On 5 November 2015, the Information Commissioner’s Office (ICO) published a decision notice upholding the FCA’s decision to refuse to disclose certain information under the Freedom of Information Act 2000 (FOIA) relating to countries which the FCA deems to present a high money laundering risk.
In July 2014, the FCA published on its website a list of countries which the FCA deemed to present a high money laundering risk, but it withdrew the list after a short period. In May 2015, an individual addressed a complaint to the FCA to disclose its most up-to-date list, but the FCA advised that the list was published in response to an FOIA request and that it had no plans to replace the information on the website. More specifically, the FCA relied upon section 27(1) of FOIA, stating that “withholding the list is a prejudice-based exemption that is subject to a public interest test”. Essentially, section 27(1) of FOIA states that for a prejudice based exemption to be met, the regulatory authority must be able to demonstrate that it holds casual relationships with the countries involved and any disclosure of such information would be likely to prejudice the authority’s relations with these countries. The possibility of prejudice should not just be hypothetical, there must be a real and significant risk of such prejudice. If these conditions are met, then the public interest in maintaining the disclosure outweighs the public interest in disclosure.
The complainant subsequently requested an internal review, but this was rejected by the FCA on the same grounds, upholding its original position. The complainant
addressed his complaint to the ICO about the way his request had been handled. During the course of the ICO’s investigation, the FCA argued that disclosure of the withheld information would or would be likely to prejudice the UK’s relations with some of the countries on the requested list, reduce their willingness to make business with the UK and harm the effectiveness of the UK financial services regulatory regime.
In terms of the public interest test in section 27(1) of FOIA, the FCA recognised that there is a balance that has to be preserved. Even though there is a public interest in favour of transparency and in furthering the public’s understanding of how the UK develops and implements financial services regulatory matters, this public interest does not outweigh the public interest in maintaining the exemption. The FCA commented that “the fact that the information was recent strengthened the public interest argument in favour of maintaining the exemption”. The FCA provided the Commissioner with further arguments on the particular harm such a disclosure could cause.
The ICO responded that the FCA correctly applied section 27(1)(a) to the withheld information and accepted that there is a public interest in transparency, but it upheld that the public interest was better served by not disclosing these high-money laundering risk countries. As the ICO stated in its decision, such a disclosure would present a real and significant risk of prejudice to the UK’s international relations with the countries named on the list.