So we are asking a PEP question at account opening:
"Do you have a family relationship with a person who holds a government position with a country other than the United States"

if the new customer/applicant asks us "Why do you need to know that?" any idea what would be a nice safe answer?

How about, "it helps us to know what kinds of activity we might expect to be normal within your account."

Sure beats "because our regulators expect us to."

No problem with, "Yeah, it's silly isn't it? But, we're required to ask. Now, do you deal in virtual currency?"