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PEP
PEP & Sanctions Screening
Politically Exposed Person (PEP) and sanctions screening for AUSTRAC reporting entities. Learn about enhanced due diligence requirements, foreign PEP obligations, and AML/CTF compliance for Australian businesses.
Key Information
AUSTRAC Requirements
PEP Screening: What It Is and Why You Can't Skip It
Ever heard of a Politically Exposed Person? If not, you're about to become very familiar. PEPs are individuals who hold (or recently held) prominent public positions - think government ministers, judges, military generals, heads of state-owned enterprises. Their family members count too. So do close associates.
Why does AUSTRAC care? Simple: power creates opportunity. And opportunity creates temptation. PEPs aren't criminals by default - most aren't. But they're higher risk for corruption, bribery, and money laundering. Just because of who they are.
Here's what you need to do:
Screen every customer against PEP databases - not just once, but continuously. Someone who wasn't a PEP yesterday might be today.
If you find a PEP, Enhanced Due Diligence kicks in: verify source of funds and wealth, get senior management approval before onboarding, and monitor more frequently than regular customers.
Sanctions screening is similar, but different.
While PEPs are about risk, sanctions are about law. You're checking if your customer appears on any sanctions lists - DFAT Consolidated List, UN Security Council sanctions, the works.
Find a match? Stop. Do not onboard. Report to AUSTRAC immediately.
The penalties for getting this wrong aren't theoretical. They're very, very real.
Key Requirements
AML/CTF Program
Develop and maintain a tailored compliance program.
Customer Due Diligence
Identify and verify your customers before providing services.
Reporting Obligations
Submit required reports including SMRs and TTRs.
Frequently asked questions
What are the key obligations?
Key obligations include enrolling with AUSTRAC, developing an AML/CTF program, conducting customer due diligence, and meeting reporting requirements.
When do obligations start?
For Tranche 2 entities (including reporting entities), obligations commence 1 July 2026. Enrolment opens 31 March 2026.
What records must I keep?
You must maintain accurate records of your AML/CTF program and compliance activities. Most records must be retained for 7 years.
Related resources
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