Money Laundering Regulations: Politically Exposed Persons

Lord Harris of Haringey Excerpts

Tuesday 5th July 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, anti-money regulations play an important role in tackling economic crime, which I know is a subject that this House cares strongly about. We recently concluded a review of our anti-money laundering regulations and their effectiveness. We are committed to a piece of work on politically exposed persons, but the main conclusions from that review were about how we regulate professional services, and we will consult on our proposals for reform there to consider how we can improve our anti-money laundering regulations. I think everyone would agree that they are essential to protect against financial crime.

[Lord Harris of Haringey (Lab)]

My Lords, this has been going on for at least a decade, to my knowledge, so the Government are moving with extraordinary sloth. First, can we have a guarantee that this review will be published so that everyone can see it? Secondly, will the Minister examine the implications for voluntary organisations led by or are involved with politically exposed persons?

I have a personal experience: Metro Bank decided that an organisation that I chair and which has a board consisting of three politically exposed persons and one other—who is, incidentally, an emeritus professor of engineering and a former Chief Scientific Adviser to the Government—was somehow beyond its risk appetite. The rule is being applied in a blanket way without the sort of assessment that the Minister and her many predecessors have stood at that Dispatch Box to assure us will be the case.

[Baroness Penn (Con)]

My Lords, my understanding is that the original measures on PEPs were put into UK law in 2017, so the timescale is slightly different from that set out by the noble Lord, but I absolutely take his point on action that needs to be taken. That is why we have continued to follow up with banks about taking proportionate action under the current regulations and are looking at whether they can be amended, but we need a strong evidence base to take that action.