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

Politically exposed person (PEP)

According to the Act (2017:630) on Measures against Money Laundering and Terrorist Financing, Qred Bank must be informed if you are a PEP, related to a PEP or a person with business relations to a PEP. A PEP is a person who, through his position and influence, is considered to hold a position that in itself constitutes 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 functions are:

  • Heads of state
  • Minister
  • Members of Parliament
  • Judges of the Supreme Court and the Supreme Administrative Court
  • Ambassadors
  • CEO or board members of state-owned enterprises
  • Leading figure in international organizations
  • Board members of political parties

Related parties of PEP and persons with business relations to PEP

Related party of PEP means:

  • spouse, registered partner, cohabitant
  • children and their spouse, registered partner, cohabitant
  • parents

Person with a business relationship with a PEP means:

  • person who jointly with a PEP owns or otherwise has influence over an undertaking
  • person who is or has been otherwise closely associated with the PEP
  • person who solely owns or exercises influence over a company set up for the benefit of a PEP

When does a person cease to be a PEP?

Once a PEP has ceased to perform 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 as a PEP, a PEP's relative and a person with a business relationship with the PEP.

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Foreign Account Tax Compliance Act (FATCA)

Under the US Foreign Account Tax Compliance Act (FATCA), financial institutions around the world are required to report information to the United States on account assets and investment income belonging to individuals and companies subject to US tax. Many countries, including Sweden, have chosen to enter into a special agreement with the US 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 information on to the US Internal Revenue Service.

Persons and companies covered by FATCA include, among others:

  • Persons residing in the United States
  • US citizens (including people with dual citizenship)
  • Holders of a US permanent residence and work permit (Green Card)
  • Companies registered in the USA

Read more about FATCA here

Common Reporting Standard (CRS)

The Common Reporting Standard (CRS) is an international standard that enables the automatic exchange of information on financial accounts between countries. Developed by the Organization for Economic Co-operation and Development (OECD), over 80 countries have signed up to a multilateral agreement to implement the CRS in national legislation, including Sweden and all other EU countries. Under this agreement, banks must identify the tax residence of their account holders and annually report account information for customers who are taxable in other countries or jurisdictions. The CRS aims to prevent tax evasion and is based on the US tax law FATCA.

Qred Bank's legal obligations

Qred Bank is subject to the law that regulates the obligation of Swedish financial institutions to obtain information from their customers about any tax liability in other countries and annually report this information to the Swedish Tax Agency. All customers with tax liability in a country other than Sweden and the US are subject to CRS.

Reporting to the Swedish Tax Agency

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

Tax liability and residence

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

For customers with tax liability in another country

If you are liable to pay tax in a country other than Sweden, you should indicate this when asked about your tax liability in other countries and provide your Taxpayer Identification Number (TIN) together with the country where you are liable to pay tax.

For non-taxable customers in other countries

If you are not liable to tax in any other country, you should confirm this when asked about tax liability in countries other than Sweden.

Read more about CSR here