Q&As

Is a member of the House of Lords (who does not hold any ministerial role) considered to be a politically exposed person under the Money Laundering Regulations 2017?

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Published on LexisPSL on 04/05/2018

The following Practice Compliance Q&A provides comprehensive and up to date legal information covering:

  • Is a member of the House of Lords (who does not hold any ministerial role) considered to be a politically exposed person under the Money Laundering Regulations 2017?
  • What is a PEP?
  • My client is a PEP, what next?
  • SRA Ethics guidance
  • FCA guidance
  • HM Treasury-approved Anti-Money Laundering Guidance for the Legal Sector

Is a member of the House of Lords (who does not hold any ministerial role) considered to be a politically exposed person under the Money Laundering Regulations 2017?

STOP PRESS: Draft Legal Sector Affinity Group (LSAG) AML guidance was published on 20 January 2021. It awaits approval by HM Treasury and any content may be amended before the final version is published with the Treasury's approval. This document reflects HM Treasury approved LSAG AML guidance published in 2018 and will be updated in due course.

You must apply enhanced due diligence (EDD) measures and enhanced ongoing monitoring where you have determined, in accordance with reg 35, that the client/potential client is a politically exposed person (PEP).

Regulation 35 requires you to determine:

  1. if the client/beneficial owner is a PEP

  2. the level of risk associated with the client, and

  3. the extent of the EDD measures to be applied

So it is for you to determine, on a case-by-case basis, whether a particular client is a PEP.

What is a PEP?

A PEP is an individual who is entrusted with prominent public functions, other than as a middle-ranking or more junior official, including:

  1. heads of state, heads of government, ministers and deputy or assistant ministers

  2. members of parliament or of similar legislative bodies—similar legislative bodies include regional governments in federalised systems and devolved administrations, including the Scottish Executive and Welsh Assembly, where

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