Chris Seeks Help For The British-American Parliamentary Group to RBS
Christopher Chope Conservative, Christchurch
To ask the Chancellor of the Exchequer, if he will make representations to the Royal Bank of Scotland on its refusal to approve a credit card for the British-American Parliamentary Group on the grounds that the three signatories on the group's bank account are hon. Members who are deemed to be politically exposed persons; and if he will make a statement.
Andrew Griffith The Economic Secretary to the Treasury
The issue of Politically Exposed Persons’ (PEPs) access to essential banking services is one that we are taking extremely seriously. The case the Hon Member raises sounds concerning.
The Government’s position is clear that financial institutions’ must not deny services to PEP customers solely on the basis of their PEP status. The recently passed Financial Services and Markets Act 2023 commits the Financial Conduct Authority (FCA) to conduct a review into financial institutions’ adherence to their guidance on PEPs, and the appropriateness of that guidance, within twelve months of Royal Assent. This review will assess the extent to which lower-risk PEPs are being denied access to services in an inappropriate and disproportionate manner, and the FCA will take action where it identifies serious failures.
The Government has also taken action through the Financial Services and Markets Act to commit the Treasury to amend the Money Laundering Regulations to explicitly distinguish between domestic and non-domestic PEPs in law. This amendment will make clear that, in the absence of other high-risk factors, domestic PEPs must be treated as lower risk than non-domestic PEPs and have a lesser degree of enhanced due diligence applied to them.
Earlier this month, I wrote to the FCA to underline the importance of the FCA’s review and make clear that the Government expects it to be prioritised over the coming months. I am clear that the FCA’s review and the Government’s amendment to the Regulations should lead to a more proportionate and appropriate treatment of PEPs in future.
My Treasury colleague, Baroness Penn, has also written to the FCA to emphasise the Government’s expectation that their review should consider to what extent financial institutions are taking a blanket approach and refusing to offer services to customers solely due to their PEP status.
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