Sanctions and Anti-Money Laundering Bill [HL]

Debate between Baroness Northover and Baroness Sheehan

Committee: 4th sitting (Hansard): House of Lords
Tuesday 12th December 2017 Lords Chamber

[Baroness Northover (LD)]

My Lords, I support the noble Lord, Lord Collins. I wish to speak also to Amendment 75A, which stands in my name and that of my noble friend Lady Sheehan.

We clearly have an international obligation to agree UN sanctions, which, of course, we play a part in agreeing at the UN. It is when we come to sanctions that do not fall under that heading that we must be especially careful about what we leave simply in the hands of Ministers to decide. The noble Lord, Lord Collins, has made that case. Our Amendment 75A would add Clause 16 to those which must be covered by the affirmative procedure. That surely should be the least that should happen. The noble Lord will have heard the debate on Clause 16. The noble and learned Lord, Lord Judge, described this clause as “lamentable”. It gives the power to a single Minister, by regulation, to create criminal offences for conduct that contravenes laws made by secondary legislation. I am sure that we will come back to this on Report. Our Amendment 75A would place a small check on this power, and I therefore commend it to the Minister.

[Baroness Sheehan (LD)]

My Lords, I wish to speak to Amendment 75A, which is also in my name. I agree with all that the noble Lord, Lord Collins, said. The Bill allows such sweeping powers to future Ministers that we on this side of the House seek to put in place safeguards which will enable Parliament greater scrutiny over the regulations made under Clause 16—namely, that they are made by the affirmative procedure.

Clause 16 is the enforcement clause which includes not only the creation of criminal offences punishable by up to 10 years in prison but makes provision for matters in relation to those offences, including defences and evidentiary matters. The Constitution Select Committee has recommended that Clause 16 should not remain part of the Bill, stating its opinion that such regulation-making powers are constitutionally unacceptable. Indeed, we heard arguments to that effect from the noble and learned Lord, Lord Judge, and my noble friend Lady Bowles on the first day of Committee. I agree with the noble and learned Lord, Lord Judge, that this clause should not disfigure our statute book, as he said. Therefore, this amendment is purely an attempt to create a safety net should Clause 16 remain part of the Bill.

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[Baroness Northover]

My Lords, Amendment 76 is in my name and that of my noble friend Lady Sheehan. It states that where a statutory instrument that contains regulations under Section 1 repeals, revokes or amends an Act of the Scottish Parliament, a Measure or Act of the National Assembly for Wales, or Northern Ireland legislation, that instrument must have received the consent of the Scottish Parliament, the National Assembly for Wales or the Northern Irish Assembly. I am sure that the Minister will argue that the Sewel convention provides that the Parliament of the United Kingdom,

“would not normally legislate with regard to devolved matters without the consent of the Scottish Parliament”,—[Official Report, 21/7/1998; col. 791.]

but that it does not apply to UK subordinate legislation.

Nevertheless, the new regulation-making powers in the Bill are, as we have heard throughout the Committee stage, very significant. The regulations detailed in Clause 45(5) will enable the Government to amend any Act of the Scottish Parliament and any legislation passed by the Assemblies in Wales and Northern Ireland. I am grateful to the Law Society of Scotland for flagging this up. Once again, this is a wide-ranging power that requires further justification and checks, which is why we have put this amendment forward. When the Minister replies, it would be helpful if he indicated which devolved legislation the Government would envisage amending under regulations made under Clause 1 and, for that matter and perhaps more importantly, which they would not. I beg to move.

[Baroness Sheehan]

My Lords, I support Amendment 76, to which my name is attached. It would amend Clause 45, which lays out the “Parliamentary procedure for regulations”. The amendment gives substance to the recommendation in the eighth report of the Constitution Select Committee which, at the end of paragraph 6, said:

“If it is the Government’s intention that it would, in practice, liaise with the devolved administrations prior to the exercise of this power, such a requirement could be written into the Bill”.


The Government have argued that this power reflects a reciprocity with that which enables Welsh or Scottish Ministers to amend Acts of Parliament. However, reciprocity can be said to operate only where one is comparing similar powers; this is not the case here. Welsh and Scottish legislation can authorise devolved Ministers to amend UK legislation only within devolved competence, whereas UK legislation can authorise UK Ministers to amend enactments of the devolved legislatures irrespective of devolved competence.

I believe this to be a common-sense amendment, one that seeks the consent of the devolved nations before amending any Act passed by the Scottish Parliament and any legislation passed by the Assemblies of Wales and Northern Ireland. Dare I say it, consultation with the devolved nations may save the Government from further embarrassments such as the fiasco with the DUP that we witnessed, open-mouthed, just last week.

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Baroness Northover and Baroness Sheehan

Committee: 1st sitting (Hansard): House of Lords
Tuesday 21st November 2017 Lords Chamber

[Baroness Northover]

I shall speak also to Amendments 3 and 4 in my name and the other amendments in the group. Amendment 2 once again addresses the wide and poorly defined powers in the Bill. The amendment, which is also in the name of my noble friend Lady Sheehan, would delete Clause 1(2)(d). It is to seek clarification from the Minister how a purpose which includes to,

“further a foreign policy objective of the government of the United Kingdom”,

might be applied. This is something to which the noble Lord, Lord Pannick, and my noble friend Lord Thomas just referred. Remember that we need to read the Bill in the light of it being, as the noble and learned Lord, Lord Judge, said, a bulk buy of regulations.

For example, the Government of the United Kingdom have had a number of foreign policy objectives with which one would not want disagreement to result in sanctions. Thus, for example, might someone risk being sanctioned because they opposed the invasion of Iraq or objected to selling arms to some dubious regime? That might be ridiculed as of course not intended here, but we need to probe the unintended consequences, given the wide scope of the Bill. Given that we know that the Human Rights Act cannot be counted on for protection, as this Government have at times wished to repeal it, and that members of the party opposite have also made it clear that they do not wish to be bound by the European Convention on Human Rights, despite the UK playing a leading role in drafting it, what protection can the Minister offer?

In addressing Amendments 2 and 4 in my name, and that of my noble friend Lady Sheehan, I pay tribute to the work of Amnesty International in briefing us, and for its work around the world. This returns us to seeking to improve the Bill, as we normally do in this House—and the concern here is to include human rights breaches in the definition of purpose in this clause and ensure that the Government have the means to prevent the violation of sanctions regulations. I note that the noble Lord, Lord Collins, has further proposals in this regard. I make it clear that we also feel that they would strengthen the Bill—for example, the amendments that would ensure that sanctions were in compliance with international humanitarian and human rights law and would provide for a humanitarian impact assessment before sanctions were introduced so that their impact can be properly gauged. I am well aware, as a former DfID Minister, of the impact on NGOs working in Syria, for example, in the restrictions on them due to the sanctions regime that was in place.

I look forward to hearing what the Minister says, and I beg to move.

[Baroness Sheehan]

My Lords, I rise to speak to Amendment 3 which, as my noble friend Lady Northover said, adds to the list of purposes for making regulations under Clause 1 to include human rights breaches, as well as prevention of acts contravening the international law on armed conflict and prevention of internal repression in any country. That those purposes are not mentioned is a grave omission and cannot be encompassed in subsection (2)(d), which says that the purpose would,

“further a foreign policy objective of the government of the United Kingdom”.

To give our amendments the force that we as a civilised country intend, they must be spelled out in the Bill. That is the basic thrust of my argument as to why I hope that the Minister will give serious consideration to Amendment 3.

However, on a more technical note, can the Minister give consideration to the fact that there is an unexplained gap between this Bill and the Export Control Act 2002? That Act has a specific section called “Relevant Consequences”, which sets the conditions whereby the Government can act. Clause 1 of the Bill and the relevant consequences of the 2002 Act are aligned with the exception of human rights and international humanitarian law provisions, which are in the 2002 Act but do not feature in the Bill before us. That is a serious omission; trade sanctions and, specifically, arms embargos, are largely triggered because of the humanitarian concerns over the provision of weapons in these cases, and the very serious and grave violations of international humanitarian law that arise as a consequence. The amendments would give powers to the Government to impose sanctions on these grounds and ensure direct consistency on the two Acts when dealing with issues around trade and arms embargos.

Amendment 4, also in my name, would add the provision,

“prevent the violation of sanctions regulations made under this Act”.

That addition may seem unnecessary, but it would give consistency with the corresponding sanctions mechanisms agreed at UN and EU level and would require the Government to take action to prevent breaches of sanctions.

I have another passing point. On the front page of the House of Lords Library briefing to the Bill, a sentence reads:

“The Government agrees that there is a mutual interest in continued collaboration with European partners in this area, and has suggested that the UK and EU could cooperate on sanctions listings and align policy in future where appropriate”.


I have not spotted many government concessions in the Bill to demonstrate the importance of aligning sanctions regimes with those of international partners, so this small amendment would go a little way to meeting the Government’s own stated position of working collaboratively going forward, should Brexit take place.

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[Baroness Northover]

My Lords, I shall speak to Amendment 9, which stands in my name and that of my noble friend Lady Sheehan, and I support the amendment in the names of the noble Lords, Lord Collins and Lord Lennie.

The Minister made clear at Second Reading and in our discussions—I welcome this—that he is open to the possibility of trying to ensure that NGOs working in humanitarian disaster areas and very challenging situations have greater assistance in doing their work when sanctions get in their way. As I just mentioned, I recall from my work as a DfID Minister that sanctions could have a significant impact on the work of NGOs when they sought to assist in Syria.

As the noble Lord, Lord, Collins, pointed out, it is essential that we review current and future sanctions so that we can identify any disproportionate impacts. I know that was the case in Syria, where there were different arrangements for our NGOs compared with those for American NGOs, for example. We need to be able to assess the impact of sanctions and make adjustments accordingly. Therefore, our Amendment 9 speaks of consultation with stakeholders, who are obviously in a very good position to inform the Government of any unintended consequences, so that those consequences can be addressed.

Our amendment is a probing one. As I said, the Minister has said that he is open to ensuring that licences for NGOs are more fit for purpose than has been the case in the past. We are seeking to move the Minister further along that line so that that is not just a possibility but is put in a more concrete form and more specifically, so that we can see the changes that the noble Lord, Lord Collins, and I have outlined.

[Baroness Sheehan]

My Lords, Amendment 9 is broad enough to cover a range of activities—not just humanitarian assistance but peacebuilding, reconstruction and development assistance. It would also enable a range of stakeholders—for example, banks, businesses that supply goods or services in sanctioned countries and other experts—to be included in any discussions.

Consultation is very important as it will reduce unintended consequences for diplomats, aid workers and others. For example, a British diplomat was prevented from getting a mortgage because his bank found out that he lived in Sudan. Sanctions that are badly applied or inappropriate can give banks and international companies a reason to be risk-averse, reducing the availability of services to poor and vulnerable people or countries. For example, in 2011 Standard Chartered Bank received a large fine for breaching Iranian sanctions. That led to all banks becoming more risk-averse to the point where they now overimplement the sanction where the value of the market is not worth the risk. Therefore, even if the activity they are carrying out is excluded, they will often choose to avoid the market altogether. Another example is Somalia, where Barclays closed the accounts of small money transfer companies used by the Somali diaspora to send money home. We all know how important these remittances are these days. Perhaps with consultation those problems could be avoided.

It is very important that any potential impact of a new sanctions regime is properly understood and documented. As well as the other factors that I have mentioned, this would also reduce the lag time between sanctions coming into effect and licences or exemptions being provided to mitigate their impact.

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[Baroness Northover]

My Lords, I found reading this Bill enormously instructive. I am no lawyer, but I nevertheless found myself wondering at many points about the possible unintended consequences of what was in it. Clause 8, along with various other clauses, seemed to me rather full of such potential unintended consequences, so I want to know from the Minister what protections are being put around the mass of regulations to which the noble and learned Lord, Lord Judge, referred in the first group of amendments. Here the Bill specifies,

“persons designated under any power contained in the regulations”,

which we know are very widely drawn. That causes me concern. It goes on to talk about,

“any organisation and any association or combination of persons”.

It struck me as I read this provision that it was enormously widely drawn. If we are seeking to check the abuse of power, how does this wide definition fit in?

I also support the amendments of the noble Lords, Lord Collins and Lord Lennie, in this group. They have rightly picked up on the point that regulation “must” make provision in certain areas, as opposed to simply “may”, which again is very widely drawn. I am seeking from the Minister an explanation of what protections there are in relation to Clause 8.

[Baroness Sheehan]

I have only a short sentence to say on this. Clause 8, on “Designated persons” is so widely drawn that it occurs to me that in a prescribed country anyone who is not a designated person will doubtless be a refugee.