Money Laundering Regulations: Politically Exposed Persons

Baroness Kramer Excerpts

Tuesday 5th July 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, the Government are engaging with banks on this matter. A round table was held on 4 March this year. At that meeting, banks reaffirmed their commitment to following the 2017 FCA guidance, which supports banks in treating most domestic PEPs as lower-risk. Therefore, we have engaged with the banks on this matter and we are committed to doing that further piece of work, an evidence review, to see whether the automatic checks that need to be applied to domestic PEPs could be removed.

[Baroness Kramer (LD)]

My Lords, of course we have to be tough on money laundering but a whole industry has been spawned that scans for PEPs internationally. Will the noble Baroness take this message on a risk-based approach to her various colleagues in other countries? I am getting quite tired of American relatives living in Germany being unable to open accounts because of their relationship with me, when I have no idea how I am even linked to them unless, frankly, data is being abused.

[Baroness Penn (Con)]

My Lords, the United Kingdom Government are always happy to advocate for a risk-based approach in regulating financial services and will continue to do so. The noble Baroness and other noble Lords will know that the obligations around politically exposed persons derive from international obligations from the Financial Action Task Force, so it is important that we continue to meet those standards and obligations internationally.