PEP checks are used to identify individuals who are or have been politically exposed, meaning that they hold or have held public office and may be at a higher risk for involvement in corruption or other illegal activities. Sanction checks, on the other hand, are used to identify individuals or entities that are on sanctions lists, which are issued by governments or international organizations as a means of combating terrorism, money laundering, or other illegal activities.

During the customer onboarding process, financial institutions will typically conduct PEP and Sanction checks on new customers to ensure that they are not associated with any illegal activities. This is done by checking the customer's name against various databases and lists of known PEPs and sanctioned individuals or entities. If the customer's name matches any entries on these lists, the financial institution may need to conduct additional due diligence before proceeding with the onboarding process.

Overall, PEP and Sanction checks are an important part of the customer onboarding process in the financial industry, as they help to ensure that financial institutions are not doing business with individuals or entities that are involved in illegal activities.