The reason why it is important to identify if your client is a PEP, or not, is because transacting with a PEP can be viewed as a form of bribery & corruption, as such companies need to identify what level of risk this poses to their business and decide whether or not they wish to onboard the individual. Additionally, AML/CTF legislation requires financial institutions, and other organisations conducting high value transactions, to report any PEPs they do business with, to the appropriate authorities, if they consider them to be high risk.