Table of contents
- Why you must perform PEP checks — and what is at stake
- What must a lawful PEP check cover?
- How to perform a free online PEP check — step by step
- How to record the result of PEP screening correctly
- What to do if the client is a PEP
- PEP check vs sanctions screening: what is the difference?
- When a PEP check is not enough and enhanced due diligence is required
- Frequently asked questions about PEP screening
Why you must perform PEP checks — and what is at stake
The duty to verify a client's PEP status follows from Section 8(8) of Act No. 253/2008 Coll. (the Czech AML Act). During each client identification, an obliged entity must determine and record whether the client, the person acting on behalf of the client and the client's beneficial owner are politically exposed persons (PEPs) or sanctioned persons.
A PEP check is therefore not an optional add-on. It is a statutory duty that applies to all obliged entities, including real estate agents, accountants, tax advisers, lawyers, notaries and other entities listed in Section 2 of the AML Act.
Failure to verify PEP status is an administrative offence under Section 44 of the AML Act, with a fine of up to CZK 10,000,000. During inspections, the Financial Analytical Office checks not only whether screening took place, but also whether it was properly documented.
What must a lawful PEP check cover?
Neither the AML Act nor FAÚ Methodological Guideline No. 7 prescribes a specific tool. They do, however, require a combination of methods and a result that can be evidenced. A written client declaration that they are not a PEP is not sufficient on its own.
Primarily: checking against the exhaustive list of functions
FAÚ Methodological Guideline No. 7, updated as of 17 July 2024, contains a closed list of public functions that establish PEP status in the Czech Republic — from the President of the Republic through regional governors to heads of diplomatic missions. Verification is performed by comparing the client's name with this list.
Additionally: global PEP databases
For foreign clients, obliged entities must also check foreign PEP databases that map public functions in other states and international organisations.
Always: sanctions lists
- the Czech national sanctions list (Ministry of Foreign Affairs, Act No. 1/2023 Coll.)
- the EU sanctions list (CFSP, Act No. 69/2006 Coll.)
- the UN sanctions list
It is also recommended to include adverse media screening, meaning analysis of media and public sources — especially for higher-risk clients.
Note: PEP status is checked not only at the start of a business relationship, but throughout its duration. A change in the client's status, such as taking public office, must be captured.
How to perform a free online PEP check — step by step
AML Basic lets you check a client against PEP databases, sanctions lists and adverse media in one step — without registration, with the first check free.
- Step 1 — go to amlbasic.com/pep-check. The page opens directly in the client screening tool. No registration or payment card is required for the first check.
- Step 2 — enter the client's name. Fill in the first and last name of a natural person or the name of a company. For foreign names, the tool works with transliteration variants and fuzzy matching.
- Step 3 — run the check. Screening takes about 30 seconds and covers global PEP databases, Czech, EU and UN sanctions lists, and adverse media.
- Step 4 — download the PDF report. The result is generated as a PDF report summarising the sources checked and any matches found. The report serves as evidence for a possible FAÚ inspection.
Run your first PEP check for free — result in 30 seconds
AML Basic checks the client against PEP databases, Czech, EU and UN sanctions lists and adverse media. PDF report without registration.
Check client for freeHow to record the result of PEP screening correctly
You must document the result of PEP screening in a way that proves, during an FAÚ inspection, that the check took place, when it took place and what the result was.
Acceptable forms of record
- a PDF report from the tool with the date, client name, sources checked and result
- a screenshot of the search with the date and checked name visible
- an entry in the client's AML file referring to the date and method of verification
You must keep the PEP screening record for 10 years after the end of the business relationship or after a one-off transaction is completed (Section 16(1) of the AML Act).
Important: During an inspection, FAÚ assesses not only whether a record exists, but also whether it is credible. A Google screenshot without a date stamp or a generic statement that “the client declared they are not a PEP” does not satisfy the statutory duty.
What to do if the client is a PEP
Finding that a client is a PEP automatically triggers enhanced client identification and due diligence under Section 9a of the AML Act. It is not enough to record that the client is a PEP — you must take concrete measures.
- Verify the source of funds used in the transaction (Section 9(2)(e) of the AML Act).
- Take proportionate measures to establish the source of the PEP's overall wealth (Section 9(2)(f) of the AML Act).
- Obtain approval from the designated person (MLRO) or a member of the statutory body before establishing or continuing the business relationship (Section 9a(3)(d) of the AML Act).
- Set ongoing monitoring of the business relationship at an increased intensity.
Section 15(2) of the AML Act expressly states that a transaction with a PEP cannot be carried out if you do not know the origin of the assets or funds used in that transaction — even within an existing business relationship.
PEP check vs sanctions screening: what is the difference?
These two checks are often confused in practice, but they are separate obligations with separate legal bases.
| PEP screening | Sanctions screening | |
|---|---|---|
| What it verifies | Whether the client holds or has held a public function | Whether the client is listed on a sanctions list |
| Legal basis | Sections 4(5) and 8(8) of the AML Act | Act No. 69/2006 Coll. on the implementation of international sanctions |
| Effect of a positive match | Enhanced due diligence (Section 9a of the AML Act) | Immediate prohibition of the transaction and duty to postpone (Section 20 of the AML Act) |
| How it is checked | PEP databases plus own investigation | Czech, EU and UN sanctions lists |
| Duration | PEP status continues after leaving office based on individual risk assessment | Sanctions apply until the person is removed from the list |
The practical conclusion is simple: checking only sanctions lists is not enough. Checking only PEP status without sanctions screening is not enough either. The law requires both — and AML Basic performs both checks in one report.
When a PEP check is not enough and enhanced due diligence is required
A PEP check is the entry point, but for higher-risk clients or certain situations the law requires significantly more.
When a PEP check triggers EDD
- the client is a direct PEP under the exhaustive list in FAÚ Methodological Guideline No. 7
- the client is a derived PEP under Section 4(5)(b) of the AML Act — a close person, business partner or beneficial owner of the same legal entity as a PEP
- the beneficial owner of the client entity is a PEP (Section 54(8) of the AML Act)
When the screening result alone is still not enough
- a partial match — the name is similar but identity is not clearly confirmed; the decision must be documented and, if doubts remain, EDD should be applied
- the client is from a jurisdiction with high corruption risk; even without a direct PEP hit, increased caution and enhanced screening are appropriate
In such cases, move from standalone screening to a full AML system. AML PROOF connects the PEP screening result with an EDD workflow and supports approval by the designated person (MLRO) in line with Section 9a(3)(d) of the AML Act.
From PEP check to full AML client management — without switching systems
AML Basic covers screening. AML PROOF adds client identification, risk assessment, EDD workflow, 10-year archiving and training — connected in one system.
Learn more about AML PROOFFrequently asked questions about PEP screening
Do I need to perform a PEP check for every client or only selected clients?
For every client during each identification. The law does not create an exception for clients that appear low-risk. The duty applies to natural persons, persons acting on behalf of a client and beneficial owners of legal entities. The frequency of repeat checks depends on the client's risk profile and the length of the business relationship.
Is it enough if the client signs a declaration that they are not a PEP?
No. On its own, it is not enough. FAÚ Methodological Guideline No. 7 states that relying exclusively on the client's declaration is insufficient. The declaration may be a starting point, but it must be combined with your own verification against the list of functions or with a specialised tool.
How long does PEP status last after leaving office?
The AML Act does not set a fixed period. PEP status continues after leaving office, and its duration depends on the risk assessment of the specific client. For high-risk PEPs, increased caution may be appropriate for many years after leaving office.
If the client is a low-risk PEP, do I need the same measures as for a high-risk PEP?
No. The law allows the depth of measures to reflect the PEP's risk profile. For a low-risk PEP, a declaration may be sufficient to establish the source of wealth; for a high-risk PEP, additional sources may be needed. The duty to establish the source of wealth cannot be omitted for any PEP.
Do I need to keep the PDF report from PEP screening?
Yes. Section 16(1) of the AML Act requires records of client identification and due diligence to be retained for 10 years after the end of the business relationship. A PDF report is an acceptable form of evidence that screening was performed.
What if the tool returns a partial match and the client may be a PEP?
A partial match means the client's name overlaps with a person in a PEP database, but identity is not clearly confirmed. You must compare additional identifying data, such as date of birth, nationality or function, and document the decision. If doubts cannot be resolved, proceed as with a positive match.