UK ministers have confirmed in the House of Lords that an investigation is under way into claims that UK banks could be unwittingly linked to a corruption scandal in South Africa.
UK Labour former Cabinet minister Lord Hain has raised concerns with the Chancellor that banks including HSBC and Standard Chartered could have acted as "conduits" for laundered money.
Treasury spokesman Lord Bates confirmed at question time that Mr Hammond had taken immediate action in referring it to the "relevant authorities" so that "justice is done and seen to be done".
At the centre of the corruption allegations are South Africa's President Jacob Zuma and a wealthy business family, the Guptas.
Lord Hain, who was brought up in South Africa, thanked the Chancellor for ensuring "the Financial Conduct Authority, the Serious Fraud Office and the National Crime Agency investigate HSBC, Standard Chartered and Baroda Bank - each of which expert South African whistle-blowers told me must have been conduits for the corrupt proceeds of money stolen from their taxpayers and laundered through Dubai and Hong Kong.
"In my letter of 25 September to the Chancellor, I supplied for investigation 27 names and personal identification numbers, including President Zuma, 11 members of his family, 11 members of his close friends the Gupta family and their five associates, together with 14 entities linked to the Guptas and suspected to have been set up for the purposes of transnationally laundering an estimated £400 million of their illicit proceeds
"Will he ensure that those banks, together with European banks, about which I have similarly written to European Commission president Juncker, track down that laundered money, return it to the South African Treasury, and supply evidence to its officials to enable the prosecution of all those connected with such corruption.
Lord Bates said the UK was committed to tackling corruption in the UK and overseas with strict rules on money laundering introduced recently which British banks must follow.
"We are concerned about the allegations in South Africa and the British High Commissioner is monitoring the issue closely," he told the House.
Lord Bates said ministers were grateful to Lord Hain for drawing the issue to the Chancellor's attention and assured peers the UK had some of the toughest anti-money laundering laws in the world.
London was a "target that can be used for these purposes and we are determined to root it out," he said.
The Chancellor had taken immediate action in referring Lord Hain's letter to the relevant authorities.