Question to the HM Treasury:

To ask Her Majesty's Government, further to the remarks by Viscount Younger of Leckie on 25 November (HL Deb, cols 1002–03), what sanctions may be imposed, and by whom, on financial services organisations that breach Financial Conduct Authority Guidance on the treatment of UK Politically Exposed Persons, their families and known close associates.

Further to the answer of 25 November 2021 by Viscount Younger of Leckie, from April 2018, the Financial Ombudsman has had jurisdiction to consider complaints from Politically Exposed Persons about their treatment by banks, and since 2018, have received fewer than 10 complaints in this area.

Where the Financial Ombudsman find that a bank has not followed regulations, best practice or acted in a fair and reasonable manner, the Financial Ombudsman will tell the bank to put the consumer in the position they would have been in had the bank’s error or wrongdoing not occurred. The Financial Ombudsman also has the power to order banks to pay for financial loss, distress or inconvenience depending on the experience of the consumer.

However, the Financial Ombudsman does not apply sanctions or penalties on banks. The Financial Conduct Authority, as anti-money laundering and counter-terrorist financing supervisor for financial services firms in the UK, has the power to impose civil penalties (fines and censure statements) and prohibitions on management.