Overview
PEP and Watchlist are two types of risk flags that can appear when you screen someone during verification. They're part of how CX Platform helps you meet your anti-money laundering and counter-terrorism financing (AML/CTF) obligations — the checks that confirm you know who you're dealing with before you go ahead.
It's worth knowing up front: a flag doesn't automatically mean something's wrong. It's a prompt to pause and take a closer look, not a verdict. Most flagged records are perfectly legitimate — the point is that someone reviews them before they're cleared.
What is a politically exposed person (PEP)?
A politically exposed person (PEP) is someone who's been entrusted with a prominent public function — for example, a head of state, a senior politician, a senior government, judicial or military official, or a senior executive of a state-owned organisation.
Because of the influence and access that come with these roles, a PEP carries a higher risk of involvement in bribery or corruption. That's not a judgement about the individual — it simply means the relationship warrants a bit more scrutiny.
PEP status often extends beyond the person themselves to their immediate family members and close associates, since they can be exposed to the same risks by association.
What is the Watchlist?
The Watchlist flags someone who appears on a Counter-Terrorism list. Where a PEP flag is about heightened risk, a Watchlist match is a more serious signal that needs careful handling.
A match here means the details you've screened line up with an entry on that list, so the record can't simply be waved through — it goes to review like any other flag, just with extra care.
What happens when someone is flagged?
In either case — whether someone is identified as a PEP or appears on the Watchlist — they'll require review and approval before you can proceed. The record is held for a person to assess rather than being cleared automatically.
Review and approval is required
A PEP or Watchlist flag can't be cleared on its own. Someone with the right access needs to review the match and approve it before the record moves forward. This keeps a human in the loop on every higher-risk decision.
Handling a flagged record
When a record comes up flagged, a few simple habits will keep your reviews consistent and your records clean:
- Check it's a genuine match. Name-based screening can throw up false positives — two people sharing a name, for instance. Confirm the match is the same person before acting on it.
- Treat a PEP flag as a prompt, not a rejection. A PEP flag triggers a closer look (often called enhanced due diligence), not an automatic decline.
- Follow your organisation's policy. Your compliance team will have a process for who reviews and approves these records — when in doubt, escalate rather than guess.
- Record your reasoning. Note why a record was approved or held. A clear trail makes future audits and reviews far easier.
Tip
If you're ever unsure whether a flag is a true match or a false positive, hold the record for review rather than clearing it. It's always easier to release a record after a quick check than to walk back an approval later.
That's the essence of it — PEP and Watchlist flags are there to help you spot higher-risk records early. Once you've reviewed a flagged record and it's been approved, it carries on through your normal process just like any other.