What are relatives and close associates (RCAs)?
Relatives and close associates are the family members and business partners of a politically exposed person. They are not PEPs themselves, and AML rules still extend the same enhanced due diligence to them, because assets and influence are routinely held through them.
FATF requires the measures applied to PEPs to be extended to family members and close associates, and the EU framework defines both categories. Under the EU definition, family members are spouses or equivalent partners, children and their spouses or partners, and parents. Close associates cover joint beneficial owners of a legal entity or arrangement, people with close business relations, and the sole beneficial owner of a structure set up for a PEP's benefit. The practical difficulty is that these links are rarely documented in one place and change over time.
What this workflow covers
SCOPE- Store the relationship as an edge between records, so a match on the associate surfaces the PEP and the reason for the link.
- A construction company whose sole shareholder is the adult child of a serving minister produces no sanctions hit and a serious source-of-wealth question.
- Divorced spouses and exited business partners may still hold assets from the period of association, so assess the link rather than deleting it automatically.
- Every link should carry the source that established it.
- An RCA flag is not a designation and not a sanctions hit.
Compliance glossary
TERMS- Family member
- For PEP purposes, typically a spouse or equivalent partner, children and their spouses or partners, and parents.
- Beneficial ownership register
- A national register recording the natural persons who ultimately own or control companies, used to evidence PEP and RCA links.
Authoritative references
SOURCES- 01FATF Guidance: Politically Exposed Persons (Recommendations 12 and 22)
Financial Action Task Force
- 02Directive (EU) 2015/849 — definitions of family members and persons known to be close associates
EUR-Lex, Official Journal of the European Union
Frequently asked questions
Q&A- Who counts as a close associate?
- Under the EU definition: a person known to hold beneficial ownership of a legal entity or arrangement jointly with a PEP, a person with any other close business relationship with a PEP, and a person who is the sole beneficial owner of a structure set up for the de facto benefit of a PEP.
- Do RCAs get the full PEP treatment?
- In substance yes. FATF requires the PEP measures to be extended to family members and close associates, which means senior approval, source-of-wealth work and enhanced ongoing monitoring, applied in proportion to the assessed risk.
- Where do RCA links come from?
- Company registers, beneficial-ownership registers, official biographies, court filings and reputable reporting. Since no authority publishes a definitive RCA register, a link without a source behind it is an assertion, not evidence.