Domestic Politically Exposed Persons: Money Laundering Rules

Debate between Charles Walker and Jake Berry

Wednesday 20th January 2016 Commons Chamber

[Mr Walker]

My hon. Friend mentions NatWest. I think that all banks are conducting their business in this way.

[Jake Berry (Rossendale and Darwen) (Con)]

And Coutts.

[Mr Walker]

My hon. Friend has given another example.

If the banks’ tick-box approach is replicated throughout their wider compliance operations, it suggests that they do not have a clue what they are doing, or where the risk actually lies within their customer base. Of course, a less charitable interpretation of their conduct would be the suggestion that they have a very good idea of where the money laundering threat lies in their business, but the cost in lost fees of addressing that threat, and the consequential deterring of high-net-worth individuals as clients, is greater than the cost incurred through the occasional regulatory fine. Far better for the balance sheet to make a great deal of noise—noise that both dazzles and impresses the regulator and makes the lives of law-abiding minnows difficult—than to actually engage in the hard and costly yards of nailing the serious bad guys.

The money laundering regulations need to be revisited. Their purpose is to target despots and dictators, not law-abiding citizens. They are being disproportionately applied. Today I am discussing politically exposed persons, but tomorrow I could just as easily be discussing the aggressive application of these requirements in relation to my constituents, their businesses and their families. The Government must act now to end this nonsense across the piece.

Let me leave Members with this thought: if everyone is under suspicion, no one is a suspect.