Who can be called a politically exposed person?
A joint definition of politically exposed persons does not exist in international practice. The most commonly used terminology is the one of the Financial Action Task Force (FATF): politically exposed persons are at high risk of engaging in money laundering and terrorist financing.
- Foreign and national politically exposed persons: persons who hold or have held high government positions. For example, heads of state and government and their deputies, members of government and parliament, heads of state or judicial authorities, senior military officers, senior managers in state-owned companies, political party leaders, ambassadors and diplomats.
- Politically exposed persons in international organisations, such as senior executives or employees with similar leadership responsibilities, e.g. directors, deputy directors and members of the board.
- Family members of politically exposed persons include spouses and blood relatives: parents, grandparents, siblings, and children. Adoptive parents, guardians and adopted children are also taken into account.
- Partners and associates of a politically exposed person are persons who are closely associated with a politically exposed person on a personal or professional level. The list includes co-owners of the business and ultimate owners of the company of a politically exposed person.
The FATF definition of politically exposed persons is used by all members of the organisation. In 2022, it includes 37 states, the European Commission and the Cooperation Council for the Arab States of the Gulf.
Some states establish the definition of a politically exposed person at the legislative level. For example, in the UK, the term is enshrined in section 35(12) of the Money Laundering Regulations 2017.
Which of the PEPs are prohibited from having a second citizenship?
Having a second passport may be prohibited for:
- employees with access to state secrets;
- military officers and contract servicemen;
- employees of law enforcement agencies, for example, the Ministry of Internal Affairs, the Federal Customs Service, the Ministry of Emergency Situations;
- employees of state enterprises.
When employed in the civil service or during official verification, such employees may need a certificate of absence of a second citizenship.
How can a PEP pass a Due Diligence check for second citizenship?
If a PEP is no longer in public service, they may apply for a second citizenship. To get a passport by investment, they will need to pass a Due Diligence check. For that, they need to confirm the absence of a criminal record and the legality of income sources.
In the case of politically exposed persons, there is a nuance. The money for the citizenship investment must come from sources unrelated to the public office held. For example, income received from their own legal business a few years after the end of the civil service.
Consultant, Compliance Anti Money Laundering Officer
The applicant for citizenship must confirm that the money for the investment was received before or after they were in the civil service. The following are accepted as confirmation:
- statements on bank accounts for reporting periods;
- statement of income and expenses;
- certificate of income and paid taxes.
In the past, Jacob had worked as a judge for seven years, which is why he had fell under the category of politically exposed persons. But he was not in the civil service anymore, and earned money for the investment as a legal consultant in a private company.
To obtain a second citizenship, Jacob confirmed the sources of income. Immigrant Invest lawyers also prepared an affidavit explaining the investor’s situation.
Jacob successfully passed Due Diligence and received a passport from the Caribbean country of Saint Lucia.
Where can a former PEP obtain citizenship by investments?
Malta allows individuals to obtain citizenship by naturalisation for exceptional services by direct investment.
The applicant first obtains a residence permit and passes a strict check, the Eligibility Test. If the investor passes the check and gets approval, they can apply for citizenship one or three years after obtaining the residence permit.
The minimum amount of investment in the economy of Malta is €690,000. It includes a contribution to a state fund, rental housing, and a charitable donation. The investor also pays a Due Diligence fee and a fee for issuing ID-cards.
Caribbean countries grant citizenship for investments from $100,000. Investors make non-refundable contributions to state funds, buy real estate and government bonds, and invest in businesses.
State citizenship programs operate in five Caribbean countries: Saint Kitts and Nevis, Grenada, Dominica, Antigua and Barbuda, and Saint Lucia.
Vanuatu is an island state in Oceania that also grants citizenship by investment under the state program. To get the Vanuatu citizenship by investment, an investor makes a non-refundable contribution to the state fund in the amount of $130,000 or more.
Frequently asked questions
Civil servants and senior executives, such as presidents, leaders of political parties, judges, heads of state-owned enterprises, top managers of international companies. The Financial Action Task Force (FATF) also lists family members and business associates of government officials and executives as politically exposed persons.
Yes, if the money for the investment comes from sources unrelated to the public position held. The sources of income are to be documentally proved.
No. All positions which a person has occupied throughout life are taken into account during Due Diligence. All sources of income are also taken into account.