What does it mean to be a politically exposed person (PEP)?

Person in a politically exposed position (PEP)

According to the Act (2017:630) on Anti-Money Laundering and Terrorist Financing Measures, Qred Bank must be made aware of whether you are a PEP, related to a PEP or a person with business relations to PEP. A PEP is a person who, by virtue of his position and influence, is considered to hold a position that in itself poses a risk of being exploited for a particular type of influence.

A PEP is a person who holds or has held an important public function in a state or international organization. Examples of such features include:

  • Heads of state
  • Council of State
  • Members of Parliament
  • Judges of the Supreme Court and the Supreme Administrative Court
  • Ambassadors
  • CEOs or directors of state-owned enterprises
  • Leading figure in international organizations
  • Members of the board of political parties

Relatives of PEP and persons with business relations to PEP

Related to PEP refers to:

  • spouse, registered partner, cohabiting
  • children and their spouse, registered partner, cohabitation
  • parents

A person with a business relationship with a PEP means:

  • a person who jointly with a PEP owns or otherwise has influence over an enterprise
  • a person who otherwise has or has had a close relationship with PEP;
  • a person who alone owns or exercises influence over a company formed for the benefit of a PEP

When does a person cease to be a PEP?

Once a PEP has ceased to exercise its functions, Qred Bank will continue to treat the customer as a PEP for at least 18 months thereafter. You are obliged to immediately notify Qred Bank of any changes in your status regarding PEP, related to PEP and person with business relationship to PEP.

Foreign Account Tax Compliance Act (FATCA)

Under the U.S. Foreign Account Tax Compliance Act (FATCA), financial institutions worldwide are required to report information to the United States about the account assets and capital income of individuals and companies with U.S. tax liability. Many countries, including Sweden, have chosen to enter into a special agreement with the United States on FATCA. This means that Swedish financial institutions, including Qred Bank, must report this information to the Swedish Tax Agency, which in turn passes the data on to the US Internal Revenue Service.

Individuals and companies covered by FATCA include, among others:

  • Residents of the United States
  • U.S. citizens (including people with dual citizenship)
  • Holders of a U.S. Permanent Residence and Work Permit (so-called Green Card)
  • Companies incorporated in the United States

Read more about FATCA here

Common Reporting Standard (CRS)

The Common Reporting Standard (CRS) is an international standard that enables the automatic exchange of financial account information between countries. CRS has been developed by the Organisation for Economic Co-operation and Development (OECD), and over 80 countries have signed a multilateral agreement to implement CRS in national law, including Sweden and all other EU countries. Under this agreement, banks must identify the tax domicile of their account holders and report annually the account details of customers who are taxable in other countries or jurisdictions. The purpose of CRS is to discourage tax evasion and the standard is based on the U.S. tax law FATCA.

Qred Bank's legal obligations

Qred Bank is subject to the law governing the obligation of Swedish financial institutions to obtain information from their customers about possible tax liability in other countries and report this data annually to the Swedish Tax Agency. All customers with tax liability in a country other than Sweden and the United States are covered by CRS.

Reporting to the Swedish Tax Agency

Qred Bank reports data on relevant account assets and capital income annually to the Swedish Tax Agency, which in turn reports these data to the corresponding authority in the other country.

Tax liability and residence

You are responsible for notifying Qred Bank if you are liable for tax in a country other than Sweden. This also includes informing Qred Bank of any changes in your tax liability or tax residency.

For customers with tax liability in another country

If you are taxable in a country other than Sweden, you should indicate this when asked about tax liability in other countries and enter your tax identification number (TIN) together with the country where you are liable for tax.

For customers without tax in other countries

If you are not liable for tax in another country, please confirm this when asked about tax liability in countries other than Sweden.

Read more about CSR here