Sanctions and Anti-Money Laundering Bill [HL]

Debate between Baroness Sheehan and Lord Hain

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

[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.

[Lord Hain (Lab)]

My Lords, I added my name to this group of amendments and I support my noble friend Lord Collins in pressing for greater safeguards and extra parliamentary scrutiny, not least because, as I detailed last week in Committee, the banks and London have an appalling record on money laundering—it gives me no great pleasure to say that. We pride ourselves on having one of the best centres of finance in the world, and it is a tremendous source of employment, which is important. However, there is a record of money laundering that simply requires extra parliamentary scrutiny, which is why this group of amendments is so important. That gives me the opportunity briefly, as noble Lords will be relieved to know, to comment on today’s news that HSBC has been relinquished of the penalties that could have applied in the United States of America for similar allegations. That is good news for a British bank that has a global footprint, and for its many employees here in Britain.

I will make two points on this. I caution all our banks which face allegations of money laundering—the Minister may care to comment on this point. Usually, their initial response is to deny it. Then, for example, HSBC, discovered several accounts held by the Gupta brothers, who are South African associates of President Zuma’s family, and it has closed them down, which is welcome. However, we have had a steady stream of allegations against mainly British companies: Bell Pottinger and KPMG, and then McKinsey, which is an American-based company with a presence here. Their initial stance is to deny, then admit, and then apologise. I caution them that with this disease of money laundering it is better not to deny in the first instance.

My second point is to thank the Financial Conduct Authority for the way it has engaged on this issue. I can report to the House that at least one whistleblower who has been supplying me with information from South Africa has engaged directly with the FCA—it has been a positive experience. I say to the financial institutions involved that I named in your Lordships’ House, including HSBC, Standard Chartered and the Bank of Baroda, that if I find that there is any witch-hunting of those responsible, or of the brave, courageous people in the South African governmental system who have also been supplying me with information, I will name the institutions involved and identify the individuals as having suffered that persecution. I say this before your Lordships because it is important that as we take the Bill through we arm it with the instruments necessary to stop this kind of practice.