Money Laundering: UK Parliamentarians

Debate between Lord Deighton and Lord Clement-Jones

Tuesday 14th October 2014 Lords Chamber

[Lord Clement-Jones]

To ask Her Majesty’s Government whether they will make representations about the inclusion of United Kingdom parliamentarians under the definition of “Politically Exposed Persons” in the European Commission’s proposed fourth Money Laundering Directive.

[The Commercial Secretary to the Treasury (Lord Deighton) (Con)]

My Lords, while UK parliamentarians are not currently considered to be “politically exposed persons”—or PEPs—domestically, revised global standards to which the UK is fully committed will require that they are treated as such. These global standards require enhanced due diligence and ongoing monitoring only when the business relationship is assessed as high risk. The UK will make representations when negotiating the fourth money laundering directive to ensure that it reflects these standards.

[Lord Clement-Jones (LD)]

My Lords, I am afraid that my noble friend’s response is only partly reassuring. Even before the fourth directive has come in, many Members of this House and their relatives are being treated as PEPs. I myself and my son were unable to access an ATM and my brother was unable to exercise a joint power of attorney. What steps is the Treasury taking to show Members of Parliament in both Houses that in future they will not be treated in exactly the same way as a deposed dictator or a political pariah?

[Lord Deighton]

My Lords, the key here is in the approach of the banks in doing their due diligence appropriately. The main feature of these arrangements is that domestic PEPs should be assessed in terms of their level of risk, and in the main UK parliamentarians should be assessed as low risk and, frankly, treated in precisely the same way as any other customer. The problem is when banks do not apply the right kind of risk-based assessment and instead revert to inappropriate box-ticking approaches.