Sanctions and Anti-Money Laundering Bill [HL] — House of Lords, 2017-12-06
Topic: Law and Crime
Susan Kramer (Liberal Democrats, Centre to centre-left): My Lords, it is a privilege to support this amendment. I, too, participated in the passage of the Criminal Finances Act, and I can say with complete confidence that, had it not been for wash-up, the amendment proposed by the noble Baroness, Lady Stern, would undoubtedly have passed this House, and I think it was evident to everybody, including the Government, that it would not have been opposed in the other place either. It would now have been in place in law, which would have been a very good result both for this country and for those who suffer from this combination of kleptocracy, terrorism and industrial-scale criminal behaviour I think we agreed in the House then that those activities, which are so distasteful to everybody here, can survive only because there are portals that enable that black money to be converted to white. We have a responsibility to close down each and every one of those portals; it cannot be done in one fell swoop, but we need to do as much as we can as rapidly as we can. Indeed, when we look at much of the instability and much of the suffering across the globe, if we cannot make it financially disadvantageous for those who carry out so much of this rotten and corrupt behaviour, we will have very little ability to make fundamental change This amendment has long and far-reaching consequences because it takes such a significant step in continuing the British leadership role in closing down those portals. This is one reason why I am speaking here today. Another reason is to raise the EU question—yet again. The noble Lord, Lord Patten, inadvertently brought the issue forward in the previous group, I think possibly because he had to leave—he is not in his place at this moment—and he thought it important to raise it. The UK in its role has, in a sense, almost worked in two ways. It has worked to put pressure on the overseas territories and Crown dependencies to move to central registers, which I applaud. That process is under way and, for some countries such as Bermuda, has been in place for many generations. Getting to central registers is a very important step in the process of trying to counter tax haven abuse and money laundering. I recognise all that and, in fact, it would be interesting if the Minister could update us on the point that that progress has reached The benefits of that process rely on those central registers then being accessible to enforcement agencies in this country and other locations. If they identify a potential criminal, they can then try to chase down whether they have assets hidden in various locations—in this case, particularly in the overseas territories and Crown dependencies. That is an important step, but I am conscious—as is everybody in this Chamber, I suspect—that our law enforcement authorities have very limited resources. An issue, a name, a crime has to come to their attention; there has to be something that indicates to them where assets related to that may be located and they then have to pursue that process. They may get responses very quickly but, if I were a kleptocrat or a criminal, I would reckon the odds were so much in my favour that no enforcement agency would ever find my name and be able to identify the information that was necessary to enable it to pursue me. The odds are overwhelmingly in favour of those who continue to abuse this and to hide their assets That is why a public register is so crucial. We as a country have recognised that ourselves. We have made our own register of companies public and transparent. That is a huge and important achievement. We did not do it lightly; we did it because fundamentally, we felt that it was absolutely necessary, and that simply saying that enforcement officials could seek information from the register was insufficient Initially, Prime Minister David Cameron intended that the overseas territories and Crown dependencies would follow very much in that direction. But since then there has been new resistance in many, though not in every one, of those locations. Their argument is that they dare not move any faster than the pace of overall international change in increasing transparency. We all recognise very long grass when we see it. Our contribution must be to use the powers that we possess, and the relationships that we have with our overseas territories—it is much more difficult with the Crown dependencies—to achieve that transparency and those public registers An additional, much smaller but not irrelevant, issue faces us now if we go through the process of Brexit. As my noble friend said earlier, the EU has become much more aggressive in trying to tackle issues around tax havens and money laundering. An article in the Observer on Sunday—I am sure the Minister read it—contained a fair amount of evidence that the British Government have used their influence to try to protect the overseas territories and Crown dependencies from appearing on the blacklist being developed, and even not to have them on the "on notice" list. In the end, on the "on notice" list are Guernsey, Jersey, the Isle of Man, Bermuda and the Cayman Islands: that is not the complete set of overseas territories and Crown dependencies, but many of them are on the list. There is a general perception that some of those places might have made it on to the blacklist had there not been protection from the British Government. I do not mean that in a corrupt way, but there is a sort of—how shall we say?—professional courtesy that one member of the European Union offers to another in understanding its particular issues and concerns, and in holding back its hand. If we leave the European Union that will no longer be there. If those countries turn up on the blacklist, the consequences for them will be severe, and the consequences for us—as, in a sense, the overarching authority—will also be severe. If we leave we will be in the position of trying to negotiate a continued relationship in financial services that lets us sell those services across the European Union and keeps us, in a sense, as the primary centre for financial services for the EU and the continent of Europe. That will not be facilitated if we are seen as standing in the way of action that could bring about the transparency that is necessary I fully understand that we have often been ahead of the curve, and that is brilliant—but I am talking realpolitik here. With the EU catching up on the positions that we have taken, and looking at the crucial decisions that could be made if we were to Brexit, it becomes additionally important that we tackle this issue now. This is our only opportunity to do that in a timely way. So I hope very much that the Minister will look at this issue and all its complexities The noble Lord, Lord Hain, made a passionate speech earlier, and we were all shocked by the exposé that he brought so significantly to our attention. That simply underpins the fact that the amount of money involved, and the extent and dimensions of abuse in the world of finance—whether by kleptocrats, terrorist organisations or criminals—are enormous, and reach into every aspect of life. This is an issue that we have to take seriously: this is our chance to take another step forward in tackling it, and I hope that the Government will seize it.