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General Committees

Debated on Monday 5 December 2022

Delegated Legislation Committee


The Committee consisted of the following Members:

Chair: Stewart Hosie

Abrahams, Debbie (Oldham East and Saddleworth) (Lab)

† Aldous, Peter (Waveney) (Con)

† Bonnar, Steven (Coatbridge, Chryston and Bellshill) (SNP)

† Brereton, Jack (Stoke-on-Trent South) (Con)

† Carden, Dan (Liverpool, Walton) (Lab)

† Crouch, Tracey (Chatham and Aylesford) (Con)

† Gardiner, Barry (Brent North) (Lab)

† Glindon, Mary (North Tyneside) (Lab)

† Harrison, Trudy (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)

† Holmes, Paul (Eastleigh) (Con)

† Jones, Fay (Brecon and Radnorshire) (Con)

† Mayhew, Jerome (Broadland) (Con)

† Mullan, Dr Kieran (Crewe and Nantwich) (Con)

† Tracey, Craig (North Warwickshire) (Con)

Twigg, Derek (Halton) (Lab)

† Vara, Shailesh (North West Cambridgeshire) (Con)

† Zeichner, Daniel (Cambridge) (Lab)

Anna Kennedy O'Brien, Committee Clerk

† attended the Committee

First Delegated Legislation Committee

Monday 5 December 2022

[Stewart Hosie in the Chair]

Draft Animals and Animal Health, Feed and Food, Plants and Plant Health (Amendment) Regulations 2022

With this it will be convenient to consider the draft Trade in Animals and Related Products (Amendment and Legislative Functions) Regulations 2022.

It is a pleasure to serve under your chairmanship, Mr Hosie.

The first instrument makes technical amendments to various pieces of retained EU law and domestic legislation to ensure that they operate effectively in the following areas after the UK’s withdrawal from the EU: official controls and requirements on imports into and movements within Great Britain of animals, animal products, plants and plant products; the rules on animal welfare during transport; the rules on the marketing of plants and plant material; and the rules on the prevention, control and eradication of certain transmissible spongiform encephalopathies—TSEs for short—which is a group of fatal diseases that includes BSE.

The first instrument also addresses various other deficiencies in retained EU legislation and corrects errors in earlier instruments made under the European Union (Withdrawal) Act 2018. The changes clarify, for example, that the appropriate authority can create or amend rules on penalties for non-compliance with these regulations and relevant supported legislation with regards to the official controls regulation and plant health regulation.

The changes will streamline the process for a designated and appropriate authority to be the competent authority responsible for carrying out official controls and will replace the existing obligation for the appropriate authority to make secondary legislation to address biosecurity risks from imports of animals and animal products with a power to make secondary legislation. That will help to protect biodiversity by giving the Department for Environment, Food and Rural Affairs the flexibility to address biosecurity risks through means of event regulations.

The Plant Varieties and Seeds Act 1964 is amended to enable Ministers to make regulations via the negative resolution procedure to ensure domestic secondary legislation that captures the marketing of fruit, vegetables and ornamental plants for planting can be updated as required. That change will ensure that we are able to keep pace with changing requirements in this space. Corrective amendments make it clear to transporters, organisers and keepers of live animals that they must comply with the journey log requirements on protecting animal welfare in transport.

The second instrument makes modifications to the interpretation of 11 directives to ensure a continuing and fit-for-purpose import system for animals and animal products entering Great Britain and to ensure that the legislative regime is up to date, enforceable and easy to use. These modifications do not make policy changes. They are technical fixes to assist with the interpretation and application of the directives. This instrument also transfers the functions, including legislative powers from EU bodies to the appropriate authority and makes the necessary changes to relevant import enforcement legislation.

Both instruments apply across Great Britain. There are, however, some exceptions. In the first instrument, regulation 12 applies to England and Wales only, regulation 13 to Scotland only, and part 6 to England only. In the second instrument, part 1 applies across Great Britain, whereas in part 2, regulation 5 applies to England only. Regulation 6 applies to Scotland only, and part 3 applies to England and Scotland, with the Welsh Government having laid a mirroring instrument that applies in Wales. Both instruments make a series of technical amendments to other pieces of legislation to ensure that they are fully operable.

In summary, the amendments in the instruments will ensure that official controls on imports of animals and animal products continue to be effective, that appropriate authorities have the relevant powers to make and implement necessary changes to imports legislation and that we have the legislative tools to safeguard our biosecurity. The devolved Administrations in Scotland and Wales have provided formal consent for these instruments. Movements from Northern Ireland or the Crown dependencies are considered internal movements and are not affected by the modifications and amendments in these instruments. For the reasons I have set out, I commend both instruments to the Committee.

It is a pleasure to serve with you in the Chair, Mr Hosie. We are discussing the draft Animals and Animal Health, Feed and Food, Plants and Plant Health (Amendment) Regulations 2022 and the draft Trade in Animals and Related Products (Amendment and Legislative Functions) Regulations 2022. Once again, we are fixing problems that we have encountered since the withdrawal process. I notice that when the matter was discussed in the other place a few minutes ago, the same point was made. We keep having to correct errors from the past. I was expecting to see the Minister’s colleague, the right hon. Member for Sherwood (Mark Spencer), but I am delighted to see her here today—not least because he gets cross when I raise points of criticism with him. I was going to please him by not opposing the instruments, but I was then going to disappoint him by saying that I have found others who have points of criticism, which I will come on to in a moment.

The draft Trade in Animals and Related Products (Amendment and Legislative Functions) Regulations 2022 state that the UK will continue to align itself with the directives and regulations dictating the rules on the importation of animals and animal products as of the date of the UK’s exit. Nothing much will change, which is fine, but, as I have noted before, the world did not stand still the day we left the EU. Rather inconveniently for us, the EU has since revoked many of those directives, replacing them with the EU’s Animal Health Law. We are told in the explanatory memorandum that the instrument

“preserves and maintains the policy and legislative regime as of exit day and does not try to align itself with the EU’s Animal Health Law.”

It seems that we now work to different rules but, of course, we continue to trade.

I ask the Minister what assessment has been made of the impact of any possible divergence now that our exports to the EU are dictated by the EU’s Animal Health Law, and whether that has distorted the level-playing field we hoped British farmers would have when they export to the EU? This is of immediate, practical importance, as I am sure the Minister will know, because the meat export sector has been up in arms in recent weeks, as the EU now requires veterinary attestation confirming animal health checks on sites before an export health certificate can be granted. Of course, we now need an EHC to export to the EU. The Department for Environment, Food and Rural Affairs has explained that this is to meet the requirements under the EU’s animal health regulations, which stipulate that farms wishing to import into the EU must have had regular animal health visits by a veterinarian. That works for people on accreditation schemes, but many others have had to provide self-declarations to provide that EHC. This new situation creates additional costs and lots more red tape and could result in meat exports becoming non-compliant if there is not enough time for hard-pressed vets to undertake the checks required.

As I understand it, after the alarm was raised, DEFRA kicked the can down the road for another year, but the same problem will emerge on 13 December next year if new digital systems are not in place in time. In relation to this statutory instrument, the point is that the SI solves a legal issue by keeping things as they were, but given that the world has changed, it does not resolve the practical issue facing farmers nor the political issue that we now face of having to make changes because a system is being altered in the EU over which we have no influence.

Moving on to the second SI, there is a legal issue to be flagged, because the eagle-eyed members of the Joint Committee on Statutory Instruments have found fault with the drafting of both these statutory instruments. It said:

“The Committee accordingly reports the instrument for defective drafting, by virtue of including inaccurate information in the footnote to regulation 9(5)(a), acknowledged by the Department.”

It goes on to cite further drafting errors, including—I am delving into realms that I am probably unqualified to comment on in terms of my legal knowledge—unregistered equidae and various other fine points of law touching on Lebanese potato ring rot. You will be glad to hear that I will not go into detail, Mr Hosie, but the Joint Committee is basically saying, “I’m afraid these have not been drafted correctly.” On the scale of sins committed by this Government, I am not quite sure where that sits but, to be fair, the Department has actually acknowledged mistakes. I guess it is the equivalent of almost getting a yellow card but just getting a ticking off.

This has happened twice now. The Minister is in danger of being benched for our next encounter. I hope the Department will do better with its drafting in future. I will not go any further tonight. There is a lot of detail in here. The serious point is that these are important issues to maintain our biosecurity. I hope we will not have to keep going back over past statutory instruments because of mistakes and drafting errors. I hope the Minister can address some of those points.

It is a pleasure to see you in the Chair, Mr Hosie. I thank the Minister for laying out the reasoning behind both SIs. I agree with much of what the hon. Member for Cambridge had to say, so I will keep my contribution short. As we have heard, a legislative consent motion was granted by the Scottish Government, and the measure has been agreed by the Rural Affairs, Islands and Natural Environment Committee sitting at Holyrood.

The EU has higher health and welfare standards than the United Kingdom. We in the SNP encourage the Government not to renege on any of those commitments, but to retain alignment with the EU’s Animal Health Law regulations. This is nothing more than another patch-up job due to Brexit legislation gaps and errors. Six years since the vote and two years into implementation, we are still here implementing these types of SIs to patch legislative errors and gaps as a result of Brexit.

The Retained EU Law (Revocation and Reform) Bill is set to repeal thousands more laws and ensure much more of our valuable parliamentary time is taken up patching up holes, just as we are doing here. Far too much time has been taken up with post-Brexit patches or fixes, because the Tory Government and their “make Brexit work” partners in the Labour party refuse to realise just how silly and futile all of this actually is.

I am grateful to hon. Members for their interest, but I have to disagree with the hon. Member for Coatbridge, Chryston and Bellshill, because I believe our standards of animal welfare are far superior to those that can be found across the EU. I am sure my Cumbrian farmers would agree with me on that.

First, I would like to reassure the hon. Member for Cambridge. I, too, do not want to come to the House to repair damage from mistakes that have been made in drafting. He will understand that we are under significant pressure at the moment, with the war in Ukraine, covid and policy pressures, but will he accept my assurance that we are working to remedy the situation so that this issue does not occur again?

As I have said, the regulations do not change the import requirements. They seek to review the import regime for live animals and general products. Significant changes in rules will be laid out in legislation. The instrument requires that any decision to apply, lift or change import conditions must be informed by appropriate assessment of risk, taking into account specified animal and public health criteria and other relevant matters. Requirements have been retained directly from EU law.

The first instrument makes amendments that are crucial to ensuring that legislation relating to official controls and requirements on imports and movements within Great Britain of animals, animal products, and plants and plant products, as well as the rules on animal welfare during transport, the rules on marketing of plants and planting material, and the prevention, control and eradication of the transmissible spongiform encephalopathies, operate effectively during the UK’s withdrawal from the EU.

The second instrument makes technical modifications. We discussed the impact on business. There is no significant impact on trading partners. This instrument does not change the import policy. It does not place any new burden on persons importing animals or products into Great Britain, as the animal and public health conditions to enter or transit Great Britain are not changing. We do not expect any impact on GB businesses. This instrument relates to the maintenance of existing regulatory standards. There are no policy changes. The modifications are of a technical nature only.

The instrument only provides rules for imports into Great Britain. It does not cover exports of live animals. The provisions for movements between EU member states have been omitted. Exports to the EU are excluded from the scope of this instrument. Regarding delays, it has always been accepted that leaving the single market and the customs union means that businesses do not need to deal with more customs processes. Getting ready for those processes can be challenging. We recognise that it has been an unprecedented time for business, and many businesses are rightly focused on getting back on their feet as part of the economic recovery after the pandemic, in addition to dealing with the cost of living crisis.

As a sovereign trading nation outside the EU, we have the freedom to make decisions in our national interest. Delaying the introduction of import controls will give traders time to focus on getting back on their feet as the economy opens up after the disruption caused by the pandemic and while navigating the economic impact of the energy crisis and Putin’s war in Ukraine. I would like to conclude by commending these regulations to the Committee.

Question put and agreed to.



That the Cttee has considered the draft Trade in Animals and Related Products (Amendment and Legislative Functions) Regulations 2022.—(Fay Jones.)

Committee rose.


The Committee consisted of the following Members:

Chair: Sir Gary Streeter

† Clarke-Smith, Brendan (Bassetlaw) (Con)

† Cowan, Ronnie (Inverclyde) (SNP)

† Crosbie, Virginia (Ynys Môn) (Con)

Cryer, John (Leyton and Wanstead) (Lab)

† Griffith, Andrew (Economic Secretary to the Treasury)

† Hamilton, Mrs Paulette (Birmingham, Erdington) (Lab)

† Johnson, Gareth (Dartford) (Con)

† Kruger, Danny (Devizes) (Con)

† Lewis, Dr Julian (New Forest East) (Con)

† Mangnall, Anthony (Totnes) (Con)

† Nichols, Charlotte (Warrington North) (Lab)

Osamor, Kate (Edmonton) (Lab/Co-op)

† Siddiq, Tulip (Hampstead and Kilburn) (Lab)

† Smith, Julian (Skipton and Ripon) (Con)

† Stephenson, Andrew (Lord Commissioner of His Majesty's Treasury)

† Swayne, Sir Desmond (New Forest West) (Con)

† Twist, Liz (Blaydon) (Lab)

Dominic Stockbridge, Committee Clerk

† attended the Committee

Second Delegated Legislation Committee

Monday 5 December 2022

[Sir Gary Streeter in the Chair]

Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 3) Regulations 2022

I beg to move,

That the Committee has considered the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 3) Regulations 2022 (S.I.2022, No. 1183).

It is a pleasure to serve under your chairmanship, Sir Gary. The Government recognise the threat that economic crime poses to the UK and to our international partners, and we are committed to combating money laundering and terrorist financing. Illicit finance causes significant social and economic costs through its links to serious and organised crime. It is also a threat to our national security, and it risks damaging our international reputation as a fair, open, rules-based economy.

That is why we have taken significant action to combat economic crime, including legislating for the economic crime (anti-money laundering) levy and passing the Economic Crime (Transparency and Enforcement) Act 2022. We are going further by developing a second iteration of the landmark economic crime plan and through the Economic Crime and Corporate Transparency Bill, which has now passed Committee stage in the House of Commons and which includes, among other things, significant reforms to strengthen the role of Companies House. We are also working closely with the private sector and our international partners to improve the investigation of economic crime, strengthen international standards on beneficial ownership transparency and crack down on illicit financial flows.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017—the money laundering regulations—support our overall efforts. As the UK’s core legislative framework for tackling money laundering and terrorist financing, they set out various measures that businesses must take to protect the UK from illicit financial flows. Those efforts are making a difference, and over the last five years we have confiscated over £1 billion in criminal assets.

Under the money laundering regulations, businesses are required to conduct enhanced checks on business relationships and transactions with high-risk third countries. Such countries are identified as having strategic deficiencies in their anti-money laundering and counter-terrorist financing regimes, which could pose a significant threat to the UK’s financial system.

This statutory instrument amends the money laundering regulations to update the UK’s list of high-risk third countries. It adds the Democratic Republic of the Congo, Mozambique and Tanzania to the list and removes Nicaragua and Pakistan. That is to mirror the lists published by the Financial Action Task Force—the global standard setter for anti-money laundering and counter-terrorist financing.

This is the sixth time that we have updated the UK list to respond to the evolving risks from third countries. This update ensures that the UK remains at the forefront of global standards on anti-money laundering and counter-terrorist financing. The UK was a founder member of FATF, and we continue to work closely and align with international partners such as the G7 to drive improvements in anti-money laundering and counter-terrorist financing systems globally.

The high-risk third country list is one of many mechanisms the Government have to enable them to clamp down on illicit financial flows from overseas threats. We will continue to use other available mechanisms to respond to wider threats from other jurisdictions, including by applying financial sanctions as necessary.

These amending regulations will enable the money laundering regulations to continue to work as effectively as possible to protect the UK financial system. Therefore, I hope colleagues will join me in supporting them.

It is a pleasure to serve with you in the Chair, Sir Gary. As the Minister will know, the Opposition are committed to supporting the global effort to combat money laundering and the financing of terrorism, and we will support the regulations today. However, I want to raise a couple of concerns about the UK’s compliance with the Financial Action Task Force’s high risk list.

As the Minister said, the regulations will update the UK’s list of high-risk countries, and he outlined those that will be added and those that will be taken off to reflect the changes made by the Financial Action Task Force in October. However, the Economic Crime and Corporate Transparency Bill, which is currently going through Parliament, would remove the need for parliamentary approval to update the high risk list. Does the Minster believe that it is appropriate to cut out parliamentary scrutiny in that way? I would appreciate an answer if he thinks that that is the right thing to do.

Does the Minister also believe that the UK Government should make its own independent assessment of countries that pose a high risk of money laundering, rather than just mirror the Financial Action Task Force? It is my understanding that there is no legal or practical reason for the UK not to diverge from the Financial Action Task Force and, for example, to add countries we deem to belong on our high risk list.

The Minister will know the fantastic work my right hon. Friend the Member for Barking (Dame Margaret Hodge) has done to highlight the dangers of illicit finance. She has proposed creating an additional kleptocurrency list—sorry, kleptocracy list; as the Minister will know, I have cryptocurrency on my mind—alongside the Financial Action Task Force list. That would enable the UK to designate on its own list countries that we think pose a significant threat.

The anti-corruption organisation Spotlight on Corruption has also warned that, despite Pakistan being one of five countries highlighted in the UK’s 2020 national risk assessment as posing a high risk of money laundering, it is now being removed from the list of high-risk countries. Will the Minister elaborate on whether he shares Spotlight on Corruption’s concerns regarding Pakistan? Might there be a case for not simply mirroring the Financial Action Task Force list? Should we instead have our own list so that we can add countries we deem dangerous or corrupt?

As I said, we will support the regulations, but I just want to hear a bit more about the Minister’s thinking as we pass this legislation through Parliament.

I thank the hon. Member for Hampstead and Kilburn for her support and for that of the Labour party. I will do my best to respond to her points.

The hon. Lady is right that derogation from the FATF list is a possibility. Her interventions on me are often about how we should closely align with international standards, and it is the Government’s position that there is merit in working closely with FATF. The UK Government was a founder member, and we believe that the best way to tackle this issue is through co-ordinated international action. My mind is not closed to the possibility of derogation; it would be a change of policy, and I would be right for us to look at the facts in a particular case.

The hon. Lady talked about a potential crypto-kleptocracy; it was either cryptocurrency or kleptocrats, or perhaps both—kleptocrats with cryptocurrency. She will be aware of the significant work done, for example, by the Office of Financial Sanctions Implementation, particularly at the moment—I pay tribute to its work in the Russia-Ukraine context, where the UK has been one of the leading nations in taking action. Again, I do not think that the hon. Lady and I are in opposition. We should continue to look at the facts as they develop, and I will ensure that my officials engage with the issue to make sure we are clear sighted on any challenges.

Although the list is somewhat binary, there will of course be ongoing monitoring. FATF’s removal of Nicaragua and Pakistan does not bring to an end any monitoring of those countries, which are covered by a much broader set of arrangements. We always remind the businesses, banks and financial intermediaries involved that the list is just the starting point and that they have an ongoing duty of care to prevent money laundering and illicit financing. Those countries will therefore continue to be monitored.

Finally—I hope I have done reasonable justice to the hon. Lady’s other questions—let me address the issue of parliamentary scrutiny, which we talked about when I last brought amending regulations to the House. Given that the policy is generally to be aligned with FATF, it is sensible to make the procedure more of an administrative one so that we do not take up too much of Parliament’s valuable scrutiny time, which is a finite commodity. However, it is important that the list is held up to scrutiny, and I would be happy to write to the hon. Lady and other hon. Members to ensure that, when these decisions are made, we do not default in some way to a purely administrative procedure and that Parliament gets the information it needs to discharge its rightful job of scrutinising such decisions.

Question put and agreed to.

Committee rose.