Small Business, Enterprise and Employment Bill — House of Lords, 2015-03-09
Topic: Mixed Topics
Howard Emerson Flight (Conservative, Centre-right): My Lords, I suggest that measures like this and other anti money-laundering measures are much more effective to the extent that they are common preferably among the G20 countries, but at least among the G8 and other more advanced parts of the world. There is less scope to pick and choose jurisdictions if the same rules broadly apply across all the important areas. In that context, I have made the point previously that it is not achieving much to say, "The UK is in the lead here". The question, in introducing measures like this, is whether they are going to be followed internationally and will be similar in order for them to be effective. Although I am no great lover of the EU, the forthcoming fourth anti-money laundering directive is extremely important. It is expected that it will require a central register of company-beneficial information, which data will need to be accessible to those with a legitimate interest; that is, law enforcement agencies and regulated entities. The word "legitimate" has not as yet been defined and I do not know whether it is going to be, but the supposition is that it would cover the proper investigative bodies for anti-money laundering, tax evasion and security matters The amendments in my name in this group hang together as a package and reflect the fourth EU anti-money laundering directive. Amendments 41, 43, 55 and 56 seek to mirror the expected terms of the directive: to limit access to proper and legitimate purposes as they are generally understood. The second important point, which is picked up in Amendments 39 and 40, is that the EU directive also requires the implementation of central registers of beneficial ownership. The amendments seek effectively to remove the option of individual companies keeping their own PSC registers at their registered offices and would permit the Government to require either that Companies House should keep a register, or if the Department for Business, Innovation and Skills wants to do it, it could do so. But it would clearly be messy to leave the option for companies to keep their registers and for there to be a central register as well. Surely it is better to have one or the other, but not either/or, which would further add to costs and complexity I thank the Minister for her helpful reply to my letter of 6 March. From her letter I detect some movement towards implementation, at least in practice, of what would be a more common EU approach to PSCs. The noble Baroness made the point in her letter that, although government Amendment 42 serves to remove the requirement for a person requesting access to a company’s PSC to state whether the information will be disclosed to any other person, a person seeking such access must provide their name, address and the purpose for which the information is to be used. The company will retain the right to apply to the court to refuse access if it suspects that the person is not requesting the information for a proper purpose. It will also be a criminal offence for a person to disclose information to another person if they know or suspect that such other person will use the information for an improper purpose. This is the language I have been arguing for—proper and improper purposes. My main objection to these measures has been that they would allow improper use to be made of the information about private companies, in particular writing about people’s private wealth in a potentially salacious way or stirring up hostilities. It seems that the UK is creeping towards mirroring the language of my amendments about proper purpose and refusing access to PSCs for what are not proper purposes. It would seem that the legislation, or its implementation in the UK, is shifting somewhat in the sensible direction, as I have argued throughout What matters is that the appropriate authorities—the tax and security authorities—can have access to information for proper purposes. Indeed, that is what the Prime Minister was saying at the G8 meeting, not that any old media individual can look up people’s personal affairs. I would ask this of the Minister. In the references she has made more recently to proper and improper purposes, it would seem that the legislation now provides much more protection against improper use than was the case before. If that is correct, it may be that my amendments are not necessary. Surely the right drift of things is that the measures across the EU should be pretty similar, led by this country but not with this country out of line and overgold-plated. I beg to move.