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SQESalespersons Qualifying Examination✓EAQEEstate Agents Qualifying ExaminationUnder Circular No. 23-01 (CR), which of the following statements about politically exposed persons (PEPs) are correct? (i) The spouse of a serving senior government minister of another country is a non-Hong Kong PEP. (ii) Before establishing a business relationship with a known PEP, the licensee must obtain senior management approval. (iii) For a PEP customer, the licensee must take reasonable measures to establish the source of wealth and the source of funds. (iv) A former PEP must always be treated as high risk, however long ago the public function ended.
Answer: (i), (ii) and (iii) only. (i) True. A spouse, partner, child or parent of an individual entrusted with a prominent public function outside Hong Kong is within the PEP definition. (ii) True. Senior management approval is one of the enhanced measures. (iii) True. The licensee must take reasonable measures to establish source of wealth and source of funds, and apply enhanced monitoring. (iv) False. For a former PEP the licensee assesses the risk; being a former PEP does not in itself mean higher risk, and the assessment is based on risk, not fixed time limits. Rule: Known Hong Kong and non-Hong Kong PEPs require enhanced CDD: senior management approval, source of wealth and funds, and enhanced monitoring. Former PEPs are risk-assessed and ECDD applies if they present a high risk. Source: EAA Practice Circular No. 23-01 (CR), Guidelines on Compliance of AML and CTF Requirements for the Estate Agency Sector (May 2023, effective 1 Jun 2023), paras 4.30 to 4.39; Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615), Schedule 2, sections 1 and 10; as at Oct 2026
Forgetting that PEP status extends to close family members, or treating former PEPs as automatically high risk.
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Start practising →An original question written to the published EAQE syllabus. Figures in the explanation carry their effective dates; check them against the current law before relying on them. Independent exam practice. Not affiliated with or endorsed by the Estate Agents Authority (EAA) or the examination administrator.