Lord Livermore (Lab)

I fully recognise and understand many of the things the noble Lord says. I understand that being a politically exposed person means enhanced scrutiny and administrative burdens and has impacted many noble Lords. Banks and other regulated firms must apply additional checks to customers who meet the definition of a politically exposed person, as well as to their relatives and close associates. That is to mitigate the increased risk that they are targeted for bribery and corruption attempts. While those checks are important, it is essential that they are proportionate to the risks posed; checks should account for the nature of the proposed business relationship and the potential for the product to be misused. The noble Lord will know that changes to the money laundering regulations now require banks to treat domestic politically exposed persons as inherently lower risk and, in the absence of any other high-risk factors, banks should apply due diligence measures proportionately. In July 2024, the FCA also published its review of the treatment of politically exposed persons, which identified a range of required improvements by the firms that it assessed.