Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the implications for his policies of allegations that leaked records from the Industrial and Commercial Bank of China demonstrate it has worked with sanctioned individuals and autocratic regimes.

The Government keeps all potential threats to the UK’s national and economic security under close review and will not hesitate to act where concerns are identified. The Government does not comment on specific cases. More broadly, our approach is evidence-based and risk-based, and we use a range of regulatory and economic security measures to protect the UK’s interests. This includes powers available under the National Security Act and other relevant legislation to address threats where they arise.

All UK persons, including UK based subsidiaries of foreign state-owned banks, are required to comply with relevant UK sanctions, anti-money laundering and counter terrorist financing laws. The Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, assesses every instance of reported non-compliance with UK financial sanctions and takes action in all cases where it concludes that a breach has occurred. OFSI works closely with the Financial Conduct Authority (FCA) in respect of the enforcement of UK financial sanctions where cases concern FCA-regulated firms.

Under the Money Laundering Regulations (MLRs), banks and other regulated firms must have appropriate policies, controls and procedures to mitigate money laundering, terrorist financing and proliferation financing risks. This includes customer due diligence, sometimes referred to as “Know Your Customer” requirements, to verify customers’ identities and understand the purpose of transactions. The FCA is responsible for supervising banks’ compliance with these regulations and is empowered to take enforcement action where necessary.