Under a risk-based approach, which factor helps determine a PEP risk level most directly?

• A. Position
• B. Foreign vs Domestic
• C. Ability to exert influence
• D. Once a PEP, always a PEP

Answer: (A)

In a risk-based approach, the level of PEP risk is driven by how much influence and access to resources the person can actually exercise. The position they hold directly signals that potential: higher-level offices come with broader authority, decision-making power, and opportunities for improper benefit, which makes the risk level rise and necessitates stronger due diligence. Geographic context like foreign versus domestic adds useful nuance but doesn’t determine the risk amount as directly as the role itself. The ability to exert influence is important, yet it’s a consequence of the position—the actual title or office provides the clearest, most immediate signal of risk. And being labeled a PEP isn’t immutable; status can change, so it isn’t the most direct determinant of current risk.