The PEP status, or politically exposed person, relates to civil servants and senior executives at the national or international level.
Politically exposed persons are subjected to a stricter Due Diligence check than ordinary applicants when acquiring second citizenship. Thus, the risk of rejection stays high even if one has an ideal reputation and a clear criminal record.
Who is Considered a Politically Exposed Person?
Though no single global definition exists, the Financial Action Task Force (FATF) offers the most widely accepted definition. According to the FATF, PEPs are individuals at a heightened risk for money laundering or terrorist financing.
The FATF outlines four main categories of politically exposed persons:
- Foreign and National PEPs: These are people who have served or are currently serving in the government in positions like head of state or government, minister, member of parliament, senior military officer, and political party leader.
- International Organization PEPs: Such individuals are typically in the leadership position of an organisation regardless of their status or tenure, but those occupying positions such as directors or board members of organisations operating in the international arena appropriately fit in this category.
- Family Members: The close relatives of PEPs, including spouses, parents, grandparents, siblings, children, and adoptive family members.
- Associates: Anyone who has a family, business, or other close relationship with a PEP, such as business associates or joint venture partners.
The FATF’s definition is followed by its 37 member jurisdictions, the European Commission, and the Cooperation Council for the Arab States of the Gulf, even though some states set out their definitions within their legislation.
The Importance of Due Diligence for PEPs
Which PEPs Are Not Eligible for Second Citizenship?
Some PEPs in specific governmental roles may be ineligible for second citizenship. These include:
- Individuals with access to state secrets
- Military officers and contract servicemen
- Law enforcement personnel (e.g., Ministry of Internal Affairs)
- Employees of state enterprises
Such individuals often face legal restrictions, preventing them from acquiring dual citizenship or an additional nationality.
How Can PEPs Pass Due Diligence for Citizenship by Investment?
PEPs who have retired from public service may apply for second citizenship, but they must pass an extensive Due Diligence process. This includes:
- Providing proof of a clean criminal record
- Demonstrating the legality of their income through documents like bank statements and tax certificates
- Proving that their income was earned either before or after holding a public office
Clear and verifiable documentation of legitimate income is essential for passing the Due Diligence checks and obtaining a second passport.
Citizenship by Investment Programs for Former PEPs
Several countries offer citizenship-by-investment programs available to former PEPs who meet Due Diligence standards:
- Malta: Citizenship can be obtained through naturalisation for exceptional services via direct investment. Applicants may apply after one or three years of residency, with a minimum investment of €690,000, and must undergo strict checks and an Eligibility Test before citizenship is granted.
- Caribbean Nations: Countries like Saint Kitts and Nevis, Dominica, Antigua and Barbuda, and Saint Lucia offer citizenship by investment starting from $100,000. Applicants can contribute to state funds, invest in real estate, or fund local businesses.
- Vanuatu: In Oceania, Vanuatu offers citizenship by investment in exchange for a non-refundable contribution of $130,000 or more to the state fund.
These programs offer excellent opportunities for former PEPs seeking second citizenship as long as they fulfil the Due Diligence requirements.
