Criminal Finances Bill — House of Lords, 2017-04-25
Topic: Mixed Topics
Susan Williams (Conservative, Centre-right): My Lords, I thank all noble Lords who have spoken so passionately on Amendments 8 and 14. I particularly thank the noble Baroness, Lady Stern, for all the work that she has done in promoting her Amendment 14. I also thank all noble Lords who attended the meeting with the overseas territory this morning. I hope they found it was useful and that they can see that progress is already being made I begin with Amendment 24 in the name of my noble friends Lord Faulks and Lord Hodgson of Astley Abbotts, which would provide for the creation of a public register of beneficial ownership of foreign companies that own property in the UK. I am pleased to have the opportunity to return to this issue. The clear abuse of the London property market and high-value properties across the country—I was particularly interested to hear about the properties in Manchester—to launder money, including the proceeds of corruption, has to be stopped. We must not allow this city to be a haven for kleptocrats hiding their ill-gotten gains. That is why the Government share the ambition of creating such a register. As my noble friend Lord Faulks told us, on 5 April, the Department for Business, Energy and Industrial Strategy published a call for evidence on our proposed register and how it will work. In the call for evidence, the Government sought views on the design of the register and how it will interact with the UK property market to ensure that it is effective. This policy enshrines the UK’s position as world leader in corporate transparency policy. However, as this register is novel and ambitious, its development should not be rushed. The UK will be considered world leading in this agenda only if the register works. The Government have therefore taken time to develop effective proposals and ensure that they deliver full transparency without creating undue burdens on business or adversely impact commercial property transactions. Publishing the call for evidence earlier this month demonstrated the Government’s ongoing commitment to this agenda. Subject to the outcome of the general election, it remains our intention to introduce legislation to create the register as soon as parliamentary time allows. I hope this provides my noble friends with the reassurances that they seek Moving back to the overseas territories and Crown dependencies, I welcome noble Lords’ recognition of the value of the Government’s amendments. They will help us to ensure that the jurisdictions successfully implement their commitments and that the UK law enforcement agencies can pursue investigations into money laundering and corruption as a result. As I have previously noted, a key feature of the Government’s approach is that it creates a level playing field between all the overseas territories with financial centres and the Crown dependencies. By taking a different approach to the Crown dependencies and overseas territories, the noble Baroness’s Amendment 14 would risk disrupting this level playing field, creating weaknesses in certain jurisdictions that could be exploited and damaging the spirit of co-operation we have been able to create between them. The Government’s amendment has the merit of treating all relevant overseas territories and the Crown dependencies on an equal basis, ensuring that they are held to the same standard and are subject to a level playing field The noble Lord, Lord Rosser, asked whether the information provided to UK law enforcement agencies can then be shared with operational partners in other countries, including those where grand corruption is rife. The exchange of notes are bilateral agreements with the overseas territories and Crown dependencies to enable the exchange of accurate and timely beneficial ownership information. On an operational case-by-case basis, and subject to each agency’s legal position, the UK agencies may share this information with operational partners in other countries. If a subsequent UK law enforcement investigation recovers property that relates to criminal activity or corruption in another country, we may also seek to return it to such a country under the terms of existing agreements or memoranda of understanding Noble Lords should also note that, if we were to impose legislation in a field of activity that is devolved to the overseas territories, we would need to ask ourselves to what degree we could ensure that such legislation would be implemented successfully in practice. Although Westminster has the legal power to legislate, enforcing practical implementation of legislation in this case would be fraught with difficulty. We could, in fact, significantly undermine the progress that we are making in return for little or no real benefit. The noble Lord, Lord Rosser, asked what the review will cover. It will take into account the impact on law enforcement outcomes such as the number of cases concluded, the quality of evidence received and the overall impact on combating economic crime. He also asked whether there would be a debate in both Houses. He will understand that I cannot commit the next Government to scheduling a debate on the report but this will, of course, be a matter for business managers in due course. However, I am sure that interest in this issue will remain in both Houses and there would be considerable support for such a debate at the relevant time. Of course, there is no bar to such a debate being held in your Lordships’ House The noble Lord, Lord Eatwell, asked about data being provided to overseas territories being verified, and another noble Lord talked about verification. The UK’s persons with significant control register is publicly accessible and is accessed more than 1.2 billion times a year. This enables information to be cross-checked with other data sources to improve accuracy and the quality of information on an ongoing basis. This is the information which will be shared with overseas territories and Crown dependencies under the exchange of notes. The legislation that underpins the UK register includes its own statutory review clause, which will require its effectiveness to be reviewed and a report to be provided to Parliament by 2019 My noble friend Lord Naseby asked which international standards would be considered for the statutory review. As he stated, the statutory review provided for in Amendment 8 will take into account evolving international standards such as new FATF standards. The UK will be assessed against the new FATF standards over the next 12 months. Other jurisdictions such as the overseas territories will be assessed at a later stage. While the exchange of notes is focused on improving law enforcement outcomes rather than emerging assessments against international standards, our review will, of course, take into account the wider context The Government have listened and brought forward a concessionary amendment. I hope noble Lords will be satisfied that the issue of company ownership transparency will remain a high priority in the next Parliament, and that the statutory review, which will be laid in Parliament, will ensure that this is the case. On that basis, I hope that the noble Baroness and my noble friends will feel inclined not to press their amendments.