Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what plans his Department has to strengthen financial regulations in response to the case of Isabel dos Santos.

HM Treasury is responsible for the Money Laundering Regulations 2017 (‘the Regulations’). The Regulations set out the high-level requirements on regulated firms to combat money laundering and ensure that key professionals identify their customers and understand the purpose behind transactions, including the source of funds. The Regulations are designed to combat illicit finance, while minimising the burden on legitimate customers.

The Regulations include requirements for firms in scope to have in place appropriate risk-management systems and procedures to determine whether a customer is a Politically Exposed Person (PEP), and conduct an appropriate range of Enhanced Due Diligence (EDD) measures. PEPs can pose a high money laundering risk because they may be able to abuse their position for private gain.

The Financial Conduct Authority (FCA) is the anti-money laundering supervisor for financial services firms in the UK; it regularly takes action against firms who fail to meet their obligations under the Regulations. In 2015, the FCA fined Barclays Bank £72,069,400 for failing to conduct enhanced due diligence on a £1.88 billion transaction involving PEPs.

The UK has been recognised as world leading in its response to economic crime. In 2018, the Financial Action Task Force found that the UK had one of the strongest systems for combatting money laundering and terrorist financing of over 60 countries it has assessed to date.