House of Lords: Politically Exposed Persons

Baroness Hayter of Kentish Town Excerpts

Thursday 25th November 2021 Lords Chamber

Asked by

[Baroness Hayter of Kentish Town]

To ask Her Majesty’s Government what assessment they have made of the case for designating all Members of the House of Lords as Politically Exposed Persons for the purposes of anti money laundering rules.

[Viscount Younger of Leckie (Con)]

My Lords, under the money laundering regulations, a politically exposed person—a PEP—is defined as an individual who is entrusted with prominent public functions, including Members of Parliament or similar legislative bodies. In July 2017, the Financial Conduct Authority published guidance on PEPs, which stated that UK PEPs should be treated as lower risk unless other risk factors applied. Firms are required to apply enhanced due diligence to all PEPs on a risk-sensitive basis.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, it seems that genuine money launderers can bring in foreign money and buy up property with no disclosure of ownership, but we PEPs get this ridiculous six-page questionnaire, which I have just received, wanting to know about my past employers, my family wealth—I have not got any—my lottery wins, my jewellery, and not just my car but “cars”; I have only got one. Many of your Lordships have approached me to say that they and their families have been similarly inconvenienced. The Minister has just reflected that the FCA guidance says that the exposed person should be treated as low risk, but that is not what is happening. Will the Minister meet me and other affected Peers, along with Treasury and FCA officials, to discuss this, so that banks can spend rather more of their time catching the real crooks instead of wanting to know about my—I am afraid—John Lewis jewellery?

[Viscount Younger of Leckie (Con)]

I have a lot of sympathy with the issues raised by the noble Baroness. The Government are committed to tackling the threat posed in the UK by economic crime, but it is imperative that we minimise the burden placed on legitimate businesses and customers. I hope that I can give some assurance to the noble Baroness that the Treasury and the FCA are working together to consider what more can be done in this space, and, where possible, to engage further with banks and firms on how they could interact with their customers who are PEPs. We would be very happy to have a further call or meeting with the FCA to discuss this further.