Under a risk-based approach, is the rule 'Once a PEP, always a PEP' absolute?

Under a risk-based approach, is the rule 'Once a PEP, always a PEP' absolute?

• A. Yes
• B. No
• C. Sometimes
• D. Not applicable

Answer: (C)

In a risk-based AML approach, PEP status isn’t fixed for everyone. The idea is to reassess the level of risk continuously based on current circumstances, rather than applying a blanket rule for all time. A person who is or was a PEP may require enhanced due diligence while in a high-risk role, but once their public office ends or their influence changes, the risk profile can shift. This means you don’t treat a PEP as automatically staying in the high-risk category forever; you re-evaluate periodically and in response to new information or events. So, the rule is not absolute—there are cases where someone remains high risk and cases where their risk level decreases, depending on the current situation and the outcomes of your ongoing risk assessment. That nuance is captured by selecting “Sometimes,” reflecting the dynamic nature of risk-based monitoring.

In a risk-based AML approach, PEP status isn’t fixed for everyone. The idea is to reassess the level of risk continuously based on current circumstances, rather than applying a blanket rule for all time. A person who is or was a PEP may require enhanced due diligence while in a high-risk role, but once their public office ends or their influence changes, the risk profile can shift. This means you don’t treat a PEP as automatically staying in the high-risk category forever; you re-evaluate periodically and in response to new information or events. So, the rule is not absolute—there are cases where someone remains high risk and cases where their risk level decreases, depending on the current situation and the outcomes of your ongoing risk assessment. That nuance is captured by selecting “Sometimes,” reflecting the dynamic nature of risk-based monitoring.