Customer screening
PEP and Sanctions Screening for AML Compliance
PEP and sanctions screening are commonly performed together during customer due diligence, but the two checks serve different purposes. Sanctions screening can identify legal restrictions affecting a person or entity, while PEP screening identifies a risk factor that may warrant enhanced due diligence rather than automatic rejection.
Updated September 13, 2026 · Educational information, not legal advice.
Why businesses run both checks
A customer can be a politically exposed person without being sanctioned, sanctioned without being a PEP, both, or neither. Running both checks gives a compliance team distinct information about legal restrictions and potential corruption or influence risk.
What a sanctions result means
Sanctions screening compares identifying information against applicable sanctions and restricted-party data. For U.S. businesses, OFAC sanctions are a central consideration. A possible match should be investigated promptly because a true match can create legal restrictions or blocking obligations depending on the applicable sanctions program.
What a PEP result means
PEP status generally reflects a prominent public function and associated corruption or influence risk. Screening datasets may also identify certain relatives and close associates. PEP status alone does not mean a person has committed wrongdoing and is not equivalent to appearing on a sanctions list.
Investigate possible matches
Name matching can create false positives. Compare available identifiers such as date of birth, nationality, geography, addresses, aliases, public role, entity information, and other distinguishing data. The objective is to determine whether the screening record actually relates to the customer being reviewed.
Use risk-based enhanced due diligence for PEPs
Where PEP status is relevant to the organization's risk-based program, the review may consider the nature and seniority of the public role, jurisdiction, expected activity, transaction pattern, source of wealth or funds where appropriate, and other risk factors. The resulting controls should be proportionate to the assessed risk.
Document the disposition
Retain the screening result, identifiers reviewed, investigation notes, reviewer, date, conclusion, and any enhanced due diligence or escalation. A documented disposition is especially important when a potential match is cleared or an elevated-risk relationship is approved.
PEP and sanctions screening with PeakAML
PeakAML supports PEP and sanctions screening workflows and retention of screening evidence. Organizations should define which checks apply, how potential matches are investigated, when enhanced due diligence is required, and who has authority to approve escalated results.
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