Economic Crime (Transparency and Enforcement) Bill

Baroness O'Loan Excerpts

2nd reading
Wednesday 9th March 2022 Lords Chamber

[Baroness O’Loan (CB)]

My Lords, it was a privilege yesterday to listen to the brave and compelling words of President Zelensky on the situation in Ukraine. We are at a pivotal moment in the history of this world and we stand again at an abyss. Brave people in Russia are trying to stand up against the invasion of Ukraine by their own leaders, but their efforts are being ruthlessly suppressed. We should pay tribute to those who go out on the streets of Russia to protest, knowing that there is no right of freedom of speech in that country and that their actions will inevitably attract sanctions.

President Zelensky asked that we do all we can to increase the sanctions against Russian kleptocrats and other criminals. The economic crime Bill is but one small measure that will allow that to happen; we must not escalate the conflict, but this measure should help a little. There is a widespread view that its effects need to be more immediate. I welcome the Bill, limited though it is, as so many noble Lords have observed.

I want to make one small point. Clause 48 creates a more robust power to impose monetary penalties by amending the Policing and Crime Act 2017 so that a person will be liable to sanction if a breach of a prohibited act or failure to comply with an obligation can be proved. Whether they had knowledge or reasonable cause to suspect that their actions were in breach of a sanction is irrelevant. If there has been a breach, fines, which can be very substantial, may follow. The clause enables greater flexibility in the decision-making process, permitting decisions to be made by other officials in the department rather than a Minister. It could be argued that the power in this section is so extensive that decisions should continue to have to be made by Ministers. At the very least, guidance should ensure that any official given such a power should be of an appropriately senior level.

Taken together, Clauses 48 and 46—the latter changes the costs regime following enforcement action—may give rise to questions about the Government’s assertion that the safeguards available in the legislation fully protect a person’s rights. There is an urgent need to prevent the kind of money-laundering activities to which the Bill is directed. Judges will have discretion as to the kind of costs orders that are made. It is important, though, that the procedures we adopt are capable of withstanding scrutiny and challenge.

Clause 46 amends the Proceeds of Crime Act 2002. Of course, that Act has many deficiencies, not least that the person subject to the inquiry and to the POCA proceedings sells the property identified, often at a price significantly lower than the normal market price. However, this is an amendment to the Proceeds of Crime Act relating to who bears the costs of proceedings, as other noble Lords have stated, associated with unexplained wealth orders, where a person who is not found guilty of any breach or any offence may have to pay very substantial costs, possibly greater than any fine, unless they can prove that the enforcement authority acted either unreasonably or, alternatively, dishonestly or improperly—whatever “improperly” may mean. Notwithstanding this, there are concerns that, given the complex and sensitive nature of such proceedings and the investigation that precedes them, it could prove profoundly difficult to meet this test of improper behaviour, dishonesty or unreasonableness.

I ask Her Majesty’s Government whether they can assure the House that these provisions fully protect a person’s rights not to find themselves with a very large costs bill resulting from an unfounded allegation or action, so that those with legitimate funds to invest in the UK will not be deterred from so doing. In saying this, I do not in any way detract from the condemnation of what is happening in Ukraine at present.

Russian Oil and Gas Imports

Baroness O'Loan Excerpts

Monday 7th March 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Lord makes a sensible point. Of course it is an international market. It is usually operated by private companies, and any shortages in Russia will feed through into the UK. It will not affect the price, but it will affect our energy security, which is why I used the fact that only 4% of our gas is Russian. Most of our supply comes from our resources in the North Sea or from Norway. Security of supply is not affected, but the noble Lord is right about international pricing.

[Baroness O'Loan (CB)]

Given that the increase in fuel prices for both domestic and commercial use has been very significant—the consequence of which is that the Government are taking hugely increased revenues from the taxes applicable to that fuel—do the Government have any plans to cap or reduce the level of tax charged on fuel in those circumstances, and to redistribute that money for the benefit not just of people at the extreme end of the poverty line but of those seeking to be involved commercially?

[Lord Callanan (Con)]

I will leave the setting of taxation policies to the Chancellor, but the noble Baroness makes a good point. Of course, we have already announced a record-breaking £9.1 billion package to alleviate some of the worst excesses of the current increases in fuel prices, but I do not want to mislead anyone: this will not solve all of the problem. This is a global crisis and we cannot insulate ourselves completely from international pricing.

Trade Bill

Baroness O'Loan Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Monday 7th December 2020 Lords Chamber

[Baroness Deech (CB) [V]]

My Lords, I am sorry that I was not able to vote for the previous amendment, although I am very much in support of this one, because I felt that there were ambiguities—not least because there are offenders against human rights very close to us, such as in Poland, Hungary and Greece.

This amendment is quite different. It is one of the most profound and important amendments to be discussed in your Lordships’ House for a long time. We have an obligation under the genocide convention to prevent and punish genocide and its perpetrators, but if we rely on the Security Council or the International Criminal Court, we are dodging our obligations. We know full well that China’s seat on the Security Council means that it would veto any such move against itself. What a terrible indictment of the international order today, especially the UN and its constituent bodies. Instead of living up to their original ideals of maintaining international peace and security, better living standards, friendly relations and social progress, action—or, more likely, inaction—by the UN has come to represent quite often the very opposite of those ideals: self-seeking and looking for a scapegoat, a cover for some of the most reprehensible Governments in the world.

This amendment possesses the advantage of bringing the UK into compliance with its obligations under the genocide convention. Several states have argued, like the UK, that it is for the international and judicial systems to make the determination of genocide. This argument is profoundly flawed, as it neglects the basic fact that it is the state that is the duty bearer under the genocide convention—hence the states that are parties to the genocide convention must act to ensure that the determination is made by a competent body and that decisive steps follow to fulfil the states’ obligations under the convention to prevent and punish. Moreover, to have the issue of genocide, or not, examined in our courts would be a good thing.

It will likely be argued that the amendment may jeopardise relationships with states accused of genocide in the UK. It should be emphasised that positive genocide judgments are exceptionally rare, owing to the extremely high evidentiary standard. A formal legal examination and determination of genocide in court, to which the trade signatories might make representations, should not be any more diplomatically upsetting than, for example, the UK making complaints at the United Nations against nations such as China for their alleged human rights abuses. The amendment—if passed, as I hope it will be—will in time become a matter of diplomatic pride, sending a strong signal about the values of the UK as a leader in global human rights.

Owing to the rarity of genocide judgments, very few countries would fall within the purview of these provisions. It is difficult to envisage, therefore, that the Government’s ability to trade will be significantly affected. Generally speaking, Governments tend to seek to strike trade deals with nations with which they share common values. The UK does not currently have a trade deal with a country credibly accused of genocide, I believe, and one is not in prospect.

As it happens, we are unlikely to achieve or even want a trade agreement with China. The experience of Canada shows why. Prime Minister Justin Trudeau had been expected to come away with an agreement to formally start trade talks, but he insisted that any talks include gender and labour rights and environmental standards. He also raised human rights and China’s use of the death penalty. Basically, he was shown the door and was told no—that there would be no negotiation of a free trade agreement.

Likewise Australia, which, along with many other countries, has been a vocal critic of China’s treatment of the Uighurs in Xinjiang, its suppression of democracy in Hong Kong, and its military activities in the South China Sea. The anti-climax came in April when the Australian Prime Minister took the lead in calling for a thorough investigation into the source of the coronavirus. That incensed China. Since then, the deterioration of the China/Australia relationship has been swift. China is barring Australian goods and putting punitive tariffs on them.

As for the attempted EU-China comprehensive agreement on investment, it is only to be expected that the EU will put finance ahead of human rights, and even the mildest rebuke from the EU about human rights in China elicits a response from China that it should not be meddling in China’s internal affairs—that the Chinese people will not accept an instructor on human rights and oppose double standards. It will all likely end in tears.

This amendment embodies the only thing that we can do. International courts are ineffective; international arrest depends on the perpetrator coming here. It is insulting to the victims of genocide to imagine that putting up monuments, especially after the catastrophe, will make any difference. Nor will lighting candles or pulling down statues—all empty gestures.

If captains of industry and politicians had adopted the practice outlined in this amendment in the 1930s, history might have been very different. For example, IBM had immoral commerce with the Third Reich, supplying it with tabulating machines and punch cards, so useful in rounding up victims.

Can there be any doubt now about the genocidal moves of China? Modern communications ensure that no one can hide from their senses the genocidal policies that it is pursuing against the Uighurs. Foreign companies have wittingly or unwittingly helped China with facial recognition technology and artificial intelligence to enable social control. Trade with any part of China should be under the microscope, and let us not forget Tibet and the danger that now faces Hong Kong. Governments have the power to influence this. If China’s trade and investment are cut down, it may not be able to finance its barbaric projects. Not only should this amendment be passed with acclaim, but other Governments should follow suit.

We must remember the genocide against the Tutsis in Rwanda. The world failed to react to the events while they were unfolding. What did the Security Council do? It removed its peacekeeping mission and allowed bureaucratic foot-dragging to obfuscate the need for prompt—indeed, advance—action. That has weighed heavily on the international community, which now realises that it must do more. Advance action is needed to prevent genocide. Once it is happening it is too late. That is why this amendment is so well crafted and so deserving of support from your Lordships.

[Baroness O'Loan (CB) [V]]

My Lords, I would like to congratulate the noble Lords, Lord Alton and Lord Forsyth, and the noble Baronesses, Lady Falkner and Lady Kennedy, on this important amendment. I would also like to congratulate them and the noble Baroness, Lady Cox, on their work on the issue of genocide more broadly.

I need to declare an interest: I have been appointed as a member of the panel for the independent review of the Human Rights Act, which was announced today. The Convention on the Prevention and Punishment of the Crime of Genocide was unanimously adopted by the UN in 1948. It is important, perhaps, to remind ourselves of the definition of genocide, because it is not just killing or causing serious bodily harm or mental harm to members of a group because of their national, ethnic, racial or religious affiliations. It is also deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part, imposing measures intended to prevent births within the group, and forcibly transferring children of the group to another group. These are all things we are currently seeing in Xinjiang.

Amendment 9 provides a mechanism for limited prevention and sanction of genocide, and it hence recognises the ongoing obligation of all states with which we trade not to engage in genocide.

There has been reference already to Xinjiang, and the noble Lord, Lord Alton, spoke eloquently of the extent of trading contracts in China which involve operations in Xinjiang. Your Lordships will recall that the UN Committee on the Elimination of Racial Discrimination described the region as

“a massive internment camp shrouded in secrecy, a … no-rights zone.”

The China Tribunal, chaired by Sir Geoffrey Nice, says that the “organised butchery” of living people to sell body parts of those from religious minorities and ethnic groups could be compared

“to the worst atrocities committed in conflicts of the 20th Century”,

such as the Nazi gassing of Jews and the Khmer Rouge massacres in Cambodia. The tribunal went on to say,

“But nothing, or nothing much, will be done by the Government because the damage caused by even trying to extinguish such abuses comes at what seems to be perceived as an unacceptable cost to trade, and ultimately to our other legitimate interests.”


Through Amendment 9 we can show that something will be done, that genocide is unacceptable, that we will not engage with trade deals where genocide occurs, and that such deals will be revoked where the High Court makes a preliminary determination that they should be revoked on the grounds of genocide, should that be the final decision.

Genocide may not be a popular topic, and it happens far from home, but genocide affects us all in various ways and to a varying extent. One of the most direct ways in which genocide affects us is that by trading with genocidaires we become complicit in the genocide itself because we are not taking action to sanction or prevent it. It is not enough to respond by saying that if we do not enter into such a trade agreement, others will. We have moral and legal obligations on the international stage, and our standing will be diminished if we do not recognise the need to protect the peoples of the world against genocide by refusing to contract with those who use people in their jurisdiction as slave labourers, or so regulate their lives that they can be forced to act as slave labourers.

During the struggle against the slave trade, which engaged Parliament for 40 years, ordinary people in their millions boycotted sugar from slave-owning plantations and refused to add to the bottom-line profits of that sordid trade. Recent activity on the public stage tells us that the British people today would not wish to be complicit in slave labour and genocide, even if there is a price to pay.

Amendment 9 is tightly drawn; it will not prevent trade, except in these very exceptional circumstances. It puts down a marker that UK trade is based on an adherence to our obligations in international law to prevent the crime of genocide.

One Minister recently suggested that possible trading partners might be put off by the possibility that the trade arrangements would be ended if they were found to be in breach of this amendment. We should not be entering into trading agreements with any country that is engaged in or planning genocide in its various forms. If countries subsequently move towards genocidal actions we should provide this remedy through our courts, for we are committed to our obligations under the convention against genocide. The Minister said that to withdraw from a trade agreement because of human rights abuses would be extraordinary. Genocide is extraordinary and the measures required to combat it may well be extraordinary, but we need to do this.