Politically Exposed Persons (PEPs) in Belgium: definition, verification and enhanced measures

In brief

A politically exposed person (PEP) is a natural person exercising or having exercised an important public function, as well as their close relatives and associates. In Belgium, the Act of 18 September 2017 requires systematic verification at every onboarding and re-screening at least annually. Failure to identify a PEP is a near-automatic sanction ground during an SPF Economie inspection.

What is a PEP

A PEP (Politically Exposed Person) is a natural person exercising or having exercised an important public function, as well as their close relatives and associates. The concept comes from FATF recommendations and was transposed into Belgian law via the Act of 18 September 2017 (Articles 4, 41 et seq.).

The stake: these persons have privileged access to public funds or influence power that exposes them particularly to corruption, abuse of power and money laundering risks.

The 3 PEP categories

Category 1 — Direct PEP

Person exercising or having exercised an important public function:

• Head of State or government

• Ministers and state secretaries

• Parliamentarians (Chamber, Senate, regional and community parliaments)

• Members of supreme or constitutional courts

• Senior military leaders (generals)

• Members of central bank governing bodies

• Ambassadors and chargés d'affaires

• Senior leaders of public companies (CEO of 100 % public entity)

• Members of governing bodies of national political parties

• Senior leaders of international organizations (EU, UN, NATO, ECB...)

Recently extended notion: presidents and CEOs of national chambers of commerce, leaders of public investment funds.

Category 2 — Close family members

• Spouse or registered partner

• Children and their spouses

• Parents

Not siblings, unless living under same roof or proven influence.

Category 3 — Persons known as closely associated

• Business partner in a company

• Common beneficial owner of a legal entity

• Any close and lasting business relationship

This is the hardest category to identify — requires active investigation.

PEP status duration

A person remains classified PEP for at least 12 months after end of functions. Beyond, the regulated entity evaluates residual risk: former Prime Minister 10 years ago = still high risk in first post-mandate years. Former local parliamentarian 5 years ago = risk potentially neutralized.

Verification obligations

Article 41 of the Act of 18/09/2017 requires, for every business relationship:

Identify whether the client (or UBO or representative) is PEP

Document the determination

If PEP: apply enhanced measures

Mandatory enhanced measures

• Senior management approval (CEO, manager, executive committee) before onboarding

• Source-of-funds verification documented with probative evidence

• Enhanced monitoring of operations (quarterly review minimum)

• Mandatory annual review of the file

These measures add to standard KYC, they do not replace it. See our KYC guide and our mandatory KYC file documentation guide.

How to identify a PEP

Source 1 — Client self-declaration

At initial KYC, ask explicitly: "Are you or have you been in the last 12 months a politically exposed person?". Document the written answer.

Source 2 — Official lists

Multiple PEP lists exist:

• Belgian list of important public functions (published by SPF Finances)

• Commercial lists consolidated by specialized providers (closed sources, continuously updated)

• Public sources: parliamentarians register, ministerial org charts, official communiqués

Source 3 — Automatic screening

RegTech tool cross-checking identifiers (name, DOB, nationality) with an updated consolidated PEP database. With fuzzy matching to tolerate spelling variants.

Source 4 — Complementary manual research

For categories 2 and 3 (relatives, associates), often absent from commercial lists:

• Press searches

• BCE consultation for co-shareholders

• Professional social networks

• Public registers (UBO, Belgian Official Journal)

Screening process

Step 1 — First check at onboarding

At initial KYC, cross-check:

• Client (natural person) or director / UBO (legal person)

• Known spouses and children

• Known co-shareholders from the UBO cascade

Step 2 — Result documentation

• Date of screening

• Tool or source used

• Result (PEP / non-PEP / partial match to clarify)

• AMLCO or delegate signature

Step 3 — Ongoing monitoring

The situation can evolve:

• A non-PEP client at start can be elected to public office

• A relative can be promoted

→ Annual re-screening minimum, ideally continuous via PEP webhook.

Step 4 — Action on hit

If positive match:

• Risk reassessment (Low → High)

• Management approval (dated and signed minutes)

• Source-of-funds documentation

• Enhanced measures applied

• Or even refusal if risk deemed unmanageable

Frequent mistakes

Self-declaration only: relying solely on what the client says → insufficient

Initial screening without re-screening: political situation evolves

Categories 2 and 3 ignored: client is screened but not their family

Generic enhanced measures: just "enhanced monitoring" without concrete procedure

No annual review: file appears frozen

Foreign PEP neglected: only Belgian PEP screened while EU/UN lists are mandatory

No written management approval

No source-of-funds documentation

Mixing PEP and sanctions: two distinct lists

No procedure for former PEPs (residual duration)

How Company Belgium integrates PEP screening

• National + international consolidated PEP list

• Fuzzy matching on name + DOB + nationality

• Automatic screening at KYC + continuous re-screening via webhook

• Coverage of the 3 categories (direct, relatives, associates)

• Risk grade automatically re-evaluated on hit

• Integrated management approval workflow

• Timestamped documentation of every screening

• 10-year retention

See the full AML module, the risk assessment methodology and the obligations for obligated entities in Belgium.

Bottom line

A PEP is a politically exposed person + their relatives and associates. PEP verification is systematic for every onboarding and must be renewed at least annually.

Enhanced measures (management approval, source of funds, quarterly monitoring) are mandatory as soon as a PEP is identified. Written documentation is non-negotiable — an unidentified PEP = nearly automatic sanction on inspection.