There are three statutory types
The AML/CTF Act recognises domestic, foreign and international organisation politically exposed persons. The definitions extend beyond a person's job title and include specified family and close business connections. An international organisation PEP can include a person with a prominent role in a public international organisation and specified connected individuals.
The type of PEP and their role in the customer relationship both matter. A PEP classification is a legal and risk fact. It is not a finding that the person is corrupt.
The definitions also include family members and specified close business associates of relevant office holders. Known joint beneficial ownership, ownership for the office holder’s benefit, and other close business relations can qualify. The knowledge test uses public or readily available information.
Sources: Federal Register of Legislation: Section 5 PEP definitions; sections 28(2)(e) and 32(c); Federal Register of Legislation: Sections 5-5(1)(a) to (c) and 6-23.
- Resolve identity
A possible name match is not a confirmed identity.
- Identify the type
Domestic, foreign or international organisation PEP.
- Identify the role
Identify how the person is connected to the customer and service.
- Apply exact conditions
Enhanced CDD, source checks and approvals have distinct provisions.
- Record the decision
Keep the evidence and resulting action visible.
Resolve PEP status before choosing the response
Read each applicable provision. This diagram does not treat all PEP types or connected-person roles identically.
Decision checkpoints. Read the conditions for each point in the text below.
Separate the resulting duties
Section 28 includes establishing relevant PEP status. Section 32(c) requires enhanced CDD for the specified foreign PEP connections, including a person acting on the customer's behalf. Rules 6-23 addresses source of funds and wealth for specified persons: foreign PEPs, and domestic or international organisation PEPs where customer risk is high.
Rules 5-5 also requires senior manager approval before starting services in its specified PEP cases. The persons and conditions in these provisions are not identical. Examine each duty directly. This page focuses on Australian delivery; Rules 6-23 contains a special foreign-establishment treatment that requires separate examination when relevant.
Rules sections 6-23 and 5-5 list the customer, a beneficial owner, or a person on whose behalf the customer receives the service. They do not list a representative solely because the representative acts for the customer. Section 32(c) does include that representative.
Sources: Federal Register of Legislation: Section 5 PEP definitions; sections 28(2)(e) and 32(c); Federal Register of Legislation: Sections 5-5(1)(a) to (c) and 6-23.
Resolve the person, position and connection
A screening result is a lead to assess. Examine whether the result concerns the same person, whether the position falls within the relevant definition, and how the individual is connected to the customer. Use appropriate identifying information and record any name variations. A supplier’s category label does not replace the statutory definition.
AUSTRAC advises businesses using third-party screening to examine whether the provider covers the positions and offices in the Act. This is useful when reviewing a supplier: ask what the result means, how the supporting information can be inspected and how changes are handled. Keep uncertainty about identity separate from uncertainty about whether a position or connection qualifies.
Sources: AUSTRAC: How to establish if an individual is a PEP; Identifying if a customer becomes a PEP; Former PEPs; Record keeping; Additional obligations for PEPs; Federal Register of Legislation: Sections 28, 30 and 32(c); Federal Register of Legislation: Sections 5-5, 6-23 and 6-24.
Invented example: a possible name match
A fictional screening search returns a name matching a public official. The reviewer compares appropriate identifying information before concluding that the customer is that person. A similar name is not the same as established PEP status, and a lack of an exact match is not proof that no connection exists.
If the match is confirmed, the reviewer identifies the PEP type and the person's role in the relationship. The response follows the relevant conditions. This example illustrates identity resolution. It does not recommend a particular screening supplier, set a universal matching threshold or determine a real person's status.
Sources: Federal Register of Legislation: Section 5 PEP definitions; sections 28(2)(e) and 32(c); Federal Register of Legislation: Sections 5-5(1)(a) to (c) and 6-23.
Invented example: when the representative is a foreign PEP
Suppose a fictional company appoints a representative who is confirmed to be a foreign PEP. The customer company’s usual risk score is low. Section 32(c) includes a person acting on the customer’s behalf, so the reviewer must examine the mandatory enhanced CDD obligation. A low general score does not cancel that trigger.
The reviewer then examines the other duties separately. Rules 6-23 and the specified approval cases in Rules 5-5 do not use exactly the same list of people as section 32(c). The representative’s status alone must not be used to assert that every PEP duty applies to every connected person. Other facts or requirements may still call for additional measures.
A useful record separates the confirmed identity, PEP category, relationship role, legal trigger and action. This makes the reasoning reviewable and avoids an automated high-risk label being mistaken for the entire decision. The example concerns Australian delivery and does not apply the special foreign-establishment treatment.
Sources: AUSTRAC: How to establish if an individual is a PEP; Identifying if a customer becomes a PEP; Former PEPs; Record keeping; Additional obligations for PEPs; Federal Register of Legislation: Sections 28, 30 and 32(c); Federal Register of Legislation: Sections 5-5, 6-23 and 6-24.
- Resolve the match
Is the screening result about the same individual?
- Identify the category
Apply the domestic, foreign or international organisation definition.
- Identify the role
Customer, owner, representative and beneficiary roles can affect the duty.
- Examine each duty
Assess enhanced CDD, funds and wealth, approval and ongoing requirements separately.
Match, category, role, duty
A decision aid, not a universal PEP checklist. The persons and conditions differ between provisions.
Follow the process from top to bottom.
Make the decision traceable
A practical note separates the evidence for the match, the applicable PEP category, the customer risk assessment and the resulting action. Where approval is required, identify the approval rather than assuming an automated result supplies it. If a possible match is rejected, record the reason.
Avoid descriptions that imply all domestic or international organisation PEPs are automatically high risk. Equally, do not overlook a foreign PEP trigger because a general score is low. This distinction helps staff apply proportionate checks without ignoring mandatory duties or treating public service itself as evidence of wrongdoing.
Sources: Federal Register of Legislation: Section 5 PEP definitions; sections 28(2)(e) and 32(c); Federal Register of Legislation: Sections 5-5(1)(a) to (c) and 6-23.
Plan for a change in public role
PEP status can change after onboarding. AUSTRAC’s guidance describes ongoing monitoring, specified updates and approvals when relevant people become PEPs. A periodic review should therefore consider changes in public roles and relevant connections, not merely rerun the original name with the original settings.
Leaving office also needs assessment. AUSTRAC distinguishes former PEP status from the risk that may remain through influence or connections, and identifies approval-policy requirements for specified former PEP cases. Do not invent a universal period after which all checks cease. A practical change record states what changed, the source and date, which requirements were considered, and who approved any resulting action.
Sources: AUSTRAC: How to establish if an individual is a PEP; Identifying if a customer becomes a PEP; Former PEPs; Record keeping; Additional obligations for PEPs; Federal Register of Legislation: Sections 28, 30 and 32(c); Federal Register of Legislation: Sections 5-5, 6-23 and 6-24.