South Africa: Money Laundering

Lord Hain Excerpts

Thursday 19th October 2017 Lords Chamber

Asked by

[Lord Hain]

To ask Her Majesty’s Government what action they are taking to prevent money laundering through British banks by families and businesspeople linked to the government of South Africa.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, the Government are committed to tackling corruption in the UK and overseas and preventing the proceeds of corruption from entering the UK’s economy. The recently introduced money laundering regulations set out strict rules that British banks must follow when doing business with those with links to prominent public functions that may expose them to risks of corruption. We are concerned about the allegations in South Africa, and the British high commission is monitoring the issue closely.

[Lord Hain (Lab)]

May I thank the Chancellor for ensuring that the Financial Conduct Authority, the Serious Fraud Office and the National Crime Agency investigate HSBC, Standard Chartered Bank and Baroda Bank, each of which expert South African whistleblowers have told me must have been conduits for the corrupt proceeds of money stolen from their taxpayers and laundered through Dubai and Hong Kong? In my letter of 25 September to the Chancellor, I supplied for investigation 27 names and personal identification numbers, including President Jacob Zuma, 11 members of his family, 11 members of his close friends, the Gupta family, and their five associates, together with 14 entities linked to the Guptas and suspected to have been set up for the purposes of transnationally laundering an estimated £400 million, or 7 billion rand, of their illicit proceeds. Will he ensure that those banks, together with the European banks—about which I have similarly written to Commission President Juncker—track down that laundered money, return it to the South African Treasury and supply evidence to its officials to enable the prosecution of all those connected with such corruption?

[Lord Bates]

My Lords, we are grateful to the noble Lord for the persistence that he has shown on this issue and in drawing it to the Chancellor’s attention and to international attention. The UK has some of the toughest anti-money laundering laws in the world. We have been at the forefront of introducing them—whether it is the Criminal Finances Act this year or the fourth anti-money laundering directive. We realise that London, as the largest financial centre, is a target which can be used for this purpose, but we are determined to root it out. That is why, when we are provided with information—as when the noble Lord, correctly, wrote to the Chancellor setting out that detail—immediate action is taken to refer it to the relevant authorities to ensure that they can pursue the matter and that justice is done, and is seen to be done.