--- title: "PEP Screening Requirements for AML | HeadStart Docs" description: "Politically Exposed Persons (PEPs) require enhanced due diligence. Learn who qualifies as a PEP, screening requirements and how to manage PEP relationships." lang: en-AU json-ld: | [ { "@context": "https://schema.org", "@type": "Organization", "name": "HeadStart Docs", "legalName": "HeadStart Docs Pty Ltd", "url": "https://www.headstartdocs.com.au", "logo": { "@type": "ImageObject", "url": "https://www.headstartdocs.com.au/logo-512.png?v=4", "width": 512, "height": 512 }, "description": "AML/CTF compliance digital products and programs for Australian businesses under Tranche 2 regulations. Free program documents and AML Portal. 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We provide digital products for AML/CTF compliance, not legal services." } }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.headstartdocs.com.au/" }, { "@type": "ListItem", "position": 2, "name": "Shop", "item": "https://www.headstartdocs.com.au/shop" }, { "@type": "ListItem", "position": 3, "name": "Tranche 2 Hub", "item": "https://www.headstartdocs.com.au/tranche-2" }, { "@type": "ListItem", "position": 4, "name": "Sanctions Search", "item": "https://www.headstartdocs.com.au/sanctions-search" } ] }, { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [ { "@type": "Question", "name": "Do I still need a solicitor for AML/CTF Tranche 2 compliance?", "acceptedAnswer": { "@type": "Answer", "text": "Yes. HeadStart Docs products are digital publications that give you a substantial head start, but they must be reviewed and tailored by a qualified solicitor to your specific business circumstances before implementation." } }, { "@type": "Question", "name": "How is HeadStart Docs different from the free AUSTRAC Starter Kits?", "acceptedAnswer": { "@type": "Answer", "text": "AUSTRAC Starter Kits are generic starting points that require significant customisation. HeadStart products are sector-specific, pre-populated with industry-relevant risk factors and scenarios, and include 12 months of AML Portal access for ongoing compliance including screening, record keeping and reporting tools." } }, { "@type": "Question", "name": "What if the AML/CTF rules change after I purchase?", "acceptedAnswer": { "@type": "Answer", "text": "Your digital products are yours to keep. If significant regulatory changes occur, updated versions will be available to active portal subscribers. The AML Portal itself is continuously updated to reflect current AUSTRAC requirements and sanctions lists." } }, { "@type": "Question", "name": "What happens after my 12-month AML portal access expires?", "acceptedAnswer": { "@type": "Answer", "text": "Your documentation is yours forever. To continue using the AML Portal (screening tools, compliance calendar, record keeping), you pay $35 per customer CDD. Cancel anytime — no subscription required." } }, { "@type": "Question", "name": "Is HeadStart Docs a law firm?", "acceptedAnswer": { "@type": "Answer", "text": "No. HeadStart Docs is a digital publisher and platform provider. We sell digital compliance products and portal access. We do not provide legal advice. Referrals for legal advice can be made to our related law firm, HeadStart Counsel." } }, { "@type": "Question", "name": "When does AML/CTF Tranche 2 commence in Australia?", "acceptedAnswer": { "@type": "Answer", "text": "Tranche 2 AML/CTF obligations commence on 1 July 2026. All reporting entities in designated sectors including lawyers, accountants, real estate agents, conveyancers, and trust and company service providers must have their AML/CTF programs in place by this date." } } ] }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.headstartdocs.com.au/" }, { "@type": "ListItem", "position": 2, "name": "Free Resources", "item": "https://www.headstartdocs.com.au/tranche-2-resources" }, { "@type": "ListItem", "position": 3, "name": "PEP Screening", "item": "https://www.headstartdocs.com.au/tranche-2-resources/pep-screening-requirements" } ] }, { "@context": "https://schema.org", "@type": "Article", "headline": "PEP Screening: When Politicians Become Clients", "description": "Politically Exposed Persons (PEPs) require enhanced due diligence. Learn who qualifies as a PEP, the screening requirements and how to manage PEP relationships under Tranche 2.", "datePublished": "2025-12-20", "dateModified": "2025-12-20", "url": "https://www.headstartdocs.com.au/tranche-2-resources/pep-screening-requirements", "image": "https://www.headstartdocs.com.au/logo-512.png", "inLanguage": "en-AU", "isPartOf": { "@type": "WebSite", "name": "HeadStart Docs", "url": "https://www.headstartdocs.com.au" }, "about": { "@type": "Thing", "name": "AML/CTF Compliance", "description": "Anti-Money Laundering and Counter-Terrorism Financing compliance for Australian businesses under Tranche 2" }, "author": { "@type": "Organization", "name": "HeadStart Docs" }, "publisher": { "@type": "Organization", "name": "HeadStart Docs", "logo": { "@type": "ImageObject", "url": "https://www.headstartdocs.com.au/logo-512.png" } } } ] --- [Get Started ](/checkout) We use cookies to enhance your experience and analyse traffic. [Privacy Policy](/privacy) Essential OnlyAccept All [Skip to main content](#main-content) [ ![HeadStart Docs](/assets/logo-dark-bg-CUivuKJ8.png)![HeadStart Docs](/assets/logo-light-bg-D5BRMGqf.png) ](/) [Home ](/) Features [Programs ](/programs) Resources Sectors [Log in ](/auth) [Portal](/aml-landing) ![PEP screening requirements](/assets/conveyancing-office-CyBI1OMY.jpg) [Back to Free Resources](/tranche-2-resources) 20 December 2025 • PEP Screening # PEP Screening: When Politicians Become Clients Politically Exposed Persons (PEPs) are high-risk clients who require [enhanced due diligence](/tranche-2-resources/enhanced-due-diligence-triggers). Under Tranche 2, you must screen for PEPs and apply additional measures when you identify one. Here is what you need to know. ## What is a PEP? A Politically Exposed Person is an individual who holds or has held a prominent public position, making them potentially higher risk for bribery, corruption, or misuse of their position. ## Categories of PEPs #### Foreign PEPs (Highest Risk) - Heads of state or government - Senior politicians and party officials - Senior military officials - Senior judicial officials - Senior executives of state-owned enterprises - Senior officials of international organisations #### Domestic PEPs (Australia) - Federal, state and territory parliamentarians - Federal, state and territory judges - Senior military officers - Senior public servants - Executives of state-owned corporations #### Family Members and Associates Close family members (spouse, children, parents and siblings) and close associates of PEPs are also considered higher risk and may require enhanced due diligence. ## PEP screening process 1. **Ask the question:** Include PEP questions in your onboarding forms 2. **Screen against databases:** Use PEP screening tools or databases (free sanctions search available at HeadStart Docs™) 3. **Document the screening:** Record what checks you performed and when 4. **Apply ongoing monitoring:** PEP status can change - repeat screening periodically ## Enhanced due diligence for PEPs When you identify a PEP client, **Section 32** requires enhanced due diligence: - **Senior management approval:** Before establishing or continuing the relationship - **Source of wealth:** Establish and document where their wealth comes from - **Source of funds:** Verify where the transaction funds originated - **Enhanced ongoing monitoring:** More frequent reviews of the relationship ### Foreign PEPs: Automatic EDD Foreign PEPs automatically trigger enhanced due diligence. For domestic PEPs, you apply a risk-based approach - EDD is required if the overall risk is elevated. ## Practical tips - Include PEP declaration in your client onboarding forms - Use our free sanctions and PEP screening tool - Document all PEP screening in your client file - Set reminders for ongoing PEP screening (annually or per engagement) - Obtain senior management sign-off for all PEP clients ### Key Takeaway PEP screening is mandatory for all Tranche 2 reporting entities. Ask the question, screen against databases and apply enhanced due diligence when you identify a PEP. Foreign PEPs are automatically high-risk. Document everything. [Free PEP Screening Tool](/sanctions-search)[Get Free AML/CTF Program Documents](/programs) [ Read our complete Tranche 2 Guide Key dates, affected sectors, obligations and how to prepare ](/tranche-2) **Disclaimer:** This article is general information only. It is not legal, financial or compliance advice. HeadStart Docs™ provides free compliance documents, not legal services. We do not guarantee the accuracy of information provided. Obligations may apply depending on your designated services. Always confirm your specific requirements with a qualified adviser. Need a lawyer to review your AML/CTF program? [HeadStart Counsel](https://headstartcounsel.com.au/get-started) offers fixed-fee tailoring from $1,800+GST. Separate entity and engagement. ### Related Articles [ CDD Foreign Buyers and High-Risk Jurisdictions ](/tranche-2-resources/foreign-buyers-high-risk-jurisdictions)[ CDD Beneficial Owner Identification ](/tranche-2-resources/beneficial-owner-identification)[ CDD Enhanced Due Diligence Triggers ](/tranche-2-resources/enhanced-due-diligence-triggers)[ Reporting How to File Your First SMR ](/tranche-2-resources/how-to-file-smr) ### Free Compliance Tools [Implementation Timeline Key dates and milestones for Tranche 2 compliance ](/timeline)[Readiness Test Assess your compliance readiness in 2 minutes ](/risk-calculator)[Sanctions Screening Search Australian sanctions lists and country risk ](/sanctions-search) ### Ready to get compliant? Sector-specific compliance documents to help you build your AML/CTF program. 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