PEP stands for "Politically Exposed Person". This term describes individuals who, due to their public functions, pose a higher risk of potential involvement in corruption and money laundering. These typically include heads of state, members of government, supreme court judges, high-ranking military personnel, leading party members, key executives of state-owned enterprises, as well as family members and close associates of the aforementioned groups.

Financial institutions and other entities subject to the Money Laundering Act are required to identify their customers and determine whether they are PEPs. If a customer is identified as a PEP, stricter due diligence obligations and monitoring measures are required to manage the increased risk.