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Money-laundering and the Financing of Terrorism: EUC Report

Volume 715: debated on Monday 7 December 2009

Motion to Take Note

Moved By

That this House takes note of the Report of the European Union Committee on Money laundering and the financing of terrorism (19th Report, Session 2008-09, HL Paper 132).

My Lords, I hope that we move to rather less contentious issues. The report on money-laundering and the financing of terrorism, which is the subject of this debate, was prepared following an inquiry earlier this year by the European Union Select Committee’s Sub-Committee F, of which I have the honour to be the chairman. Thirty persons and bodies sent the sub-committee written evidence and between March and May we received oral evidence from 28 witnesses. I should like to say how grateful we are to all the witnesses who gave evidence to us, both written and oral. In expressing appreciation, I must put on record our appreciation of our clerk, Michael Collon, who has been tireless in supporting the work of the committee. I also note the work of Anneliese Baldaccini; she has now left the committee but she gave great service to it over a number of years.

The report was published on 22 July and we received the Government’s very full response on 6 October. I am very glad indeed to have secured a debate for the report only two months later. I hope that the Home Office has emerged from that dreadful period when we had to do business with Liam Fox, who was actually named by the Leader of the House for lack of attention in responding to the European Union Select Committee. In one case we waited for over a year, despite repeated reminders. We are now in much calmer and more helpful waters.

We are debating this issue only two months after we received the Government’s response. The timings of these debates are very important. Perhaps I may mention another report of this committee on which the timing of a debate is even more critical. Three days ago, on Friday 4 December, we published a report recommending that the Government should opt into proposals for two new directives on asylum. That report is the first since the treaty of Lisbon entered into force less than a week ago and we are the first to rely on the undertakings given to the committee during the passage of the European Union (Amendment) Bill by the noble Baroness, Lady Ashton of Upholland, who was then Leader of the House. She said that the Government would find time to debate these reports. She undertook that the Government would not notify a decision to opt into arrangements within eight weeks of the publication of the proposal. In this case, those eight weeks expire on the day that this House rises for the Christmas Recess. I speak with the authority of the whole sub-committee and hope that the Government will honour that undertaking by making time for a debate before the Recess. I hope that the noble Lord can give us that undertaking because, if the Government fail to do so and leave the debate until after the Recess, that would be a very bad precedent to the new arrangements under the treaty of Lisbon.

I return to the issue of money-laundering and this report. Money-laundering and the fight against it are a global activity. In the course of our inquiry, we therefore looked not only at the activities of the European Union but at those of other international bodies. Some of those, such as the Council of Europe, are well known, but the main international organisation fighting money-laundering is the Paris-based Financial Action Task Force—FATF. One of our recommendations was that the Government should report systematically to Parliament on the activities of FATF. I am glad to say that the Government accepted this recommendation and undertook that after each plenary session of FATF they would submit the chairman’s summary to Parliament. That is most welcome.

On 21 October, the Exchequer Secretary to the Treasury wrote to me enclosing the chairman’s summary of the October meeting, telling me that she had placed a copy in the Library of the House. While I am most grateful for this, placing a document in the Library is not the best way of making the activities of FATF more widely known. Our recommendation was for a Written Statement. I suggest that the Minister might make a Written Statement to this House on future meetings, explaining that the full summary had been placed in the Library, with the Government’s reaction to the most important developments. A model to follow, relating, as it happens, to money-laundering, would be the Written Statement on 26 November by the Parliamentary Under-Secretary of State at the Home Office on the third annual report on the suspicious activity reporting regime, which is closely involved with money-laundering.

The reporting of suspicious activities by the private sector to law enforcement bodies is the keystone of the fight against terrorism. It follows recommendations made by FATF, but those are only recommendations. They acquire the force of law throughout the EU by being incorporated in the third money-laundering directive. Effect is given to the directive in the United Kingdom by the Money Laundering Regulations 2007. It is under these regulations that banks, other financial institutions, lawyers, accountants, auditors, insurers, estate agents and many others are required to report to the Serious Organised Crime Agency any transaction or activity that seems to involve funds that are the proceeds of criminal activity. Knowledge to do that is unnecessary. The bankers explained to us that this is a suspicion-based regime—if you smell a rat, you must report it. In 2007-08 the banks alone smelt and reported 145,000 rats, of which 838 related specifically to terrorist financing.

We did not question the utility of this; it is central to the fight against money-laundering. But given the immense burden of the regime on the private sector, we questioned whether the regime should apply where the underlying criminal offence is minor or even trivial. Some of our witnesses, especially the Law Society, agreed with us. We recommended that the Proceeds of Crime Act 2002 should be amended to exclude minor offences. The Government, in a response that I commend for its careful consideration of our recommendations and, to be fair, its full response to them, explained at length why an all-crimes approach should be retained. They pointed out that there may be little correlation between the sums laundered and the seriousness of an offence, that an activity may be suspicious irrespective of value and that something that the reporting institution may regard as trivial may look very different to SOCA when considered with other intelligence.

I am disappointed that the Government cannot accept our recommendation. But, if not, it is all the more important that they should act on our other recommendations: to consult more fully with the private sector and to give greater feedback on the utility of all their work and its outcome. The Government accepted this and listed some of the many ways in which they currently provide feedback. This seems to concentrate mainly on the top reporters and on first-time reporters. More could be done with those, such as small and medium-sized firms of solicitors, for whom the reporting regime is a real burden to which they object strongly. They need to be persuaded that their contributions are of real value.

Suspicious activity reports, or SARs, are entered by SOCA on to ELMER—I am sorry for all the acronyms—which is, in effect, a database of suspects. Given the number of reports, it is a very large database. As one might expect, access to it is available to police forces and others responsible for prosecuting serious crime. One might not have expected the information also to be available to trading standards authorities or, as the noble Lord, Lord West of Spithead, explained in a Written Answer to my noble friend Lord Marlesford, who is in his place, to Nottinghamshire County Council, which wanted to use the database to investigate housing benefit fraud. This seemed to us to be an unwarranted use of information collected for a different purpose. We pointed out to the Government that the FATF recommendations do not require this information to be made use of other than in connection with serious crimes; nor does the money-laundering directive, which gives these recommendations the force of law, require that. “True”, say the Government, but they do not prohibit it, either. Since the Government maintain the all-crimes approach for SARs, it seems that they will continue to allow the data to be used even in connection with offences that could not by any stretch of the imagination be called serious.

We read a great deal these days about the iniquities of the DNA of persons who have never been charged with a criminal offence being retained on the DNA database, but I wonder how many people know that the details of their banking transactions may be retained on a database not because they are connected with a crime that has been committed but because a bank employee—perhaps a lowly employee on the salary scale—has a hunch that a transaction may be related to a suspicious activity. No steps are taken to confirm whether the suspicion is well founded, details of the transaction are retained for at least 10 years and anyone who wants to peruse the transactions relating to him on the database is unlikely to succeed, since SOCA is exempt from the Freedom of Information Act. As I said, these entries can be accessed by a wide range of bodies for purposes wholly unconnected with serious crime.

The committee does not believe that this situation can continue. We recommended that the Information Commissioner should review and report on the operation and use of the ELMER database. The Government tell us that SOCA has invited the Information Commissioner to discuss this. The deputy Information Commissioner wrote to me on 5 October to say that he had made an initial approach to SOCA to discuss how he might carry out that review. That was two months ago—time for the bankers to have reported a further 2,500 suspicious transactions. Has that meeting taken place? Has the review begun? What progress has been made? Where is all this leading?

I mentioned earlier the Council of Europe, which includes all 27 member states of the European Union and many others as well. It is the forum within which two international instruments have been negotiated, both of which would be very useful if only they were fully in force. The first is a protocol to the Convention on Mutual Assistance in Criminal Matters, which the UK signed in 2001 but had yet to ratify at the date of our report. In their response, the Government told us that the UK should be in a position to ratify it towards the end of 2009. The end of 2009 is fast approaching, so I hope that the Minister will have good news for us on that front. It is absurd to sign something in 2001 and not to have ratified it after all this time.

The second international instrument is the Warsaw convention. This is the first comprehensive international treaty covering both the prevention and control of money-laundering and the financing of terrorism. It addresses the fact that quick access to financial information is the key to successful anti-money-laundering systems. If in force it would extend to Council of Europe states provisions that otherwise will be available only within the EU. Yet the Government have yet to sign or to ratify it. They explain that it is their policy not to sign a convention without a reasonably firm intention of ratifying it—ignoring the fact that, as I said a moment ago, they signed the 2001 protocol which eight years later they still have not ratified. The problem with ratification of the Warsaw convention centres on a single provision. We were told in evidence that the Government intended to sign the convention very soon and to ratify it within 18 months. The Government say that their aim is to sign the convention in the very near future with ratification to follow. Has the Minister any news on that front? Can he tell us how soon is very soon and whether the very near future is still in the future? Is the 18 months that we were told in March would be the period to ratification now nine months?

Our inquiry dealt with other fascinating issues, to which other members of the committee will no doubt wish to refer. Not the least of them was whether ransom money paid to pirates found its way into the hands of terrorists, which the committee thought more than likely. It does not take much imagination to guess that that might be so. Clearly, almost all laundered money goes to those involved in illegal activities, but the Government should do more to find out whether money paid in ransoms to pirates—I am thinking particularly of Somalia—finds its way to terrorist organisations that we know have established cells in Somalia.

Although I have made some criticisms of the Government, our overall impression at the conclusion of the inquiry was that they are in the forefront of the fight against money-laundering and the financing of terrorism and in many respects are leading the way in showing what can and should be done to follow the cash and catch the criminal. For this we should all be grateful. I commend this report to the House. I beg to move.

My Lords, I am grateful to the noble Lord, Lord Jopling, for securing this debate. I pay tribute to him, as the committee’s chairman, for his commitment and expertise in making sure that the many strands of the inquiry came together in comprehensive proposals. I also echo his thanks to the committee clerk, Michael Collon, and the other staff who offered invaluable advice and help and who served the members of the committee so effectively. The committee was also greatly helped by the specialist adviser, Professor Bill Gilmore, with his knowledge of international law, the law of the seas and research into money-laundering, as well as by the many people who gave evidence.

It is important that the Government should find time in the business of the House for noble Lords to hear, read and debate the reports which come from the committees, and to do so in timely fashion, as the noble Lord mentioned. In this, as in other EU inquiries, the committee has had access to a very wide range of people and organisations with unrivalled expertise to offer. The resulting report brings forward analysis and proposals to benefit this country and other member countries of the European Union. The proposals are no less topical than when the report was published in July.

Although I shall restrict my remarks to some of the aspects of the report that the noble Lord touched on, I shall also reinforce some of our major concerns in the inquiry. The international standard-setting body is the Financial Action Task Force—FATF—set up in 1989 to combat the growing threat of money-laundering. There were varying assessments of its effectiveness, but it appears to operate as effectively as is consistent with a body which has to deal with matters by reaching a consensus among 34 nations and which now has a more recent counterpart in MONEYVAL. Among member countries, the committee found different interpretations and implementation of decisions, but the ones that we can most influence are the ones for the UK. I shall not repeat the decisions that the noble Lord has mentioned, or the two conventions that this country has failed to ratify, but I shall quote one of the conclusions of the report. It states:

“It is deplorable that negotiations for an agreement on mutual legal assistance, begun nearly eight years ago and concluded over six years ago, should still not have resulted in an agreement which is in force between the EU and the United States”.

I should like to press the Minister for a reply on the extensive delay in implementing that agreement and the Warsaw Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism.

The Government’s reply included the phrase that they are,

“pushing to increase EU cooperation and information sharing to improve seizure of criminals' assets and to combat money laundering”.

We ask: how are they pushing that and what actions are they taking so that implementation is not further delayed?

As we were undertaking the enquiry, there were news stories about piracy and demands for ransom from the seas off Somalia, in particular. Those incidents continue today. We have had the recent example of the couple who have been hijacked and ongoing incidents of tankers being set upon by Somalians. When we were investigating that part of the report, we were struck by the,

“sharp contrast between the naval efforts being deployed ... to deter and eliminate the threat from the rise of piracy off the Horn of Africa and the lack of any concerted action to prohibit the transfer of the proceeds of those criminal acts”.

The sums of money demanded by the kidnappers are extortionate. The millions still under discussion, I understand, for the British couple there, is a case in point. That is even more true when considering that this is one of the poorest parts of the world, where such enormous amounts of money would be a totally disproportionate force for good—or more probably, for bad, and quite possibly diverted towards terrorist or criminal activities.

In pressing for the sources of funding for ransoms and to track payments, we know that things continue to be disrupted in that part of the world. Global trade is suffering significantly. Global trade is itself deserving of international action, because the impact on EU member countries individually, but also on EU trade as a whole, is a highly significant factor in global prosperity and peace. The committee recommended that where payment of a ransom is being assembled in the UK, the authorities should be alerted and consent sought before the money is transferred. We understand that institutions would make a sound judgment about submitting an appropriate report, but perhaps the Minister will comment on how he sees that going forward to ensure that money remains tracked when it is falling into illegal hands.

If the public sector carries responsibility for criminal activities, so too does the private sector. We were struck by the evidence that we received from different private sector bodies, and made aware of the cost of compliance with financial services regulation, which may be wasteful and putting the sector at a serious competitive disadvantage. As the noble Lord mentioned, we heard that the Government have offered a review of the money-laundering regulations to establish effectiveness, proportionality and engagement. We urge those three factors to be present in any activity where the private sector has its part to play. It can fully contribute only if it is not hampered by undue burdens of compliance, which seem to be resulting in no useful outcome.

One of the factors in EU investigations is establishing clarity of communication, whether through use of a common language with common interpretation and understanding, or in making sense of daunting lists of acronyms and abbreviations. This enquiry was no exception, as can be seen from the four pages of Appendix 5—a very useful appendix—which lists 119 entries in its glossary. The EU must continue to ensure that barriers to communication are kept to a minimum.

In summary, global threats such as money-laundering and terrorism can be countered only by international co-operation. The UK's membership of the EU provides us with like-minded partners who share the aim of tackling such crime and the resources to counteract its destabilising effects. We hope that the recommendations in the report will be given due consideration and that further action will be taken on the response that we have already received from the Government.

I look forward to the other contributions to this debate and to the Minister's response.

My Lords, perhaps the House would allow me to correct what I said. I fear that I got my Liams muddied up. I think that I referred to Mr Liam Fox when I meant Mr Liam Byrne. I apologise in particular to Mr Fox.

My Lords, it was interesting and helpful to hear that apology.

I start by saying that this was an interesting committee, and I pay tribute to those who were responsible for the production of the report—the excellent clerk to the committee, Mr Michael Collon, and the specialist adviser, who again advised us extremely helpfully, thoroughly and knowledgeably; but, above all, the chairman, who guided us beautifully through all the difficulties. If I may say so, having sat in the Chamber for the past three-quarters of an hour, he did so in a much gentler, less curmudgeonly and more objective way than perhaps he did when he was participating in the previous business before the House. I can only say that that restored my faith in this Chamber as a calming influence even on Members such as the noble Lord, Lord Jopling.

I found this subject fascinating. It is one of those subjects where one thinks that one knows a lot about it and that it will be easy to grasp but, once you get into it, you realise that you do not know all that much about it and it is certainly not easy to grasp. Three questions arise in connection with money-laundering: first, what is it and is it a serious problem; secondly, is there sufficient machinery to deal with it; and, thirdly, is that machinery working and can it be improved?

The first difficulty for me was in trying to determine what money-laundering actually was. The definition that the committee eventually accepted was that it is the process by which the source and ownership of criminally derived wealth and property is changed to confer on it a perception of legitimacy. In relation to money-laundering offences, the committee concluded that, under current international standards, the three categories of offences were: first, the conversion or transfer of property for the purpose of concealing or disguising its illicit origin; secondly, the concealment or disguise of the true nature, source, location, disposition, movement, or rights with respect to or ownership of criminally derived property; and, thirdly, the acquisition, possession or use of criminally derived property.

It is patently difficult, if not impossible, to establish the full scope of money-laundering in the United Kingdom, although we have a Treasury estimate that serious crime involves every year perhaps £5 billion of assets in a possibly seizable form. On the other side of the balance sheet, one has to note with regret that the value of assets frozen or seized is very small. That inevitably raises, for me at least, the question of the efficiency and competence of the authorities responsible for dealing with those criminal offences and for confiscating the assets which have been criminally acquired. Speaking for myself, I found the evidence of international enforcement disappointingly diffuse.

The Financial Action Task Force—FATF—is a somewhat loosely constructed organisation which can best be described as a partnership between Governments. When it was set up, the European Commission and a number of other states were invited to join it to enlarge its expertise. Membership has since widened and there are now 34 members. Although it is recognised as the international standard-setting body in the field of money-laundering, we had the difficulty that no one from FATF was prepared to give evidence to the committee. This was a matter that the committee regretted, as it meant that we were unable to hear contemporary evidence on the organisation and its current activities. I suppose that FATF progresses as best it can, given its somewhat disconnected structures, but it will be necessary for it to be more forthcoming in future about what it does and how it does it.

Nor was I convinced that the co-operation between FATF and the international organisations which are concerned with this field is sufficient. The UK plays an active part in FATF, and the committee felt strongly that there should be a more systematic way of reporting to Parliament on FATF developments. I was pleased to read in the Government's response that they will submit the chairman's summary to Parliament following each plenary session. One hopes that that will help. In this connection, it seemed to me that the degree of international co-operation in combating money-laundering was somewhat over-complex, and I regret that was I not convinced that the UK was fully engaged with that international effort.

There are various international instruments that deal with this, some of which have already been mentioned. If one looks at the totality of these instruments and where the UK is positioned in relation to them, one has to come to the conclusion that something is lacking. In 2001, the protocol to the Convention on Mutual Assistance in Criminal Matters was signed. It is not yet in force for five members of the EU nearly eight years after the signature. There is still no full cross-border co-operation, even in obtaining details of bank accounts. The Government have an obligation to press other member states to ratify this protocol.

It is also thoroughly disappointing that there is no agreement yet between the EU and the United States. Negotiations have been going on now for many years. The EU and the US concluded an agreement on mutual legal assistance in 2003, which again contained important provisions on access to bank account information and banking data. The negotiations should by now have resulted in an agreement between the EU and the US. Progress has been extremely tardy and I hope that the Government will press for it to improve.

So far as the Council of Europe is concerned, the UK has not yet ratified the second additional protocol to the 1959 European Convention on Mutual Legal Assistance in Criminal Matters. The protocol was signed on behalf of the UK on 8 November 2001, but we have still to ratify it. It is in force for some states but not for the UK. Again, this is something on which the Government must use their best endeavours to produce an early ratification.

Furthermore, there is the delay in signing the Warsaw convention. As we state in our report,

“there is now no reason for any further delay. Still less do we see why a further 18 months should be needed before ratification”.

Since the Warsaw convention is, as the noble Lord, Lord Jopling, pointed out, the first comprehensive international treaty covering both money-laundering and the financing of terrorism, surely it is in our interest that it should be signed as soon as possible. It has now been signed by the EU and could have been signed by the UK.

The main conclusion to be drawn from this plethora of international conventions, instruments and agreements is that international co-operation is rightly regarded as essential in combating money-laundering. In that event, I think that the Government should show some urgency in this matter. The fact is that money-laundering can be dealt with only by intensive and detailed international co-operation. From the evidence we received, I certainly felt that this co-operation needs some fertilising. We have to look to the Government to take a more urgent stance in ensuring this international co-operation soon becomes a reality.

The other matter that I want to mention is SARs. These suspicious activity reports emanate from FATF recommendations 13 to 16 and chapter 3 of the third directive. They impose the duty to report to the appropriate authorities any transaction or activity that seems to involve funds that are the proceeds of criminal activity. The number of SARs now runs into many thousands. The British Bankers' Association gave evidence that it submitted no fewer than 145,000 in 2007-08. The problem with SARs is that there is very little consultation with the private sector and precious little feedback. The burden on the private sector is considerable. Much of the activity reported inevitably achieves little, but some is extremely helpful to the law enforcement authorities. In that event, it seems to me that those making reports deserve to be informed, even in general terms, of the success of their reporting.

There were a number of other controversial issues raised in our report, particularly piracy, which has just been touched on by the noble Baroness, Lady Garden, and hawala, a system for remitting money. I do not propose to deal with them in any detail but merely acknowledge that these two topics cause problems that were investigated at some length by the committee.

This was a useful exercise in analysing some of the many problems related to money-laundering and the financing of terrorism. It pulled together a number of different strands, which were perhaps operating on their own, so to speak, when they needed a degree of co-ordination. I hope that due account of this report will be taken by the Government and that our main recommendations may yet be accepted.

My Lord, I begin by adding my congratulations to my noble friend Lord Jopling on his expert chairmanship, to our clerk, Michael Collom, on his cool professionalism and infinite patience in shepherding his at times unruly flock, and to his support staff who assisted him. I do not forget our witnesses who so well illuminated our discussions and deliberations.

The focus of my remarks will be on chapter 4 of our report on the private regulated sector. I share the view of my noble friend Lord Jopling that the Government’s response to our recommendations has been disappointing, to say the least. Given this, I should declare some interests, which are recorded in the Register. I am chairman of three companies subject to regulation by the Financial Services Authority, and I am a regulated person. I was a member of the Securities and Investments Board, the first City regulatory body, and the Securities and Futures Authority, which was swept up into the Financial Services Authority.

In the light of what I am going to say, I should congratulate SOCA on being better than NCIS. It is not saying a lot, but it is better. When I was chairman of the audit and compliance committee of a building society in the West Midlands—we were a blue-collar society and made 400 or 500 reports a year, none of which was for more than £200 or £300 each—I asked the secretary of the committee to write to NCIS and inquire what use was being made of the reports we were compiling with such care. We got back a letter that was just this side of rude saying we should mind our own business.

It goes without saying that I fully and enthusiastically support the fight against organised crime and terrorism but I have to say the effectiveness and the cost-effectiveness of the present regime is deeply flawed for a number of reasons. The all-encompassing nature of the definitions in the Proceeds of Crime Act 2002, together with the all-crimes approach of the reporting regime, fails to take account of the costs of compliance to the private sector—not just the provision of the suspicious activity reports, but also the base data to companies, to partnerships and to virtually every man, woman and child in this country who falls under this particular provision. There is also the failure to grant third country equivalence.

Perhaps I can give the House some real-life examples of the consequences of each of these. The impact of the Proceeds of Crime Act 2002, the definitions therein and the all-crimes approach, is illustrated by one of my other directorships which is of a brewery. We operate breweries and 2,200 pubs. We sell pubs from time to time. When we sell them we have to complete a huge range of reports on health and safety, licensing, asbestosis, control of fat disposal, waste packaging regulations and a great many other issues. Unless we have completed all those, we have to make a suspicious activity report. This is because we have benefited to the tune of a few hundred pounds, probably, by not having completed the reports—we have inflated the price we have received for the particular public house. It is not just the cost of preparing the report. It is not just the way it is done. It is the diversion of SOCA’s time and effort from looking at and examining really serious cases. This is a pub company and by no stretch of the imagination can it be undertaking any money-laundering, serious crime or terrorism activities as a result of these sales. This is not unique. As my noble friend Lord Jopling said, talk to any solicitor in any part of the country who undertakes corporate transactions and there are simply thousands of these reports being produced every year.

Then there is the cost to individuals of compliance—individuals who may have had long standing relationships with financial institutions, clear life and career histories and unblemished credit records. Members of Your Lordships’ House may have experienced the extraordinary machinations to open a new account for a child, a grandchild or a godchild, even at a bank where the individual has banked for years. The fact that you are then asked to provide a utility bill shows the idiocy of the regulations. When does a child ever have a utility bill? Last January, I was approached by a bank where I have banked for 40 years which told me that unfortunately its money-laundering records were inadequate and that I had to provide a whole series of new records, including a certified passport. This is just a duplication of effort that achieves nothing and which incurs enormous costs both for the individuals who provide the information and the institutions which have to keep it.

Finally, there is the lack of third country equivalence provisions. A private equity company with which I am involved has recently completed an acquisition in France. Money-laundering checks have been carried out by our French solicitors, a well-known Paris firm. However, we had to begin afresh as our English lawyers advised us that we simply could not rely on French checks even though France is a member of FATF and as such is able to call on similar standards to this country. Our French colleagues were truly amazed by this duplication of work and effort.

It is getting worse. The spread of the money-laundering regulations and the lengths to which people now have to go are increasing all the time. Since July this year, the brewery has to carry out money-laundering checks on every new tenant of any of its 1,700 tenanted pubs. This is a new extension, the value and validity of which is very doubtful and which follows again from the all-crimes approach.

Our report makes a number of specific suggestions to improve the situation, which I fear have not found favour with the Government. They prefer to fall back, in their own words, on “prosecutorial discretion”, which is not good enough. No director of a company or partnership can possibly rely on prosecutorial discretion. The damage to reputation from a zealous member of SOCA who decides that prosecutorial discretion should not be waived far outweighs any possibility. As the noble Lord, Lord Richard, pointed out, it is not as though enormous sums of money are being recovered. Our report makes clear that £136 million was reclaimed by SOCA last year, not all of it from SARs. That is less than half of 1 per cent of the estimated cost of serious and organised crime of £20 billion. By contrast, the cost to the private sector is very large. Major City firms will say that the cost to them is well over £1 million per firm.

In the light of all that, it is not surprising that suspicion among many people in the private sector is that, for the most part, it is not the big well-organised firms which are caught. Instead, the net sweeps up the small and incompetent, as well as millions of our innocent fellow citizens. As a minimum, the Government need to offset the deadly effect of the combination of the all-crimes approach with the wide PoCA definition. They need to introduce third country equivalence, to undertake serious cost-benefit analysis, to improve the practical feedback and, as my noble friend Lord Jopling also said, to reassure people about the way in which the data collected on the ELMER database are being used and retained.

To conclude, the present all-crimes regime as regards money-laundering reminds me very much of some ancient tribal ritual. The great god—in this case the Serious Organised Crime Agency—needs to be propitiated. Propitiation is achieved in two ways: first, by filling in large numbers of forms in an entirely mechanical way, covering a vast number of members of the tribe. But that is not all. SOCA requires secondary and deeper propitiation by demanding direct reports. It is clear that the vast majority of these are a complete waste of time. As to the remainder, the god SOCA is reluctant to explain to his tribe what has been achieved by their preparation. Only the god SOCA has the wit and breadth of knowledge to interpret the forms, every one of which—collected at huge trouble and expense, but not SOCA’s expense—the god will tell you, needs to be completed in order to ensure the future prosperity of the tribe.

I have said that I fully support the fight against organised crime and terrorism, but this regime is not contributing to that fight in a cost-effective way.

My Lords, this will by no means be a tour d’horizon or a comprehensive response to the report, which I found more interesting than I had expected. I congratulate the chair and the members of the committee on navigating their way through the subject. The report is a mere 50 pages—I do not mean that pejoratively but comparatively—with a four-page appendix, as mentioned by my noble friend, which was required to list all the acronyms. I have not counted them, but I believe she said that there are 119. Having read the report, I have learnt one addition to my vocabulary; namely, the word “kleptocrat”. No doubt, I shall find an opportunity to use the word “kleptocracy” shortly.

A theme which runs through all Home Office matters is the quantity of legislation. So I was surprised by paragraph 80 regarding the transposition into national law of the framework decision on mutual recognition of confiscation orders, due more than a year ago. There has been plenty of legislative opportunity. After all, immediately after State Opening, the Government published the Crime and Security Bill, which in part amends the Policing and Crime Act, which had received Royal Assent just a few days before Prorogation.

I wish to mention two matters, which echo a number of points that have been made. On the database and the final recommendation as regards compatibility with the jurisprudence of the ECHR, I was glad to see that the Government have responded that they will consider this with the Information Commissioner. Not knowing and not being able to find out whether you are on the database is a matter of concern. The noble Lord, Lord Richard, and others have mentioned the cost of compliance by the private sector, particularly solicitors. I declare an interest in that I am a solicitor, although I am no longer practising.

I looked at the Law Society practice note today on the website and I recoiled slightly. I was not surprised at its evidence about the costs to solicitors, including the hidden costs. I recoiled because of the obvious complexity of it—not caused by the Law Society. I find the term customer or client “due diligence” counterintuitive. After spending many years attempting to foster a relationship with one’s clients, it does not come easily to have to exercise due diligence on them. I checked with solicitor friends before this debate, and I am told that clients are now so used to the regime that they come along armed with their ID, though the comment was made that real criminals would find it very easy to fake the requested ID. I was also told that it is now easier than when the regime started to find user-friendly and pragmatic ways of dealing with the requirements. This may be comparative; it did occur to me that my friends have been somewhat ground down over the years. However, they did mention that they know some firms still require their fee-earners to complete a six-page document before they can even see a client.

The noble Lord, Lord Jopling, has mentioned the Law Society. The chief executive of the society made a good point about feedback to those who have to comply with regulations, both in recognition of their burden and to work towards improvements in the system. The noble Lord, Lord Hodgson, mentioned the irritation that one can encounter. I recently tried to make an investment—not a very big one—in a building society, but because I had no debts they thought I did not exist. I suspect that was irritating to them; it was certainly irritating to me.

In conclusion, there is a temptation in a debate such as this, when reading about the problems, to call for an ever tougher regime. We on these Benches would want to resist that. We would not want to overlook the civil liberties issues which were at the centre of the debate we had earlier.

My Lords, there is a certain synergy between this debate and the debate with which we started today’s business. I hope that I am able to resist the temptation to repeat myself, not least on the potential for mission creep mentioned by my noble friend Lord Jopling, aided and abetted in much greater detail by my noble friend Lord Hodgson.

I start by congratulating my noble friend on chairing the sub-committee which produced this report, and drawing the House’s attention thereto. I must also congratulate him on securing this debate in what, in recent years, has become a remarkably timely manner. I agree with him absolutely that the delays on these reports have been an out and out disgrace, and the usual channels really should have been able to do better.

As the report states at the outset, serious organised crime is big business, with a suspected turnover of £15 billion per year in this country alone. I echo the noble Lord, Lord Richard, in asking: who is to say it is not higher? Whatever the figure, the scope for financing terrorist activities is therefore extremely large and a very worrying prospect. The international context of both money-related organised crime, including money-laundering, and terrorist activities means that it is quite right to examine the international dimension to the response to these threats, as the committee report does throughout chapter 2.

It should be obvious that the Government’s position is—and ought to be—that serious organised crime often has international drivers and emanates from abroad. It is therefore vital that the Government further international co-operation. Your Lordships’ committee flagged up in paragraphs 190 and 191 of the report at least one area where the Government could do a great deal more: they have not signed the Warsaw convention on money-laundering and terrorist financing. That convention would considerably ease the UK’s efforts to enforce civil confiscation orders. I hope that the Minister will be able to give noble Lords a progress update on whether, and if so when, the Government intend to sign the convention. My noble friend Lord Jopling, in particular, requested that information; I add to that request.

Article 47 of the Warsaw convention allows financial investigation units in other member states to request the postponement of suspicious transactions, but for some reason SOCA does not have the power to postpone suspicious transactions based on those requests. It can act only in response to notifications from the regulated sectors in this country. Could the Minister enlighten us as to how the external request procedure operates to bypass that problem? In the Government’s response to the report, we are told that they are still considering their position on Article 47, but that the aim is to sign the convention in the near future. That response was made in October. Could the Minister give some indication of whether, if they sign in the near future, they have thought any more about how Article 47 could be implemented? Are we about to have what I think would be the 14th piece of legislation emanating from the Home Office on crime?

The committee also recommended, at paragraph 189, that the Government hasten the ratification of the Convention on Mutual Assistance in Criminal Matters and related protocols. The 2001 protocol to the convention enhanced existing arrangements for mutual legal assistance between EU member states by allowing for the provision of banking information between countries to help combat crime. It has been in force for the UK since 13 June 2006, but I was alarmed to see that it is not in force in five countries. Would the Minister be good enough to both name and shame them? What are the Government doing to encourage other member states to ratify the convention? Will the Minister please tell us the non-EU countries with which the UK is negotiating bilateral asset-sharing arrangements? Of course, that is a rather different matter from the convention which I have just been talking about.

All parties agree that, in those areas at least, international consensus is crucial. That point was made forcefully by the noble Lord, Lord Richard. What steps are the Government taking to change the UK’s law enforcement culture to focus on the need for international co-operation? For example, what role do Europol and Interpol play? Do Her Majesty’s Government think those organisations fit for purpose? While the international dimension is important, moves can be made here in the UK which can help to ameliorate the problem. I will focus my comments on the suspicious activity reports regime operated by SOCA.

I understand that SOCA has been asked to provide increased levels of case-by-case feedback on suspicious activity reports to the regulated sectors. Some progress has been made in developing the feedback given to those who submit SARs, as they are called, but criticism has been levelled that the guidance provided to the private sector is too general to be of much use. That is problematic, as legislation puts the onus on the private sector to report suspicious transactions. Plainly, large financial institutions and professional advisers are better equipped to respond to the challenge, if only because they have greater resources. However, their smaller counterparts are less able to respond to the demands placed on them. Indeed I have heard complaints that those demands are sometimes unreasonable, for businesses of whatever size. I am not sure what size my noble friend’s brewery is—whether it is an SME.

To some extent, SOCA has sought to engage different sectors with sector-specific seminars for banking, insurance, legal and accountancy. In my view, this is a step in the right direction, but more needs to be done. I hope that the Minister will be able to answer some questions on the operation of SARs. For example, has an assessment been made of the contribution that SARs and the broader anti-laundering regime have made to crime reduction, or is this a subject for the Government’s blatant electoral Statement, “Frontline First: Smarter Government”, which some of us were listening to just before the start of this debate? Can he also tell the House how the SARs regime is affected by powers in the Counter-Terrorism Act 2008 such as due diligence, ongoing monitoring, systematic reporting, and limiting and ceasing businesses? What steps are the Government taking to maintain the use of SARs across the UK’s law enforcement community? SARs data have been data-matched with various other databases, such as the Joint Asset Recovery Database. Have they been matched with any other external databases?

It is plain from the committee’s work that the fight against organised crime and the effort to prevent the proceeds filling the coffers of those who would seek to perpetrate violent outrages is an organisationally complex and technically difficult area. I have asked some questions on the operation of various existing agencies, but I would also like the noble Lord to answer two more general points. First, have the Government assessed whether the economic crisis will result in an increase in money-laundering activity, or how the economic crisis will affect the use of the SARs regime by the private sector?

The second point is referred to in the committee’s report at paragraph 223. The current stance of the Government is to refute any claim that there is a link between piracy and terrorism. I note that the committee may not be of a similar opinion. However, is the Government’s view shared by key partners such as the United States, which is particularly concerned about what is happening in Somalia? Does the Minister believe, like the noble Baroness, Lady Garden of Frognal, that there is any attraction or indeed feasibility in the proposal to make the payment of ransoms to pirates an offence, something that might well be usefully considered?

All these questions have been prompted by the European Union Committee’s report on money-laundering and the financing of terrorism. I am grateful to my noble friend Lord Jopling and his committee for the opportunity to ask them.

My Lords, I begin by congratulating the noble Lord, Lord Jopling, on initiating this debate and on the thorough report that he and his committee colleagues have produced. I start by perhaps disappointing the noble Lord, which will not surprise him, and then perhaps surprise him a little by being more helpful. He made a request in respect of another report from the Select Committee, saying that he hoped that it would be the subject of debate before the Christmas Recess, and asked me to give an opinion. The noble Lord knows better than I that these matters are for the usual channels. I understand that a request has been made and no doubt the usual channels will take it on board. However, it is not for me to venture a comment.

While commending the decision of the Government to provide a summary of the report of the chairman of the Financial Action Task Force, the noble Lord suggested that a Written Statement would be more useful. The Government are happy to provide such a Statement on FATF’s work on a regular basis if the House would find that helpful. I hope that that goes a little way towards making up for the disappointment of my not being able to respond more fully to the noble Lord’s first point.

The ability to acquire, disguise and dissipate funds lies at the heart of most criminality and plays a significant role in facilitating terrorism. This welcome report and the useful and timely debate help to shape our approach to challenges facing us both here in the UK and globally in combating money-laundering and countering the financing of terrorism. The Government provided their response to your Lordships’ report in October, and of course agreed with the majority of the decisions. Perhaps not surprisingly, quite a lot of contributions from noble Lords tonight have been about cases where the Government have not accepted recommendations, or where we are not seen to have delivered, and some criticism has been made in respect of international protocols that are outstanding and which have not yet been responded to.

First, the UK Government have a strong commitment to the prevention and control of money-laundering and the financing of terrorism, and we currently have robust legislation and other measures in place demonstrating that dedication. We are committed to the aims and objectives of the Warsaw convention—a number of noble Lords made the point that it has been outstanding for some time—on the search, seizure and confiscation of the proceeds from crime and on the financing of terrorism. It is our aim to sign and ratify the convention. We are still looking at the method of implementation, but we give a commitment that it will be finalised as soon as possible in 2010. We made that very clear in the first conference of parities to the convention, which took place earlier this year in Strasbourg.

Secondly, other concerns have been raised, particularly in relation to Article 47 of the convention; these were outlined in detail in the Government’s response to the report. We are working to resolve those concerns as a matter of urgency and priority, and hope that it will be done as soon as possible.

The third element of the report highlighted concerns over the delay in concluding an EU-USA negotiation for an agreement on mutual legal assistance. The noble Lords, Lord Jopling and Lord Richard, the noble Baroness, Lady Garden, and others raised that as a matter of concern and sought an update on our position. I can confirm that the instruments of ratification for the EU and USA agreement on mutual legal assistance in criminal matters were exchanged on 28 October. The agreement will now enter into force on 1 February 2010. Similarly, the Government fully support the 2006 framework decision on mutual recognition of confiscation orders, and intend to implement that as soon as practicable.

I recognise that it was quite a sharply worded report on some issues. It is not the worse for being sharply worded, for it was no doubt the committee’s intention that it should be seen by the Government as both an encouragement and something of a stick to make the donkey move a little quicker. Noble Lords can take it that the encouragement that the Government received for their response to your Lordships’ report and, indeed, the bruises that some of the criticism has caused—both tonight and in the original report—are such that the Government are seeking to meet their obligations at the earliest possible moment.

We will write to the Council and the Commission to provide an interim report on the extent to which the UK has taken measures to comply with the framework decision on the application of the principles of mutual recognition to confiscation orders. We are currently content that the UK can largely give effect to the framework decision under existing domestic law. None of our fellow member states has criticised the effectiveness of existing provisions. We are not aware of any cases from member states in relation to confiscation orders that have been refused. Equally, we do not believe that member states have had difficulties in processing matters from the UK for assistance in confiscation matters under the present arrangements. Any matter received under this framework will be handled within its spirit, as far as is practicable. We do not foresee any major obstacle; the changes required to our law are likely to be mostly technical.

Another area where noble Lords raised concerns was on the question of the suspicious activity reports. Here, there is a point of difference. I must highlight to your Lordships that, as was said in our response as a Government, there may be little correlation between the sums laundered and the seriousness of an offence. Also, reports on the laundering of small amounts can help to tackle serious crime. Therefore, the Government remain of the view that we should maintain the all-crimes approach, and have set out their reasons in detail in response to the report. I know that this was countered somewhat strongly by one of your Lordships, but it is the case that the Government still believe that the use of prosecutorial discretion in this area is necessary. We believe that a regime with a de minimis exclusion would present significant risks, including of circumvention by serious criminals. An “all crimes” approach provides a far more flexible and responsive means for setting the boundaries of what is and what is not criminal conduct worthy of prosecution.

The issues were raised of burdens upon the private sector and doubts that the smallness of some of the amounts involved could lead to any great advantage. We have looked at this in some detail, and examples can be reported of how detecting the laundering of small amounts can help tackle serious crime. One is protecting the vulnerable. SARs on low-value transactions are increasingly being used to identify vulnerable and elderly victims of fraud. For example, suspicious activity on an account triggered a SAR, which resulted in an investigation into a member of a criminal family in an area. A man was arrested on suspicion of fraud. He had stolen the identity of an elderly victim and carried out several unauthorised transactions on credit cards amounting to over £5,000.

There is also the question of protecting business from fraud. There are details from the banking sector of an account that was in receipt of third-party cash deposits, all of which amounted to £3,000. The funds were then being quickly debited. On investigation, it was discovered that these out-of-character deposits related to the thefts of funds by the subject from an employer. The information in the SAR was pivotal in identifying the true sums stolen and, later, a conviction.

On the question of restraint, a number of SARs featuring restraint transactions of values under £1,000 have resulted in restraint orders being made on individual amounts that, when multiple SARs are looked at, come to thousands of pounds’ worth of seizable assets. That would not have been identified had we had a de minimis exclusion.

Reports are being made by banks on suspected tax credit fraud for small sums, typically tens or hundreds of pounds. SOCA receives many of these. HMRC can recoup the money and the bank can close the account as a result. Sometimes evidence of organised tax credit fraud is uncovered and investigated.

Some criminals use parts of the regulated sector to send small, fraudulent, frequent amounts, sometimes with several different identities, to consolidation points overseas. These individual amounts have been seen to be as low as £36, but can aggregate into sums of tens of thousands of pounds. SARs make a record of these sums, and the identities associated with them are then readily available to law enforcement and any investigation into criminal activities.

There is also the question of new criminal trends. Criminals develop money-laundering methods to exploit the new technologies and financial products, and to take advantage of those products through the new technology. Often those new methods are trialled on a small-amounts basis, but pave the way for large amounts when confidence in the method has grown. When new products have restrictions placed on them and can be used only to process low volumes, SARs reports on these transactions can assist the UKFIU in identifying emerging trends. We believe that there is far more to be seen than just the initial quantity of reports that are made, and we consider that it is still valuable to keep the “all crimes” basis.

The issue of the SAR database was raised by several noble Lords, and we were asked where we are with the discussions with the Information Commissioner. In early October, SOCA received a letter from Christopher Graham, the Information Commissioner, as part of existing correspondence on SOCA initiatives. In that letter, he referred to the House of Lords committee’s recommendation regarding the retention of data on the ELMER database. The letter states that, with SOCA’s co-operation, the Information Commissioner’s Office is planning to implement this recommendation in the form of a review. That review is likely to cover the legal basis for the establishment and operation of the ELMER database, together with SOCA’s relevant policies and procedures and an on-site inspection of the database. The purpose of the review will be to establish the extent to which SOCA, and possibly other contributory users of the database, are meeting the requirements of the Data Protection Act. The Information Commissioner may then make recommendations about future compliance. SOCA and the Information Commissioner’s Office are currently seeking an agreement on a timetable on which the review can take place, and SOCA will provide the Information Commissioner’s Office with all the relevant documents and assistance required. Again, we see that as a matter to be pursued with a degree of urgency.

Other issues included burdens on the private sector. The Government’s aim is to find a balance between a competitive advantage in our regulated sector and continuing to have an effective regime that combats money-laundering and counters the financing of terrorism. The noble Lord, Lord Hodgson, made this point at some length. I shall commend his contribution to my officials and colleagues, coming as it does from someone with considerable experience of several parts of business where this issue is as of much concern as it is to the Government and SOCA. 

The Government will continue to seek to minimise burdens placed on regulated firms where possible. The UK’s preferred risk-based approach, which has included adopting all the simplifying derogations within the EU’s third money-laundering directive, demonstrates our attitude.

 The Treasury, with the assistance of colleagues from the Better Regulation Executive, is conducting a review of the Money Laundering Regulations 2007. The review is considering evidence and is grounded in the three guiding principles of the UK’s financial crime strategy: effectiveness, proportionality and engagement. We expect to identify aspects of the regime that work well and areas that might be improved. The report following this review is due in the spring and will be made available to your Lordships.

The noble Lord, Lord Hodgson, and others mentioned the cost/benefit analysis. The Government recognise the importance of applying cost/benefit considerations to the anti-money-laundering and counterterrorist financing regime. Steps have been taken to improve the benefits of the SARs regime in the recently published three-year strategy, outlined in the Suspicious Activity Reports Regime Annual Report 2009. The report gives an assessment of the performance of the suspicious activity reports regime for the reporting year October 2008 to September 2009 and announces a three-year strategy. The main objective for the regime during the next three years is to increase the value and impact of the SARs regime, which will bring added focus and efficiency to the regime, driving up the benefits from the efforts and resources contributed by stakeholders.

Another important issue raised by the noble Lord, Lord Hodgson, and others was feedback to the business community and beyond. Further to the feedback initiatives outlined in the Government’s response in October, the Government have unveiled in the SARs annual report 2009 a number of further ways in which they intend to address the report’s recommendations on feedback. The issue of feedback runs through the strategy’s aims and is an integral part of the published action plan for the first year. SOCA recognises the importance of this issue to reporters and is committed to providing them with information where it helps them meet their legal requirements. I shall take on board the point made by the noble Lord, Lord Hodgson, that not just top reporters but also small and medium-sized companies are affected.

Another important issue raised, again because it was not one on which the report and the Government were necessarily in accord, was piracy. The Government regularly examine all available intelligence for evidence of links between piracy and terrorism. I have to say that, to date, we have found no evidence. I sympathise with the view that one cannot see vast sums of money being passed around in Somalia without believing that some of it could be going to terrorist organisations in one form or another. However, we have found no evidence of any operational or organisational links. There is much open-source speculation—we are all a part of it. The noble Lord, Lord Skelmersdale, asked what we are doing to try to establish whether it is true. It has not been possible for any of our or our partners’ intelligence agencies to corroborate it. Therefore, it is a question not of a country having a view, but of intelligence that we have been able to glean from allies, as well as from our own endeavours, failing to find any organisational or operational link. However, we shall continue to monitor the matter closely because we share the concern that many noble Lords expressed.

My Lords, before the Minister leaves that point, terrorism happens in every continent in the world, bar Antarctica. Has anybody been looking at pan-African terrorism, which I would have thought was inevitably going on?

I take notice of the question. I had not seen it in those terms. I am sure that we are not making a distinction by ignoring neighbouring states or states in any particular part of the world when we look at any links that there might be between terrorist organisations. We all know, alas, that terrorism is an international business that knows no boundaries. I am pretty confident that the answer is that we are seeking that information wherever it might exist. I take note of the question. If there is any useful information that I can add, I will write to the noble Lord.

On the other question about piracy, the Government do not make or facilitate substantive concessions to hijackers, including the payment of ransoms. However, the payment of ransoms is not illegal per se in the UK. When pirates attempt to spend money received in ransom payments, it is considered the laundering of proceeds of crime. We take, and encourage all Governments to take, firm action to identify and disrupt money-laundering. This was a point made by the noble Baroness, Lady Garden, and others. The latest position is that a group of experts from the UN piracy global contact group and other key regional actors will meet at Interpol headquarters in January to explore possible disruption techniques, which could prevent the laundering of piracy proceeds. This demonstrates the importance that the Government attach to addressing the problems of piracy. This group is the appropriate multilateral forum to advance work on this complex issue.

The Government recognise the committee’s concern that assembling and paying a ransom through a regulated sector without disclosing it may lead to the commission of a money-laundering offence or a terrorist finance offence. The Proceeds of Crime Act and the Terrorism Act provide such a person with a defence if he has a reasonable excuse for not making the required disclosure to law enforcement. As highlighted in the Government’s response, we have carefully considered whether the Government should issue guidance to the regulated sector in relation to suspicious activity reports but have concluded that it would not be appropriate to do so. We are not aware of any demand from the sector for central guidance, other than that which already exists, as produced by the Joint Money Laundering Steering Group.

The noble Lord, Lord Skelmersdale, asked me a series of questions. This is always painful for the recipient because they come about 30 seconds before you have to stand up and respond. The one that stayed in my mind was about the naming and shaming of EU member states. I am not sure that it is beneficial to name and shame, but the truth is that I do not have the names to shame, even if that were a desirable object. If the noble Lord will agree, I will write to him on that. Similarly, there is also the question of other countries with which we are negotiating bilaterally. I will write to the noble Lord about that, too.

Time is not on my side now. There are a number of points that I have not yet responded to. The noble Lord, Lord Hodgson, raised the issue of cost and money-laundering regulations. However, we believe that regulation is not overly prescriptive. Banks have their own requirements on how to satisfy themselves. Therefore, in a sense, there is more than one party in this area that needs to address that. I have a number of other points which I will save noble Lords from having to listen to. I will look at Hansard tomorrow, write appropriately and put a copy in the Library.

I conclude by again congratulating the noble Lord, Lord Jopling, and members of the European Union Committee on a very important report. I also thank those noble Lords who spoke before me for their contributions to the debate. I will write on any points that are outstanding. I express my appreciation of the statement made by the noble Lord, Lord Jopling, at the beginning of this debate recognising that the Government have sought to meet the recommendations of your Lordships’ committee. I hope that, with the additional information tonight, we have made that task slightly easier and that we have moved closer than we were at the start of the debate to your Lordships’ committee appreciating that we are committed and determined to move in the direction that your Lordships are seeking.

My Lords, I thank the Minister for his comprehensive reply. As a committee, we will particularly welcome his undertakings about a written statement on the affairs of FATF. I was pleased to hear that he expressed personal sympathy for the remarks of my noble friend Lord Hodgson and I hope very much that he will act on that and meet my noble friend at a later stage because his sympathy and apparent understanding of those points was most welcome.

I felt a certain amount of disappointment because when we talked about the urgency of some of these matters, the Minister fell back on saying “as soon as possible”. I know that it is difficult to give replies to detailed questions, but I hope that the Minister will try to ensure that “as soon as possible” means “very soon” and “get your skates on”. I hope he will be kind enough to do that.

I was most pleased to hear the kind remarks directed at me and more particularly at members of the committee who all worked extremely hard on this issue. It has been a great pleasure to be chairman of the committee. We were pleased that there seemed to be a good deal of press and media interest in our report when it came out, as a number of noble Lords said.

There are many technical matters involved in the whole issue of money-laundering and the committee would not have been able to produce such a good report as I believe it is had it not been for the technical assistance of Professor Bill Gilmore, who was our technical adviser. He co-operated with our Clerk and his staff in a most successful way.

The lessons that have come out of the debate are our concern about the burden on the private sector and the intrusion through the ELMER database on individuals. There is also a concern about the failure to sign and ratify international agreements. The Minister referred to that and I referred to it myself a second ago. Provided that the Government are prepared to get their skates on, we shall see a much better and more progressive picture to cover all the problems brought about by money-laundering.

Motion agreed.

House adjourned at 8.58 pm.