Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what guidance he has given to the Secretary of State for Communities and Local Government on the potential implications of the application of the EU 4th Money Laundering Directive, 2015/849, to senior office-holders in local government; and if he will make a statement.

Under the Fourth Anti-Money Laundering Directive, which will be transposed into national law by June 2017, a politically exposed person is one who has been entrusted with a prominent public function domestically or by a foreign country. The Government's view is that the Directive permits a risk-based approach to the identification of whether an individual is a politically exposed person and, when identified, the Directive enables the application of different degrees of enhanced measures to reflect the risks posed. We will be setting out this view in our consultation which will be published shortly.

This change should not prevent any individual in this category from gaining or maintaining access to financial services. I regularly raise these issues with financial institutions and the regulator and we encourage financial institutions to take a proportionate risk-based approach when applying these measures.