Anti-money laundering

My client is a member of a UK political party. Do they count as a politically exposed person?

I’m acting for a purchaser of residential property. My client is a member of a UK political party. Are they a politically exposed person (PEP)? If so, will the PEP rules also apply to their spouse living in the property?

Regulations 35 and 36 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 deal with politically exposed persons (PEPs).

The definition of a PEP applies to all persons appointed by governments and authorities anywhere in the world, including in the UK.

A PEP is a person who has been entrusted within the last year (or for a longer period if you consider it appropriate to address the risks in relation to that person) with a prominent public function by a community institution, an international body, or a state.

Middle-ranking and junior officials are not PEPs.

Members of political parties would not be regarded as PEPs nor would members of their family.

However, members of the governing body of a political party with some representation in a national or supranational parliament and their family members and known close associates will be regarded as PEPs.

Generally, this will only include members of the national governing body of the party who have significant executive power (for example, significant power in the selection of candidates or the distribution of party funds).

If your client's spouse is not going to be a co-owner or client of your firm then the Money Laundering Regulations are not applicable.

Regulation 35 sets out a full list of who would be regarded as a PEP.

For more information, see the anti-money laundering guidance for the legal sector.

You should also refer to the Financial Conduct Authority guidance on the treatment of politically exposed persons for anti-money laundering purposes.

Disclaimer

While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.

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