Politically exposed persons under the AMLR: the twelve-month rule and the lists of prominent public functions
Articles 42 to 46 AMLR harmonise who counts as a PEP, require Member States to publish lists of prominent public functions and keep measures in place for at least twelve months after office. What changes for screening and reviews.
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Politically exposed persons have been part of AML law for two decades, but the definitions varied and the moment a person stopped being a PEP was left to the risk-based judgement of each institution. The AMLR keeps the risk-based approach but sets two fixed points.
Who is a PEP
Article 42 lists the prominent public functions: heads of state and government, ministers, members of parliament, members of supreme courts, board members of central banks and audit institutions, ambassadors, senior officers of the armed forces, members of the boards of state-owned enterprises, directors of international organisations, and, new in scope, heads of regional and local authorities above a population threshold. Article 43 requires each Member State and the EU institutions to publish a list of the functions that qualify; the Netherlands has done so through the Ministry of Finance, and the AMLR makes those lists the reference.
Family members and close associates
Article 44 extends enhanced measures to family members (spouse or partner, children and their partners, parents) and to persons known to be close associates: joint beneficial owners of entities or arrangements, or sole beneficial owners of an entity set up for the benefit of the PEP.
Twelve months after office
Article 45 sets the minimum: after a PEP ceases to hold the function, the obliged entity continues to apply risk-based measures for at least twelve months, and longer where the risk persists. The decision to stop treating a person as a PEP must be documented.
Life insurance
Article 46 requires insurers and intermediaries to check whether the beneficiary of a life-insurance policy, or its beneficial owner, is a PEP before pay-out, with senior approval and enhanced scrutiny where that is the case.
What changes for screening
- Screening lists must map to the published national and EU lists of functions, including the regional and local level.
- The end date of PEP status becomes a data field with a mandatory review after twelve months.
- Family members and associates need to be linked to the PEP record, not screened as separate names.
What to do now
- Compare your PEP definition with Article 42 and the national list; add the local-authority category where it applies.
- Implement the twelve-month clock in the customer file with an automatic review.
- Review life-insurance pay-out procedures for the PEP check.
AMLA's Guidelines on PEPs are in final draft; the dashboard tracks them under Client Acceptance.