Why are PEPs treated as high risk?

Detailed Explanation

The risk is structural, not personal. It comes from access — to public funds, to government contracts, and to decision-making power that has value to someone willing to pay for it. That access creates opportunity in two directions: a PEP may exploit the position directly, or third parties may seek to exploit it on their behalf. Either way the resulting funds need a financial institution to move through. Being classified as a PEP is not an accusation. It is a statement that the relationship sits in a category where the consequences of an undetected problem are severe enough to justify closer, ongoing attention.