Quick Guide to International Organisation PEPs
- Also known as: International organisation PEP, IO PEP
- Meaning: An individual entrusted with a prominent public function, position or office of a public international organisation, such as a head, deputy head or board member of a United Nations body.
- Why it matters: International organisation PEPs can be exposed to bribery and corruption risk because of influence over procurement, budgets, programmes, and grants. PEP status is a risk indicator, not an accusation.
- What you must do: Identify PEPs through screening and apply enhanced measures where risk and rules require it.
- Best practice anchor: FATF guidance explains additional measures for foreign, domestic, and international organisation PEPs under Recommendations 12 and 22.
What is an international organisation PEP
AUSTRAC reforms guidance states that an international organisation PEP is an individual entrusted with a prominent public function, position or office of a public international organisation. This includes a head, deputy head, or board member in a public international organisation, for example a head, deputy head or board member of a United Nations body.
The same AUSTRAC guidance also extends the concept to certain family members and to individuals known, based on public or readily available information, to have particular close relationships such as joint beneficial ownership of a company or legal arrangement with an international organisation PEP, or holding sole beneficial ownership on behalf of an international organisation PEP.
In plain English, this means you are not only looking for the person with the senior role. You are also looking for risk that can sit in close networks and structures.
Why international organisation PEPs matter for Tranche 2 entities
AUSTRAC’s core PEP guidance explains why PEPs are treated as higher risk. They often have power over government spending and budgets, procurement processes, development approvals and grants. Because they hold positions of power and influence, they can be targeted for corruption and bribery attempts, and ultimately for money laundering or terrorism financing activities.
FATF guidance is aligned. FATF explains that many PEP roles can be abused for laundering illicit funds or predicate offences such as corruption or bribery, and therefore additional preventive measures are required for business relationships with PEPs. FATF stresses that these requirements are preventive and should not be interpreted as meaning all PEPs are involved in criminal activity.
For Tranche 2 sectors, the practical risk is reputational and regulatory. Professional services can be used to create legitimacy for funds or assets linked to misuse of influence. You need a consistent, well documented approach to identifying the risk and managing it proportionately.
Where IO PEP risk typically appears in Tranche 2 work
Legal services and trust account activity
Funds may move through trust accounts for transactions involving senior international organisation officials or close associates. Your file must show why the transaction is legitimate and how risks were mitigated.
Real estate transactions
Property can be used to store value. Where the buyer or beneficial owner is an IO PEP, the focus quickly turns to source of wealth, source of funds, and whether the purchase is plausible.
Accounting and structuring engagements
Complex entity structures can be used to hide beneficial ownership or distance a PEP from an asset. Your engagement acceptance and ongoing monitoring should reflect this risk.
High value goods and services
High value purchases can also be used to convert illicit funds into assets, particularly where third party payers or offshore structures are involved.
Real-World Example of IO PEP:
Example 1: Senior leadership role in a UN body
A screening result identifies a client as a deputy head of a UN body. AUSTRAC’s reforms definition treats this as an international organisation PEP.
Example 2: Family member of an IO PEP
A customer is the spouse of an IO PEP. AUSTRAC’s PEP framework treats family members as within scope for PEP risk treatment.
Example 3: Joint beneficial ownership
Publicly available information shows the customer jointly owns a company with an IO PEP. AUSTRAC’s reforms guidance explicitly captures this type of close association.
Best practices for managing international organisation PEP risk
- Screen properly, not casually. Screening should include customers, beneficial owners, and controllers, not just the person signing the engagement letter.
- Resolve matches through a documented workflow. A PEP match creates an alert. Your obligation is to validate the match, document the outcome, and apply proportionate controls.
- Strengthen source of wealth and source of funds work. For higher risk PEP cases, the narrative and evidence need to show how wealth was created and how the particular transaction is funded.
- Use senior sign off for higher risk cases. Ensure decisions are owned at the right level and are supported by evidence and rationale.
- Connect PEP outcomes to suspicious matter thinking. Where explanations are inconsistent, evidence is missing, or behaviour is unusual, your program should support escalation.
Common challenges
- False positives that are not resolved and remain open on file.
- Staff reluctance to ask direct questions about wealth and funding.
- Overly rigid policies that reject all PEPs and create unnecessary commercial harm.
- Overly permissive approaches that accept PEP risk without real enhanced measures.
How Tranche 2 Consultants can help
Tranche 2 Consultants can implement an IO PEP workflow that is practical for professional services, including screening design, match resolution playbooks, source of wealth templates, escalation routes, and partner level decision packs that stand up to AUSTRAC scrutiny.
Final Thoughts on International Organisation PEPs
International organisation PEP is a specific PEP category that matters because influence and access can be misused. A sensible approach is calm and structured: screen, resolve, apply proportionate enhanced measures, and document decisions clearly. That is exactly what regulators expect and what good governance looks like in practice.
“Bookmakers sit at a natural convergence point for cash, speed and anonymity. AUSTRAC’s focus reflects the reality that wagering platforms can be misused as value transfer mechanisms if risk controls are not actively applied.”
