Which of the following describes a politically exposed person (PEP) according to the definitions?

Which of the following describes a politically exposed person (PEP) according to the definitions?

• A. A minor political figure within the country
• B. A senior politician in a foreign country
• C. A private citizen working in corporations
• D. A retired government employee

Answer: (B)

A politically exposed person (PEP) is generally defined as an individual who has been entrusted with a prominent public function, especially in a foreign country. This typically includes senior politicians, heads of state, and other high-ranking officials. Such individuals are recognized as having a higher risk of involvement in bribery and corruption due to their positions and potential access to state resources or decision-making processes.

Choosing a senior politician in a foreign country accurately reflects this definition, as it highlights the level of influence and authority that qualifies someone as a PEP. The designation aims to ensure enhanced scrutiny of transactions, as these individuals may require more thorough due diligence to mitigate risks associated with integrity and ethical conduct in finance and business dealings.

In contrast, a minor political figure or a private citizen working in corporations typically does not have the same level of influence, while a retired government employee may no longer have the authority or relevant connections that characterize a PEP.