Money Laundering

Lord Sikka Excerpts

Wednesday 24th November 2021 Lords Chamber

Asked by

[Lord Sikka]

To ask Her Majesty’s Government what assessment they have made of (1) the levels of compliance with money laundering regulations by banks in the United Kingdom, and (2) the steps being taken by the Financial Conduct Authority to prevent money laundering.

[The Minister of State, Cabinet Office and the Treasury (Lord Agnew of Oulton) (Con)]

My Lords, the Financial Conduct Authority is the designated anti-money laundering supervisor for banks in the UK. The FCA uses data-led supervision programmes to assess its target firms. It issues guidance so that supervised entities understand the AML risks they are exposed to. The Treasury’s 2019-20 supervision report found that 86% of the 177 financial institutions subject to FCA active supervision were compliant. In instances of non-compliance, the FCA takes robust action to deter future breaches of the regulations.

[Lord Sikka (Lab)]

My Lords, the FCA has secured only one criminal conviction of a bank for money laundering, which was actually volunteered. Numerous leaks, such as the Pandora papers and the Paradise papers, show that UK banks are involved in illicit financial flows, yet the FCA is missing in action. What prevents the Minister commissioning an independent inquiry into the involvement of banks in illicit financial flows?

[Lord Agnew of Oulton (Con)]

My Lords, the noble Lord tells only part of the story. A number of major fines have been imposed on financial institutions in the last few years: Deutsche Bank, £160 million in 2017; Standard Chartered, over £102 million in 2019; Commerce Bank, £37 million in 2020; and Goldman Sachs, £48 million in 2020. We have rigorous oversight and we continue to review it the whole time.