PEP lists in compliance: What companies should know when checking business partners

PEP lists are increasingly becoming the focus of regulatory authorities, and not just in the financial sector. PEP checks are also becoming increasingly important for SAP user companies with international business relationships or public sector clients. 
But what does this mean in concrete terms for compliance processes? And how can such audit obligations be efficiently integrated into SAP systems?

PEP stands for ‘Politically Exposed Person’ - a term that describes people who are or have been active in important public offices. This includes, for example, ministers, members of parliament, senior judges or board members of state-owned companies. Their close relatives or close business partners can also fall under this definition. The background: these groups are considered to be particularly risky in terms of corruption, money laundering and unauthorised influence peddling.
Increasingly, companies from industry, logistics and trade are also coming into regulatory contexts that make it necessary to check for politically exposed persons - for example in the case of tenders, investments or international partnerships.

In many organisations, the PEP check is not yet an integral part of the business partner check. Companies that have already integrated a sanctions list check in SAP, for example, can, however, make a conceptual connection. A PEP check is a useful addition to existing compliance measures - especially when business partners are based abroad or there are indications of risky connections.
The challenge: there is no centralised, public list of all politically exposed persons. Companies must therefore rely on external data providers and ensure that the check is based on up-to-date, data protection-compliant sources. Integration into existing processes makes it possible to avoid a high level of manual effort and reduces the risk of errors.

A modern compliance approach goes beyond the classic sanctions list check and takes into account topics such as money laundering prevention, reputation protection and regulatory obligations to provide evidence. The PEP check is an additional building block for recognising risks at an early stage.
Companies that already use a sanctions list check in SAP can extend the concept to PEP checks. Providers such as Info4C or Dow Jones offer a comprehensive database with regularly updated PEP information that can be integrated into existing workflows. This creates an end-to-end process that is both legally compliant and auditable.

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