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Sanctions and Anti-Money Laundering Bill [HL]

Volume 788: debated on Wednesday 24 January 2018

Third Reading

Relevant documents: 7th, 10th and 11th Reports from the Delegated Powers Committee

Clause 43: Money laundering and terrorist financing etc

Amendment 1

Moved by

1: Clause 43, page 33, line 16, leave out paragraphs (a) and (b) and insert—

“(a) enabling or facilitating the detection or investigation of money laundering, or preventing money laundering;(b) enabling or facilitating the detection or investigation of terrorist financing, or preventing terrorist financing;”

My Lords, it is a pleasure to stand before the House once again, and to speak to Amendments 1, 2, 5, 6 and 7. Although these are tabled as government amendments, they have been prepared through close collaboration with noble Lords. In particular, I convey my thanks for the collaborative and constructive engagement that we have had with the noble Baronesses, Lady Bowles and Lady Kramer.

I said at Second Reading, and have said throughout the Bill’s progress through your Lordships’ House, that I intended to co-operate and work constructively with all noble Lords as this important Bill progresses through the House. I am pleased—and I am sure that the sentiment is shared by all noble Lords—that we have been able to conduct debate on the Bill in this very spirit and that the noble Baronesses have been able to sign these government amendments. They improve the Bill, and I hope that the amendments which we will discuss today will further satisfy all those in your Lordships’ House that the powers in the Bill are appropriate for the UK’s future anti-money laundering regime.

In brief, Amendment 1 requires that future regulations made under Clause 43 can only make provision which enables or facilitates the detection or investigation of money laundering or terrorist financing. Power remains within Clause 43 to make regulations that prevent money laundering or terrorist financing and to implement the standards of the Financial Action Task Force. This clarifies the purposes for which regulations can be made and addresses concerns that have been raised by noble Lords.

Amendment 2 is a technical change which extends the definitions of money laundering and terrorist financing contained within Clause 43(4) to the proposed new clause that would be introduced in connection with the register of beneficial ownership of overseas companies that own UK property through government Amendment 3, which I will speak to later today. This amendment is necessary to ensure that the definitions already contained within Clause 43 are consistently applied throughout the sections of the Bill that relate to anti-money laundering.

Concerns have been raised over the breadth of paragraph 2 of Schedule 2. Amendment 5 addresses these concerns by limiting the ability of regulations made under Clause 43 to require only relevant government departments, anti-money laundering supervisory authorities, and persons carrying on a relevant business to identify and assess risks relating to money laundering, terrorist financing or other threats to the integrity of the international financial system. This also clarifies the scope of the power and essentially reflects the current position within Regulations 16 to 18 of the money laundering regulations 2017. This narrowing of the scope of potential duties to carry out such risk assessments is consistent with the approach currently taken by the United Kingdom’s anti-money laundering framework.

Amendment 6 will ensure that any regulations made under paragraph 3 of Schedule 2 to require a relevant person to adopt policies, controls and procedures must also fulfil the condition that these policies, controls and procedures are appropriate to the size and nature of the relevant person’s business. This will provide further certainty for firms that our existing approach within the money laundering regulations 2017 will not undergo fundamental change after the UK ceases to be a member of the European Union.

Finally, I would like briefly to explain Amendment 7. This is a technical amendment which is needed to define “relevant business” as business of a kind which entails,

“risks relating to money laundering, terrorist financing or other threats to the integrity of the international financial system”.

This amendment ensures that the Bill’s clauses remain legally consistent throughout.

These amendments follow the careful discussion and, as I referred to at the start, collaborative engagement that has taken place since Committee. They are a testament to the proficiency and collegiate work of your Lordships’ House, and I urge noble Lords to accept them. I beg to move.

My Lords, I start by thanking the Minister, the Bill team and other officials, who have all played their part in getting this suite of amendments to Clause 43, as it now is, and Schedule 2 on to the Marshalled List. We had a flurry of meetings following the Recess and, once we got down to detailed discussion with papers and checklists, good progress was made. As has been said, I have added my name to the amendments because they deliver the understandings reached in our meetings—and that is also the view of my noble friend Lady Kramer.

I thank the noble and learned Lord, Lord Judge, and the noble Lords, Lord Pannick and Lord Collins, who on Report added their names to my amendment, which paved the way for today’s amendments and for the undertaking given on Report regarding tighter language in the potential modification of the definition of terrorist offences. That yet-to-be amendment depends on achieving resolution in the other place on how to deal, on the face of the Bill, with any necessary extension of criminal offences. I remain ready to assist with that on the anti-money laundering aspects.

When we started out with the Bill, there was no policy in Part 2, yet it gave sweeping powers to amend, rewrite or revoke the anti-money laundering legislation. There were no safeguards, save for the Minister saying, “Trust me—and all my successors—in all circumstances”. Clause 43—Clause 41 as it then was—could have resulted in too little in future, and Schedule 2 could have allowed too much. It took a bit of a journey to elucidate that the problems lay as much with what was not in the Bill as with what was in it, and I thank your Lordships for bearing with me in my endeavours to explain and then distil the main essence of the missing parts.

The words “enabling or facilitating” in Amendment 1 to Clause 43 will further define the detection or investigation of money laundering and terrorist financing purposes for which regulation may be made. This means that the scope and effectiveness of the present rules cannot be undermined—that would hardly be “facilitating”—but it gives some leeway for change, such as updating thresholds or removing redundant measures that perhaps other vocabulary such as “maintaining” or “strengthening” would have prevented.

My concerns with Schedule 2—apart from criminal offences by regulation—were that it was not at all limiting, potentially covering anyone and everyone, with unlimited scope to the burden imposed and no provision for relevance or guidance. Now, Amendment 6 narrows the scope of who can be covered and reflects far better that it is a shared process where the assessments are made at the three levels of Home Office and Treasury, supervisors and relevant businesses. Along with the protective effect of amended Clause 43, this provides the framework we sought and that, in the context of the current regulations, I described as the cascade of responsibility. No longer can it be read that an individual or business takes on the whole burden.

Amendment 7 is now clearer in its drafting and, very importantly, businesses will be subject only to a burden that is appropriate having regard to the size and nature of the business that the person carries on—now defined as “relevant businesses”—and those businesses also have to be of a kind that entails risks relating to money laundering, terrorist financing or other threats to the integrity of the financial system, which now appears in Amendment 8 and was part of the Report stage concessions.

Together with other amendments from Report, with the statement by the Minister that, despite the without prejudice wording, Schedule 2 is limiting, and with the agreed pending matters to be dealt with in the other place, I hope we can all agree that this is a much improved Bill with regard to the administrative anti-money laundering aspect of Part 2.

More generally, I hope that the Government will take note, as other Brexit power-transferring Bills come along, that they do require policy to be stated or restated alongside empowerments, especially when they give sweeping powers to redo everything by regulation. In particular, the twin spectres of permissions to do too much and permissions to do too little need laying to rest.

My Lords, I had not intended to speak again—your Lordships have been patient with me already—but there is a slight problem. Someone in the Minister’s office must have had a Homeric nod, because Clause 43 makes the express provision that regulations under subsection (1) may not make provisions that create new criminal offences. That was consequent on the vote in the House last week. Unfortunately, criminal offences remain in Schedule 2. Regulations under Section 43, in paragraphs 18 and 19, provide for the creation of criminal offences. Something has gone wrong and I look forward to the Minister telling the House how he proposes to deal with it.

A similar point arises in connection with Clause 17. The original clause made provision for the creation of criminal offences punishable by up to 10 years’ imprisonment. That proposal was defeated in this House and does not appear in Clause 17, which is the former Clause 16. However, in Clause 17(6) there is a provision that:

“Regulations may provide that a particular offence which is … created by virtue of this section”.

There is no such power, so I wonder whether the Homeric nod extended to both parts of the Bill.

My Lords, I thank the Minister for the amendments he has tabled. I support the noble and learned Lord, Lord Judge. One has to think that the continued inclusion we have just heard described was inadvertent and that the Minister will make sure that it is cleaned up immediately in the Commons—otherwise we will have to address the issue when the Bill returns to this House so that it is consistent throughout.

My Lords, I rise briefly to thank your Lordships’ House for allowing me to speak at length on three occasions to spell out the corruption and money laundering involving some British companies. I am told by those involved that, when the leadership change took place in South Africa just before Christmas, these interventions had some effect on the margin, and I am grateful for that. I thank in particular the Minister. When last Monday I spoke on Report, I think that I may have strayed outside order, narrowly—or not, as the case may be. I am grateful to him and to those involved for their tolerance. I have thanked him personally but I wanted to put it on the record.

My Lords, I will speak exceedingly briefly because so much has been said. In fact, it has all been said, but it has not been said by me—and I refer of course to the thanks. I thank in particular the Minister, who took the view from the beginning that, if we worked together, we could improve the Bill. I appreciate so much that approach to this piece of legislation. It has been reflected in his Bill team, which, I may say, is made up of people of exceptional quality. They understood the issues we raised and recognised that we were not being either party political or pernickety but, rather, that our points touched on fundamental issues. They also understood that changes could be made to the Bill that would meet the requirements not only of the Government but also of those of us who thought that the way the Bill had been drafted achieved a transfer of power from Parliament to the Executive that was not appropriate—and I suspect in this case was probably not intended. Members of the Bill team also responded with very creative language rather than casually accepting our wording. They did not take what we provided and simply print it; they went back and looked closely at the issues, and came forward with very satisfactory language.

Like others in the House, I thank the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, for leading the charge on removing the powers for Ministers to create criminal offences—something that is so fundamental to our underlying constitution. I hope that the Minister has taken on board that there seems to have been a slip, so that consequentials have remained in the Bill when they should have slipped out. I hope that it will not be necessary for this House to have to deal with them. When the whole issue of criminal offences is considered in the Commons, I hope that it will be dealt with in the appropriate way and in the spirit in which the Bill has moved forward.

I have one last set of particular thanks. Obviously my noble friend Lady Northover will make formal thanks to everyone later, but a key player in all of this has been my great friend and colleague, my noble friend Lady Bowles. The attention that she has paid to the detail of the Bill, and her assiduity, have unlocked everyone’s thinking by demonstrating that you could use reasonable language and sensible approaches to shape the Bill into something better. It has been an exceptional example of the work that this House does in an extraordinary way. I know that my noble friend is relatively new to the House—although she is not new to politics or to Parliament—and I am grateful to her and I really appreciate the fact that the Minister has recognised the contribution that she has made.

My Lords, I will save my thanks for later, when we consider the Motion that the Bill do pass. Before then, I want to echo the comments about how this Bill has proceeded in terms of the concerns of noble Lords which, of course, have turned on how we as a Parliament can constrain the Executive when they are seeking powers. Of course, this is the first Brexit Bill that the House has considered, and we heard earlier that we have another Bill on its way here. It is my intention to speak in the debate on Second Reading of that Bill to raise again our concerns about an Executive power grab, in particular when it concerns the important issue that the noble and learned Lord, Lord Judge, raised about powers to create criminal offences.

In one of those debates, the noble and learned Lord—of course, the noble Lord, Lord Pannick, also raised these issues—gave us a history lesson about Henry VIII. What struck me was when he said that not even Henry VIII had the nerve to take these powers. Not only have this Government had the nerve, but even when the House spoke overwhelmingly on this subject, we still have errors creeping into the Bill as it has been presented to us today. I hope that this is an error and that, when the Bill goes to the other place, we will not see an attempt to grab power back and that we will get this sorted out in accordance with the wishes of this House.

On the anti-money laundering provisions, as I said, this House, across the board, has done an excellent job of scrutiny, and I think the Minister has done an excellent job of listening to our concerns.

My Lords, I once again thank noble Lords for their support on these amendments. I have listened very carefully, as I always have, to the noble and learned Lord, Lord Judge, on the issue of criminal offences. I think he referred to Clause 17 and Schedule 2. I assure him that we will return to this in the other place to ensure the consistency of the drafting. I will certainly take this up, but I can give him that reassurance.

Apart from that, I wish again to extend my thanks to all noble Lords who have engaged constructively. To pick up on the point made by the noble Baroness, Lady Kramer, I understand that the noble Baroness, Lady Bowles, was out in New Zealand. It is a good example for all of us that, if you have a 23-hour or 24-hour flight, drafting amendments is one way of utilising that time. I beg to move.

Amendment 1 agreed.

Amendment 2

Moved by

2: Clause 43, page 33, leave out line 24 and insert “In this Part—”

Amendment 2 agreed.

Amendment 3

Moved by

3: After Clause 43, insert the following new Clause—

“Reports on progress towards register of beneficial owners of overseas entities

(1) The Secretary of State must, after the end of each reporting period, publish a report explaining the progress that has been made during that period towards putting in place a register of beneficial owners of overseas entities.(2) For the purposes of this section, the following are reporting periods—(a) the period of 12 months beginning with the day on which this section comes into force; (b) the period of 12 months beginning with the day after the end of the period mentioned in paragraph (a);(c) the period of 12 months beginning with the day after the end of the period mentioned in paragraph (b).(3) The first and second reports under this section must include—(a) a statement setting out the steps that are to be taken in the next reporting period towards putting the register in place, and(b) an assessment of when the register will be put in place.(4) The third report under this section must include a statement setting out what further steps, if any, are to be taken towards putting the register in place.(5) Where a report is published under this section the Secretary of State must lay a copy of it before Parliament.(6) For the purposes of this section “a register of beneficial owners of overseas entities” means a public register—(a) which contains information about overseas entities and persons with significant control over them, and(b) which in the opinion of the Secretary of State will assist in the prevention of money laundering.”

My Lords, this amendment seeks to set down in legislation the commitment I made on Report that the Government would make regular reports to Parliament on the progress being made on its proposal to create a register of beneficial owners of overseas entities that own or buy property in the UK or participate in UK government procurement. The new clause requires the Secretary of State to publish and lay before Parliament three reports on the progress made to put in place the register. Each report will be due after the expiry of a 12-month reporting period. The first and second report must set out the steps that will be taken in the next reporting period towards putting the register in place and an assessment as to when the register will be put in place. The third and final report must also include a statement setting out what further steps, if any, are to be taken towards putting the register in place.

Noble Lords will have noted that my noble friend Lord Henley, the Business Minister, this morning laid a Written Ministerial Statement before the House confirming the Government’s intention to publish a draft Bill for scrutiny this summer, as I said on Report, and to introduce a Bill in the second Session—an assurance I gave on Report—and for the register to be operational in 2021.

I also reassure my noble friends, particularly my noble friend Lord Naseby, that the amendment places a duty on the Government to report on progress against implementing a public register of beneficial ownership of overseas legal entities involved in property or procurement within the UK, and will not cover the overseas territories. It would be fair to say that the House had quite a frank debate on this subject only last week. As the House decided, it is for the legislatures of the overseas territories to implement a public register. I reassure noble Lords that we will continue to work with our overseas territories. Indeed, the review periods of 2018 and 2019 that I highlighted will also reflect our continued co-operation with the overseas territories concerning their obligations.

I therefore hope that this covers the assurances that noble Lords, particularly my noble friends, sought, and that my noble friend Lord Naseby will be minded not to press his amendment. I beg to move.

Amendment 4 (to Amendment 3)

Moved by

4: After Clause 43, in paragraph (6)(a), after “entities” insert “that own or buy property in the United Kingdom”

My Lords, when I studied the amendment that my noble friend on the Front Bench tabled, I was concerned about the expression “overseas entities”, so I went to the dictionary and looked up “entities”. The Bill does not use the terminology “overseas entities” anywhere, nor do any of the proposed amendments, so it is unclear what it means except in the ordinary meaning of the words; that is, they may apply to structures or arrangements that have legal personality and are not formed in the United Kingdom. My noble friend on the Front Bench made it clear that the Bill does not intend to single out the overseas territories but would apply to all entities registered in all jurisdictions around the world.

I do not believe that it is the United Kingdom Government’s intention to allow the power in proposed new subsection (6)(b) to be infinitely broad. My interpretation is that it is an attempt to refer to entities for which the Government launched a consultation in April 2017. It was called the OCBO register at one point; it has also been called the register of OLEs. This extends to overseas entities that are legal owners of UK real estate or that enter into contracts with UK public authorities. As such, it seems aimed primarily at entities used by certain Middle Eastern investors to purchase London real estate.

However, as I understand it, the Government have yet to respond to that consultation with details as to precisely which activities should or should not be captured. There seems still to be degree of indecision. As a result, I hurriedly put down an amendment, which is why it is starred on the Marshalled List.

There is a concern on my part and, I imagine, that of others, that the Government may be attempting through this amendment to give themselves latitude to decide the precise definition at a later date. I hope that that is not the case, but there seems a possibility as the Bill stands at the moment. Either I will withdraw the amendment if I receive a reassurance from my noble friend or it may be left to the Commons to put down a precise amendment to cover this slight difficulty that I and others foresee. I beg to move.

My Lords, I was responsible for putting down the amendment which I think provoked this amendment to the Bill. As many noble Lords may remember, the background was anxiety expressed around the House about the fact that large parts of central London and outside London were being bought up by legal entities and companies, often with money laundered proceeds of crime and corruption—it is an increasing problem. Although the Government had committed to set up a register, they were taking some time about doing it and the attempt was to bring matters forward.

I am glad that my noble friend was able to give reassurance to the House that the register would be coming forward and that a Bill would be drafted, and indeed went further by promising that there would be regular reporting about progress. That, as I understand it, is the purport of proposed new subsection (3).

I am sorry that I have banged on about this issue for some time—throughout the passage of Criminal Finances Act, through Questions and through the course of this Bill—but I remain unrepentant. I was particularly reassured about this when I attended a lecture given by the distinguished author and journalist Misha Glenny on Monday. He has spent 10 years or so studying international crime and money laundering and is the author of the book McMafia, which is now the basis of a successful television series. He outlined for the audience the scale of money laundering throughout the world, principally following the collapse of communism, and how it has spread to all sorts of jurisdictions, the United Kingdom being one in principle. He showed the audience a map of central London showing the extent to which prime London property is now owned by kleptocrats: let us not beat about the bush—that is the position. He said, however, that worldwide there is a feeling that we should be fighting back against this appalling scourge of money laundering. He identified the most effective way this country could do this as being to set up a register to make sure that nobody could hide behind the cloak of anonymity and thus be able to launder the proceeds of crime through central London property. This is why this remains an important procedure.

I am very glad that the Government are committed to doing what they said they will do. I will be keeping the Government up to the mark, as I am sure other noble Lords will. My noble friend Lord Hodgson has one query about the amendment. Subject, of course, to the clarification that my noble friend Lord Naseby seeks, I join others in thanking the Minister and his Bill team for their co-operation on this issue and on all issues. My real sense in dealing with the Bill is that it is not a party political exercise at all; there is a real cross-party endeavour to make sure that this is as effective as possible.

My Lords, I have put my name to various amendments on this issue, going back to the Criminal Finances Act last April, and I add my thanks to my noble friend for having listened so intently and for having tabled Amendment 3, which we are debating this afternoon. As I prepared for this discussion in Committee, I raised a couple of points with his office. As ever, he and his office were punctilious in responding, but some clarification might be helpful for those of us who are not as accustomed and learned in the law as others are.

The first issue concerns commencement. Originally, reading this through, it appeared to fall under a clause where the commencement was set by the Secretary of State and that was the trigger for the 12-month clock. I was concerned that we might have a delay in the Secretary of State triggering this clause: it was not in Clause 54. The commencement of each clause is set down, but the commencement might be delayed. The Minister’s office pointed out that Amendment 5 triggers the clock on Royal Assent. It would be helpful if he could make that clear. It would also be helpful if he could say when he expects Royal Assent to take place, although I quite understand that he cannot give a commitment. If Royal Assent is delayed, let us say through the summer, it might be nearly two years before we get the first report: if commencement were to start in August or September, it would be September 2019 before we get news of any progress whatever. So it would be helpful to the House if my noble friend, either now or by writing to those of us who have been involved in the proceedings on this Bill, will say how and when he expects the clock to start ticking.

My second point concerns an omission in the words of Amendment 3, which we are debating. When my noble friend Lord Faulks and I tabled Amendment 75 —and earlier amendments—it did not cover just a register of companies and other legal entities registered outside the UK that own or buy UK property but also covered those which,

“bid for UK government contracts”.

Those words do not appear in the amendment before us today. My noble friend’s officials have drawn my attention to, and indeed he has mentioned, the Written Ministerial Statement, tabled today, that commits the Government to dealing with a public register of beneficial owners of non-UK entities that own or buy UK property or which participate in UK government procurement. So, that is covered in the statement, but it is disappointing that we do not have it in the Bill, which is where we started and what we hoped for when we set out on this long and rather stony road.

Of course, it is true that this aspect has been rather overlooked in our debates. The glamour, if that is the right word, of people buying £19 million Mayfair properties when they are paid £250,000 a year has rather caught our eye. I plead guilty to that myself. However, it is very important that we tackle this because it is an area where anecdotal evidence is everywhere but hard facts are much harder to come by. A lot of people would suggest that organised crime will try to establish an inoffensive base—an everyday activity that will not arouse suspicion—and once that has been established, the tentacles can spread out. Often mentioned at local government level are such things as waste disposal, landfill, rubbish collection and taxi services. That is because local government have only two criteria for awarding contracts: price and technical competence—that is to say, “Are you the cheapest price and can you do the task for which you have tendered?” There is absolutely no requirement to take police intelligence into account in awarding a contract. I am told—inevitably by high-level anecdotal evidence—that some Italian gangs have been moving north in Europe, into Germany, in a very well-planned, organised and controlled way, and we have no idea yet whether they have reached the United Kingdom.

People say, “Have you come across this? Have you come across that?” There is a concern that there is a great deal more criminal activity in government contracting than is realised, and some people suggest that there is a reluctance to dive deep into this area because people may not like what they find out. It would be most helpful if my noble friend can say a bit more about the way in which overseas firms that participate in government contracts will be integrated into what is basically a property register. It would be helpful to hear about monitoring methods, sanctions, enforcement and, above all, the phrase in the Government’s Written Ministerial Statement that refers to beneficial owners of non-UK entities that own or buy UK property,

“or which participate in UK Government procurement”.

Does that include local government procurement, because obviously that is where some of the most difficult and problematic things—and the easiest points of entry for people with malice aforethought—are?

We still have some work to do in this area. Nevertheless, in concluding my remarks I thank my noble friend very much for what he has done so far. The steps he has taken are in the right direction, but we still have some work to do on looking at government procurement and whether this issue covers local government procurement, as I am not sure we have got it all quite right yet.

My Lords, I want to make a short intervention on this issue. Your Lordships will remember that the amendment, moved with great energy and skill by the noble Baroness, Lady Stern, to extend public registers to overseas territories—by order, if necessary—was defeated in this House by a narrow margin. It was notable in the speeches of those who stood up to support the government position that we should focus on central registers and that public registers would not be part of that agenda. Speaker after speaker—the majority—spoke against public registers of every kind. I noticed a lot of nodding on some Benches because the arguments were around the importance of privacy, non-intrusion and the protection of identity. Anyone listening to that debate would have assumed that this House was taking a stand against public registers. It is crucial that we see urgent action by the Government on this public register, which the noble Lords, Lord Faulks and Lord Hodgson, have so eloquently described as necessary to expose and, presumably, drive out the abuse of property and government contracts in the UK by those who see them as excellent mechanisms for laundering money obtained through corruption or other nefarious activity.

I hope the Government will understand that they need to defend public registers—I was somewhat stunned that the Minister did not do so in his response—and demonstrate to all of us that this is the mechanism that can deal with this problem. I hope that other locations will understand that and will take up the baton, but one of the best ways to make sure that happens is to demonstrate the change it can deliver for us in the UK.

I will be very brief. I congratulate the noble Lord, Lord Faulks, on pushing this issue. I do not think he owes anyone an apology for doing so because it is vital that we tackle this. This amendment is about the commitment that was made but has been delayed for a long time. My concern, and that of the noble Lord, Lord Hodgson, is that the wording of the amendment potentially takes us to 2022 before we see something. I think all noble Lords will be behind the noble Lord, Lord Faulks, in putting pressure on the Government to ensure that they properly meet their commitment.

Still on public registers, I agree with the noble Baroness, Lady Kramer. I am glad to see that the noble Baroness, Lady Stern, is in her place. She made a powerful case for public registers in overseas territories. The front page of today’s Guardian has an article about Appleby and FBME Bank, which was banned from the US financial system. Appleby is a Cayman Islands-registered holding company. Anyone who reads that article will know that this issue will not go away and we will have to come back to it.

My Lords, I am grateful to noble Lords. I reiterate my thanks to my noble friends Lord Faulks and Lord Hodgson for pressing the Government and holding us to account in this respect and ensuring that we move forward. I am also grateful to my noble friend Lord Naseby, who sought clarification. I have looked carefully at his amendment and I think what the Government have tabled and his amendment have the same intent. However, in the interests of ensuring thoroughness and completeness, I have asked officials to look again to make sure that the intent behind his amendment is achieved.

The Government have committed to the new Bill establishing the register. It will be primary legislation and will pass through your Lordships’ House, so I am sure there will be further discussions and plenty of opportunity to ensure that all issues, particularly those raised by my noble friend, are addressed. I assure him that we feel the intent behind his amendment has been achieved. I will, however, look at this again, and if there is a need to do anything further, we will seek to do that in the other place.

My noble friend Lord Hodgson asked me when Royal Assent might be granted. It is not within my gift as the Minister at the Dispatch Box to confirm that, but we are expecting Royal Assent at the end of this Session. On accountability, I reassure my noble friend that through the additional ministerial Statement laid today, I have sought to provide as much detail as I can at this juncture in the parliamentary timetable. However, as I said to him in our bilateral meetings—I believe this was communicated to him subsequently in other meetings we had—we have worked back, and as the Written Ministerial Statement again confirms, we are looking to have the register operational by 2021. I am sure there will be other opportunities. As for the Government laying a report, I confirm that the 12- month clock—the countdown—will commence as soon as Her Majesty has signed off on the Bill. However, it would be beyond the scope of my responsibilities to give an absolute, cast-iron guarantee as to when Royal Assent will be. I am sure my noble friend appreciates and respects that we have to follow due process. However, the Government are committed to the register being operational in 2021. From the points made by other noble Lords, I appreciate that wherever one is sitting in your Lordships’ House, there is no disagreement on the need to move forward on this and to do so as rapidly as we can.

My noble friend raised another issue, about procurement. Again, to reassure him on that, I draw his attention to the Written Ministerial Statement laid today by my noble friend Lord Henley, which says:

“I am today confirming to Parliament the Government’s timetable for implementation of its policy to achieve greater transparency around foreign entities that own or buy property in the UK or participate in UK Government procurement”.

As the Bill is drafted and pre-legislative scrutiny takes place on it—if that is the process which is agreed—that will allow further discussion to address the very points my noble friend raises in that primary piece of legislation.

The point about local government is well made. As someone who served 10 years in local government, I am acutely aware of how procurement works. It will reflect the very policies adopted by the UK Government. With those reassurances, I hope my noble friend will be minded to withdraw his amendment.

My Lords, having listened to my noble friend, I am most grateful to him for the patience he has shown and the care he has taken over the Bill and this amendment. In light of the commitment he has made—as he says, if necessary, some amendment could be made in another place—it is my pleasure to withdraw the amendment.

Amendment 4 (to Amendment 3) withdrawn.

Amendment 3 agreed.

Clause 54: Commencement

Amendment 5

Moved by

5: Clause 54, page 41, line 19, at end insert—

“( ) section (Reports on progress towards register of beneficial owners of overseas entities);”

Amendment 5 agreed.

Schedule 2: Money laundering and terrorist financing etc

Amendments 6 to 8

Moved by

6: Schedule 2, page 50, line 6, leave out sub-paragraph (1) and insert—

“(1) Require—(a) the Secretary of State or the Treasury, or both of them acting jointly,(b) supervisory authorities (within the meaning given by paragraph 23), and(c) such persons carrying on relevant business (within the meaning given by that paragraph) as are prescribed for the purposes of this paragraph,to identify and assess risks relating to money laundering, terrorist financing or other threats to the integrity of the international financial system.”

7: Schedule 2, page 50, line 11, leave out paragraph 3 and insert—

“3_ Require any person carrying on relevant business who is of a description prescribed for the purposes of this paragraph (“a relevant person”) to have policies, controls and procedures which—(a) are policies, controls and procedures for mitigating and managing risks relating to money laundering, terrorist financing or other threats to the integrity of the international financial system,(b) are of prescribed kinds, and(c) are appropriate having regard to the size and nature of the business that the person carries on.”

8: Schedule 2, page 53, line 41, at end insert—

““relevant business” means business of a kind which entails risks relating to money laundering, terrorist financing or other threats to the integrity of the financial system;”

Amendments 6 to 8 agreed.

A privilege amendment was made.


Moved by

My Lords, I stand before your Lordships’ House to reiterate my thanks to all noble Lords who have put a lot of time and energy into making sure that we reached the position that we have today. I would like to take this opportunity to say a few words about the progress achieved in recent months. As many noble Lords acknowledged at Second Reading, this has been the first Bill related to the UK leaving the EU to pass through this House. It has rightly, and I fully respect this, been subject to close scrutiny.

I hope noble Lords recognise the need for legislation. Indeed, I acknowledge that the noble and learned Lord, Lord Judge, notwithstanding our differences and the bridges that have been built in reaching agreement, has consistently recognised the necessity for such a Bill because it allows us to ensure that we can update and lift sanctions, as well as address—here I am grateful to the noble Baroness, Lady Bowles—the issue of an anti-money laundering framework after we leave the EU. I said at Second Reading, and indeed at all stages as progress was made on the Bill, that getting this right will enable the UK to continue to work closely with international partners—yes, our European partners as well—to ensure that we uphold our legal obligations and promote and protect our shared interests and values.

To offer the House some perspective, so far we have dealt with a total of 214 amendments. I am told that we have spent 24 hours and 24 minutes on the Bill in your Lordships’ House—someone has clearly been timing us down to the minute. Noble Lords have listened carefully to the arguments put forward on all sides, and I hope that is reflective of the Government’s attitude. In my opinion, that demonstrates your Lordships’ House at its best. I am confident that the interventions by noble Lords have led to an improved piece of legislation. I am also satisfied that we have been able to agree a range of government amendments, and I am delighted that in several cases these have been supported by noble Lords from across the House, reflecting what I believe is a convergence of views on a number of issues, such as the policy framework for anti-money laundering measures that we have debated today.

I and my officials have engaged closely with noble Lords, both ahead of the Bill and during its passage. In this regard, I put on record my particular thanks to the Opposition Benches, particularly the noble Lord, Lord Collins. We have joked with our respective partners that we have probably seen more of each other than we have of our other halves. Perhaps, with the moving of the Bill, we will be able to provide them with some adequate time. That said, I very much welcome the constructive nature with which the noble Lord has engaged in this, well supported in this regard by the noble Lord, Lord Lennie, with the constructive proposals that he has put forward, and which are now reflected in the Bill, to make absolutely sure that these powers are exercised by future Governments in a spirit of transparency and accountability.

Equally, I am pleased to acknowledge the support, constructive dialogue and exchanges that I have had with the noble Baroness, Lady Northover, for which I am grateful. As I said earlier, I am also grateful to her colleagues, the noble Baronesses, Lady Bowles and Lady Kramer, who have engaged constructively both directly with myself and with real impact, as the noble Baroness acknowledged, on the anti-money laundering part of the Bill.

On my own side—this shows that we are tested from all sides of your Lordships’ House—as I look over my shoulder, I see three noble Lords who have engaged on this, particularly my noble friend Lord Faulks, who has really pushed on the important issue of beneficial ownership, which we have just discussed. I use the term quite directly: he has ensured that the Government’s feet have been held to the fire on that issue. I also thank my noble friend Lady Goldie, who has supported me from the Government Front Bench throughout the passage of the Bill. I am also grateful to other Whips who have supported in this regard.

It would be remiss of me not to thank the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, who, I am told, tabled a total of 50 amendments between them, with a particular focus on strengthening procedural safeguards. I acknowledge and recognise their great expertise and thank them for their collaborative and collegiate approach, which has done so much to improve the Bill.

I would like to thank my Bill team. We have heard from various noble Lords that my team has devoted a huge amount of time and energy to making this work. I thank in particular Louise Williams, the Bill manager, who has also been planning her wedding while working on the Bill; Adam Morley; Jennifer Budniak; and the Bill lawyers, particularly Luke Barfoot and Michael Atkins. There has been a team of more than 50 officials from across government who have supported them, and it has been a truly cross-Whitehall effort. This Bill has played a large part in my life over the past three months but it is only part of my portfolio. The Bill team has been working on it only since last April, but they will continue in their role as a team to shepherd the Bill through the other place. As I move on to other challenges I believe that, with our team, the Bill remains in good hands.

My Lords, when the Minister introduced the Bill at Second Reading, he described it as “technical”. It was, of course, about issues on which we all agree: enabling us to have a sanctions regime and to counter money laundering. No sooner were those words out of his mouth than he and all of us registered how important the Bill was in constitutional terms. It is indeed a forerunner of the massive legislation coming our way in the European Union (Withdrawal) Bill, and much else besides.

I therefore thank the Minister for his mental and political flexibility in realising the significance of the way in which this Bill has been drawn up, but above all for being so ready to engage. I thank him today for his latest statement that he will address the inconsistencies on criminal offences immediately in the Commons. My thanks, too, to the Bill team for its equal readiness to engage with us, even responding to emails on Sundays—I think that was Jonny and Louise—when it was clearly beyond the call of duty.

Issues in the Bill included the usual kind of areas where we sought improvements. We failed to take forward the amendment tabled by the noble Baroness, Lady Stern, but I am sure we will return to that. In other areas we have made progress, either in the Bill or through promises that the Minister made in regard to actions that the Government will take; for example, in relation to NGOs working in fragile states and those who may or may not bank them.

However, of most importance were the constitutional issues. Here we are absolutely indebted to the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, for the clarity of their thinking and their determined engagement. I also think that we owe a huge debt to my noble friends Lady Bowles and Lady Kramer—I thank the Minister for that acknowledgement—for spotting quite how much needed to be addressed on the anti-money laundering side of Bill, and setting about reconstructing it. The best result is indeed when the Government bring forward amendments in response to such concerns.

I am extremely grateful to those in my group who have engaged on this Bill. I can hardly describe myself as leading them—they are far too experienced and knowledgeable to need leading. My special thanks go to my noble friends Lord McNally and Lady Sheehan as well as to my noble friends Lady Kramer and Lady Bowles for the extraordinary amount of work they put in. I also thank the noble Lord, Lord Collins, who has been his usual wonderful self throughout this Bill, and his colleagues, the noble and learned Lord, Lord Davidson, and the noble Lord, Lord Lennie. The Bill signals much beyond what it aims to cover, and we have worked collectively around the House, including with the Government. I thank the Minister for ensuring that that work was in the end so productive. He is now temporarily liberated from the Bill—the Bill team, of course, is not—until it returns to us in due course, hopefully in a very sound fashion.

My Lords, I add my thanks to the Minister and the Bill team for what the Minister accurately described as the collaborative co-engagement on the Bill. It has been quite remarkable and exceptional, and I am very grateful to him. My only regret is that, personally, I prefer a good argument—it may be my professional training—but I realise we are not here for my personal gratification. I very much look forward—perhaps the Minister may communicate this to his colleagues on the Front Bench—to the same collaborative engagement, co-operation and desire to accommodate concerns when we consider any other Bill that may come before this House in the weeks ahead.

My Lords, your Lordships may need reminding that, before this excellent Bill was introduced, between April and June last year, some 30,000 people and companies were asked for their views. Just 34 responded with any views in writing. Since its introduction, however, the Bill has received the line-by-line scrutiny expected of your Lordships’ House in Committee. Even I had a go, once or twice.

No one could fairly say that it has not been scrutinised thoroughly before it journeys to another place. There certainly have been some tussles but, below the surface, it has received broad all-party support. This is welcome from the Opposition Benches and Cross Benches, of course—just as some of us, a few years back, in opposition, spoke in equally strong support of the eventual Bribery Act 2010, when ably introduced to Parliament by the then Justice Secretary Jack Straw, whose contribution certainly should not be forgotten. I believe the Bribery Act is still the toughest anti-corruption legislation anywhere in the world, raising the bar far above the earlier US Foreign Corrupt Practices Act. Similarly, if passed by another place and then passed by us again, the Sanctions and Anti-Money Laundering Bill will become its absolute twin, as it were, giving us again another globally tough measure to match the Bribery Act, and marching in step with it.

We must remember that bribery, sanctions breaking and money laundering are very often in practice very closely intertwined. One key test of the legislation before your Lordships’ House is its ability to go beyond the big or top players, right down through the supply chains of corruption via intermediaries, and then down through them to minor actors and mere runners—indeed, that cascade of responsibility referred to so aptly by the noble Baroness, Lady Bowles of Berkhamsted. How right she was. The Bill as amended by your Lordships does just that, as globally we work against terrorism and in favour of maintaining and strengthening the integrity of our financial system, as we have since 1989, when the UK as a key player was one of the G7, which first set up the Financial Action Task Force.

My Lords, I add my thanks to everyone involved in the Bill. I start by thanking my own team, my noble friend Lord Lennie and my noble and learned friend Lord Davidson. These people do not often get thanked publicly, but I thank also the team in the Labour opposition office, including Catherine Johnson, who did a particularly good job in helping me to be well prepared for my numerous meetings with the Minister.

I also thank the Lib Dem Benches, particularly the noble Baronesses, Lady Northover, Lady Kramer and Lady Bowles. We, again, had numerous meetings. One thing that the Minister omitted to mention—he mentioned all the time that we spent in Committee, in the Chamber, scrutinising the Bill—was that we spent substantial time in meetings outside the Chamber. In fact, the Minister got quite anxious at one point when I turned up to meetings with the noble Lord, Lord Faulks. I am sure he felt that I was in the wrong meeting at the time. We had very good cross-party and cross-Bench support, and I add my thanks to the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Judge. We now have a better Bill. It is not necessarily a good Bill in all respects, but it is a much better one than what was originally delivered.

I also pay tribute and thanks to the Bill team, particularly Louise Williams, Adam Morley and Jennifer Budniak, and of course the lawyers. I think I had the most pleasure dealing with the lawyers, and I hope Luke Barfoot and Michael Atkins enjoyed those exchanges as well. They did a terrific job; they are great public servants and, again, they deserve our thanks and gratitude. Obviously, as the noble Baroness, Lady Northover, said, their work will continue.

One thing that surprised me was that at one of the lengthy meetings I had with the Minister, the BBC fly-on-the-wall cameras were there. I hope to God it is better than the programme it did on the House of Lords. I certainly hope I come across much better than some noble Lords did, but let us wait and see—I do not know when it will come out.

My final thanks, of course, go to the Minister. He said at the beginning of this Bill, “I am in listening mode” and I know we joked about that, but honestly, he has listened and his responses prove how much he listened. I am very grateful to him for dealing with us so well on this Bill.

Bill passed and sent to the Commons.