP? FATF guidance says at least 12 months. After 12 months away from the position, most regulatory frameworks allow you to be considered a "former PEP" rather than an active PEP. But this creates a real problem: many financial institutions and jurisdictions treat former PEPs as permanently elevated risk anyway. Some banks apply the same enhanced due diligence to someone 10 years out of office as to someone currently serving.
There's no universal standard. A former politician who left office three years ago might be treated as a clean applicant by one jurisdiction and a high-risk PEP by another. This ambiguity creates practical headaches. You've left the office, but you haven't left the system. The elevated scrutiny can persist indefinitely, particularly if the country you served was politically sensitive.
This is a real problem that catches many CBI clients off-guard: PEPs have difficulty opening bank accounts in their new citizenship country, even after they've successfully acquired the passport. Banks apply enhanced due diligence to PEPs as a matter of policy. Some simply refuse PEP clients entirely, treating them as too risky for retail banking relationships.
A former South African government official who acquires Maltese citizenship might find that major Maltese banks won't open him an account. He's now a Maltese citizen, but he's also a PEP, and the bank's risk management system flags that. He ends up with a relationship at a smaller bank willing to take on the compliance burden, or he uses an offshore bank. The second passport doesn't solve the banking problem it was supposed to solve.
This is why some PEPs acquire second citizenship partly to rebuild banking relationships in a jurisdiction where they're not flagged as a PEP. A person with a history as a government official in country A might be treated as a routine applicant in country B because they have no PEP history there. It's not ideal, but it's practical.
Former African heads of state regularly seek Caribbean passports. They've left office (sometimes under pressure) and need a neutral jurisdiction where they can park wealth and conduct banking. A former Central African Republic official, a retired Kenyan politician, a former Zimbabwean finance minister—they all understand that their home countries won't be safe or financially accessible long-term. A Caribbean passport offers geographic distance and financial neutrality.
Gulf region officials and their families diversify citizenship for similar reasons. A retired Saudi official, a member of a royal family from a smaller Gulf state, or an Emirati businessman with government connections—they want a second passport in a jurisdiction without historical ties to their home country. Cyprus, Malta, or Portugal offer that distance while maintaining credibility in Western financial systems.
Former EU politicians use golden visa programs differently. A retired German politician, a former French government official, a Portuguese bureaucrat who left office—they're acquiring second residency and sometimes citizenship not to escape their home country, but to expand their options within Europe. The PEP status matters here, but it's less about flight risk and more about regulatory consistency.