01
Who counts
Three groups
PEPs, their family members and known close associates are covered (§ 1 (12) to (14) GwG). The test reaches people who hold or have held a prominent office, including German officeholders.
PEP checks Germany: what applies to your German branch
For PEP checks Germany, your German branch must determine whether a customer or beneficial owner is a politically exposed person (PEP), or a family member or close associate of one, and apply enhanced due diligence if so. The test comes from German law and a European Commission list of public functions, not from your group policy.
Determine first, then approve. § 10 (1) no. 4 of the German Anti-Money Laundering Act (Geldwäschegesetz, GwG) requires you to determine PEP status. If it applies, § 15 (4) GwG requires senior management approval, measures to establish the source of assets and enhanced monitoring. Keep a former PEP in scope for at least 12 months.
- Legal position
- GwG, October 2026
- Applies to
- German branches
- Reading time
- 18 minutes
- Last updated
- 30 October 2026
The essentials in four points
02
The duty
Determine, then approve
You determine PEP status under § 10 (1) no. 4 GwG. If it applies, § 15 (4) GwG requires senior management approval, measures to establish the source of assets and enhanced monitoring.
03
Former PEPs
At least 12 months
After a PEP leaves office, you must take the PEP-specific risk into account for at least 12 months and keep appropriate measures until the risk is assumed to be gone (§ 15 (4) sentence 3 GwG).
04
From July 2027
A new legal basis
Under the EU Anti-Money Laundering Regulation (AMLR), Articles 42 to 46 govern PEPs. In October 2026, the EU Anti-Money Laundering Authority (AMLA) sent the Commission draft technical standards that include PEP screening.
Who does what: EU and German bodies
The definition is German law, the list of functions comes from Brussels, and your supervisor in Germany checks how you apply both. This overview helps if your head office is outside Germany and the German structures are new to you.
European Commission
Keeps the list of the exact functions that count as prominent public functions, built from the Member States’ lists (Article 20a of Directive (EU) 2015/849, and Article 43 AMLR from 2027). § 1 (12) GwG refers to this list.
BMF
The Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) compiles the German list of functions and sends it to the Commission. International organisations based in Germany report their functions to it at the end of each year (§ 1 (12) GwG).
BaFin
BaFin (the German Federal Financial Supervisory Authority, Bundesanstalt für Finanzdienstleistungsaufsicht) supervises, among others, credit institutions, financial services institutions, and payment and e-money institutions. Its interpretation and application guidance under § 51 (8) GwG covers how to clarify PEP status (section 5.4).
AMLA
The EU Anti-Money Laundering Authority (AMLA) drafts the technical standards under the AMLR and is due to issue guidelines on PEPs by 10 July 2027 (Article 42 (2) AMLR).
FIU
The Financial Intelligence Unit (Zentralstelle für Finanztransaktionsuntersuchungen) receives suspicious activity reports (§ 43 GwG). PEP status is a higher-risk factor under § 15 (3) no. 1 GwG. Whether a report is needed is a separate judgement.
PEP checks Germany: who counts as a PEP
§ 1 (12) to (14) GwG define three groups. The table shows who falls into each and adds a fourth row on former PEPs.
| Group | Who is covered | Source |
|---|---|---|
| PEP | Holds or has held a high-ranking prominent public office at international, European or national level, or a politically comparable office below national level. The statute names, among others, heads of state and government, ministers and Members of the European Commission, members of parliament, leaders of political parties, members of high courts, courts of auditors and central bank boards, ambassadors, members of the governing bodies of state-owned enterprises and heads of intergovernmental organisations. | § 1 (12) GwG |
| Family member | A close relative, in particular the spouse or registered partner, a child and the child’s spouse or registered partner, and each parent. | § 1 (13) GwG |
| Close associate | A natural person whom you have reason to assume is joint beneficial owner of a legal entity or arrangement with a PEP, has other close business relations with a PEP, or is sole beneficial owner of a structure that was set up in fact for a PEP’s benefit. | § 1 (14) GwG |
| Former PEP | You must take the PEP-specific risk into account for at least 12 months after the person leaves office, and keep appropriate, risk-based measures in place until the risk is assumed to be gone. | § 15 (4) sentence 3 GwG |
Key point
A former PEP does not drop out after 12 months by default.
§ 15 (4) sentence 3 GwG sets 12 months as the minimum. The measures continue until the risk is assumed to be gone, so record the date the person left office and your reasoning when you stop.
The Commission published the list of exact functions as notice C/2023/724 in the Official Journal on 10 November 2023. It names functions, not people, and has one entry for each Member State. The German entry includes, among others, the Federal President, the Federal Chancellor, members of the federal and state governments and a member of the Executive Board of the Deutsche Bundesbank. For state-owned enterprises it sets size thresholds. A name match is only the start, so read the entry itself before you finalise your rules.
Deadlines and milestones
Chips in red mark steps that are still ahead.
- 10 November 2023
Done. The Commission publishes the list of prominent public functions as notice C/2023/724 in the Official Journal.
- 1 February 2025
Done. BaFin’s revised interpretation and application guidance on the GwG applies. The English version is dated July 2025.
- October 2026
Done. AMLA sends its final draft technical standards on customer due diligence to the Commission. They include rules on screening PEPs, family members and close associates.
- Date not set
Open. The Commission decides whether to adopt the draft standards. AMLA proposes that they apply six months after entry into force. As far as we could verify on 30 October 2026, they have not yet been published in the Official Journal.
- 10 July 2027
Open. The AMLR applies. AMLA’s guidelines on PEPs under Article 42 (2) AMLR are due by the same date.
What German law requires
§ 10 (1) no. 4 GwG makes the determination of PEP status part of the general due diligence duties. You must use appropriate, risk-based procedures to establish whether the contracting party or the beneficial owner is a PEP, a family member or a known close associate. You do this when you establish a business relationship (§ 10 (3) no. 1 GwG) and, for existing relationships, at suitable times on a risk basis, in particular when relevant circumstances change (§ 10 (3a) GwG).
If the answer is yes, § 15 (3) no. 1 and (4) GwG treat the case as higher risk. The minimum measures are these: a member of senior management approves the establishment or continuation of the relationship (no. 1), you take adequate measures to establish the origin of the assets used (no. 2), and you monitor the relationship more closely and continuously (no. 3). If a customer takes up office during the relationship, or you learn of it later, you may continue the relationship only with that approval (§ 15 (4) sentence 2 GwG).
§ 1 (15) GwG defines a member of senior management as an executive or senior employee with sufficient knowledge of the firm’s money laundering and terrorist financing risks and the authority to decide on them. The person does not have to belong to the top management level (Leitungsebene) as well. On our reading, approval from someone without that authority in the German entity does not meet the test.
If you cannot meet the duties, the relationship may not be established or continued, and an existing one must be ended, whatever other statutory or contractual provisions say (§ 10 (9) GwG for the determination, § 15 (9) GwG for the enhanced duties). PEP status as such does not bar a relationship. The three measures are what the statute requires.
From 10 July 2027 the AMLR applies directly. Article 20 (1) (g) requires the determination of PEP status. Article 42 (1) sets the same three measures. On our reading, there are two differences: the approval also covers occasional transactions, and the measures on the source of wealth and the source of funds are named separately. Article 45 keeps the 12-month minimum for former PEPs, and Article 46 extends the measures to family members and known close associates. Article 43 keeps the list of functions. By 10 July 2027, AMLA is due to issue guidelines on the criteria for close associates and on risk levels (Article 42 (2)).
Duties by function in your German branch
Different people carry different parts of the work. The split below follows the functions that usually sit in a German branch or subsidiary.
Management of the German entity
Approves the establishment or continuation of each PEP relationship (§ 15 (4) no. 1 GwG) and owns the decision to refuse or end it if the duties cannot be met.
Compliance function
Writes the PEP procedure, decides who clears a match and keeps the evidence. The Money Laundering Reporting Officer (MLRO) judges whether a suspicious activity report is needed.
Onboarding and know-your-customer (KYC) operations
Collect the declaration and the data, run the screening and obtain the information on the source of assets that § 15 (4) no. 2 GwG requires.
Transaction monitoring
Runs the enhanced monitoring for PEP relationships and re-screens when customer data or the list of functions changes.
Group functions in the UK, the US or elsewhere
May run group-wide screening, but the German entity applies § 1 (12) to (14) GwG and § 15 (4) GwG. Differences between the group definition and the German one need a documented decision.
What stays with your firm
Stays with you
- Senior management approval to establish or continue a PEP relationship (§ 15 (4) no. 1 GwG)
- The decision to refuse or end a relationship if the duties cannot be met (§ 15 (9) with § 10 (9) GwG)
- The suspicious activity report to the FIU (§ 43 (1) GwG)
- Decisions on a sanctions hold
- Approval of the PEP procedure, scenarios and thresholds
A provider can prepare and run
- PEP and sanctions screening of customers and beneficial owners
- Collection and checking of the information on the source of assets
- Re-screening of existing customers after changes
- Enhanced monitoring and alert handling under your scenarios
- Documentation and evidence for your supervisor
You hand over the task, not the control. MaRisk AT 9, the outsourcing module of the Minimum Requirements for Risk Management (MaRisk), expects an institution to remain able to steer and monitor what it outsources. From 10 July 2027, Article 18 (3) (c) and (d) AMLR also bars outsourcing the decision on a customer’s risk profile and the decision to enter into a business relationship.
Typical weak points
These six points recur where PEP screening is set up for a group and then applied in a branch. They do not replace a review of your own set-up.
Only the customer is screened
Beneficial owners are not checked. The determination covers the contracting party and the beneficial owner.
§ 10 (1) no. 4 GwG
Relatives and associates are missed
The screening finds named officeholders but not their family members or known close associates, although the statute treats them in the same way.
§ 1 (13) and (14) GwG
Screening happens once, at onboarding
A customer can take up office later, or you can learn of it later. Continuation then needs senior management approval.
§ 15 (4) sentence 2 GwG
PEP treatment ends after 12 months
The 12 months are a minimum. The measures continue until the risk is assumed to be gone, and the reason for ending them needs a record.
§ 15 (4) sentence 3 GwG
The group definition replaces the German one
The group policy may be narrower or cover other offices. The German entity applies the statutory definition and the Commission’s list of functions.
§ 1 (12) GwG
Approval comes from the wrong person
The approver has no authority in the German entity. A member of senior management needs sufficient knowledge of the risks and the authority to decide.
§ 1 (15) GwG
Quick check: where does your branch stand?
Select a status for each of the six questions. Nothing is stored or sent. The check is a self-assessment and does not replace legal advice.
No-regret measures
These six steps work whichever way the Commission and AMLA move next. They build the evidence that a supervisor asks for.
01
Write one PEP procedure
Define the sources (customer declaration, database, public information), who clears a match and what you record. Compare it with section 5.4.2 of BaFin’s guidance.
02
Cover beneficial owners and associates
Screen beneficial owners as well as customers, and add family members and known close associates to your rules.
03
Name the approvers
Name the senior managers with the knowledge and authority that § 1 (15) GwG requires, the evidence they see and the time limits for new and continued relationships.
04
Set re-screening triggers
Re-screen on a risk-based schedule and on events, and record each run.
05
Document the exit
Record the date a person left office, your risk assessment after 12 months and the reason you end PEP treatment.
06
Prepare for the AMLR
Map your procedure against Articles 42 to 46 AMLR and AMLA’s draft standards. Adjust it once the Commission has adopted them.
Conclusion: determine, approve, document
Three key messages remain.
Use the German definition
§ 1 (12) to (14) GwG and the Commission’s list of functions decide who counts, not your group policy.
Determine, then approve
A PEP finding triggers senior management approval, measures on the source of assets and enhanced monitoring.
The rulebook will move
From July 2027 the AMLR sets the rules. Keep your procedure ready for Articles 42 to 46.
PEP checks Germany are a duty of evidence. If you determine status for customers and beneficial owners, name the approvers, re-screen on events and record when you end PEP treatment, you can show a supervisor who was a PEP, who approved the relationship and why.
Where this sits in the S+P service model
Compliance as a Service
Outsourced officer functions, including the Money Laundering Reporting Officer (MLRO) and Internal Audit, bundled in the S+P Compliance Package.
1st Line Services
Operational work, such as financial crime and customer operations, carried out under your instructions.
RegTech
Tools such as the S+P Compliance Cockpit that support both.
Officer functions and operational services are delivered separately, in organisation and in staffing.
Frequently asked questions
The answers reflect the position on 30 October 2026 and do not replace legal advice in an individual case.
Who counts as a politically exposed person under German law?+−
§ 1 (12) GwG covers anyone who holds or has held a high-ranking prominent public office at international, European or national level, or a politically comparable office below national level. Family members (§ 1 (13) GwG) and known close associates (§ 1 (14) GwG) are covered as well. The Commission’s list of functions, published as notice C/2023/724, shows which functions count.
Must we refuse a customer who is a PEP?+−
No, PEP status does not bar a relationship by itself. § 15 (4) GwG requires senior management approval, adequate measures to establish the source of assets and enhanced monitoring. If you cannot meet the duties, the relationship may not be established or continued, and an existing one must be ended (§ 15 (9) with § 10 (9) GwG). That decision stays with your firm.
How long does a person stay a PEP?+−
§ 1 (12) GwG covers people who hold or have held office. § 15 (4) sentence 3 GwG sets a floor: you must take the PEP-specific risk into account for at least 12 months after the person leaves office and keep appropriate measures until the risk is assumed to be gone. The 12 months are a minimum, not an automatic end. Article 45 AMLR keeps the 12-month minimum from 10 July 2027.
Does the rule cover German officeholders or only foreign ones?+−
Both, on our reading. § 1 (12) GwG names offices at international, European or national level and does not limit them to one country, and the Commission’s list has one entry for each Member State, including Germany. The German entry names, among others, the Federal President, the Federal Chancellor and members of the federal and state governments.
What changes from 10 July 2027?+−
The AMLR applies directly. Article 20 (1) (g) requires the determination of PEP status, Article 42 (1) sets approval, measures on the source of wealth and the source of funds, and enhanced monitoring, Article 45 keeps the 12-month minimum and Article 46 extends the measures to family members and known close associates. AMLA is due to issue guidelines on PEPs by 10 July 2027. Its draft technical standards on customer due diligence, which include PEP screening, went to the Commission in October 2026. As far as we could verify on 30 October 2026, they have not yet been adopted. Article 18 (3) (c) and (d) AMLR also bars outsourcing the decision on a customer’s risk profile and the decision to enter into a business relationship.
What does S+P Compliance take over, and what stays with us?+−
S+P Compliance prepares and runs the operational work: PEP and sanctions screening, collection of the information on the source of assets, enhanced monitoring and documentation. Stays with you: senior management approval under § 15 (4) no. 1 GwG, the decision to refuse or end a relationship, the suspicious activity report to the FIU under § 43 GwG, decisions on a sanctions hold and the approval of scenarios and thresholds. You hand over the task, not the control.
Sources
Only official EU and German bodies are linked. Directive (EU) 2015/849 is cited in the text and read through its successor provisions in the AMLR.
§ 1 Geldwäschegesetz (German). Definitions of PEP, family member, known close associate and member of senior management (§ 1 (12) to (15)). gesetze-im-internet.de
§ 10 Geldwäschegesetz (German). General due diligence: determination of PEP status (§ 10 (1) no. 4), timing and existing customers (§ 10 (3), (3a)) and inability to comply (§ 10 (9)). gesetze-im-internet.de
§ 15 Geldwäschegesetz (German). Enhanced due diligence for PEPs (§ 15 (3) no. 1 and (4)) and the consequence of failing it (§ 15 (9)). gesetze-im-internet.de
Regulation (EU) 2024/1624 (AMLR). Articles 18, 20, 42 to 46 and 90. Application from 10 July 2027. eur-lex.europa.eu
Commission notice C/2023/724. The list of prominent public functions at national level, at the level of international organisations and at the level of EU institutions, 10 November 2023. eur-lex.europa.eu
AMLA press release, October 2026. Final draft technical standards on customer due diligence, including PEP screening, sent to the Commission. amla.europa.eu
BaFin: Interpretation and Application Guidance on the GwG, July 2025. Section 5.4 covers the clarification of PEP status. PDF in English. bafin.de (PDF) [PDF]
Legal position on 30 October 2026. The AMLA standards are drafts until the Commission has adopted them and they are published in the Official Journal. Check the current text before you rely on it.
Related services and pages
PEP screening touches several workstreams. These pages connect.
S+P KYC Service
KYC and due diligence operations carried out under your procedures, including PEP and sanctions checks. Senior management approval and decisions on reports stay with your firm.
S+P IntegrityMonitoring
Ongoing, risk-based monitoring as an outsourcing solution, including the PEP status of customer relationships. Your firm approves the scenarios and decides on the outcome.
Outsourcing MLRO in Germany
The service view for firms that look for an external Money Laundering Reporting Officer for their German entity. Control, decision authority and final responsibility stay with your firm, and reports to the FIU under § 43 GwG are not handed over.
S+P Compliance Package
Outsourced officer functions for institutions in Germany, bundled in one agreement.
AMLR outsourcing Germany
What Article 18 AMLR changes for outsourcing, including the six tasks that stay with your firm.
High-risk third countries list
The second trigger for enhanced due diligence in § 15 GwG: relationships that involve a listed country.
