Foreign Influence Registration Scheme

Debate between Lord Hanson of Flint and Earl of Effingham

Wednesday 2nd April 2025 Lords Chamber

[Lord Hanson of Flint (Lab)]

I am grateful to my noble friend Lord Stansgate for his work in this field and for his question. Where the scheme will be of best benefit is that it will allow greater transparency around individuals who may be influenced, in this case by Russia or, as in the previous announcement, by Iran. That gives confidence to parliamentarians particularly. Any individual who is engaged with or supporting an all-party group, in whatever shape and form they do that, will have had to make a declaration about foreign influence before they participate in any activity as a whole. After 1 July, that will be a public matter of record. If they do not declare it and are subsequently found to have such influence, they will be subject to severe penalty, tested by the police, the CPS and the court, and ultimately subject to penalties of potential long terms of imprisonment of up to five years. I hope that will bring a transparency and confidence to all-party groups in the event of individuals believing that such groups are somehow influenced or fronted by organisations which are seeking to do malevolent damage to the UK. It gives transparency and flushes that out. If anybody tries to do that in a secretive way and is found to be doing so, they will face a severe penalty.

[The Earl of Effingham (Con)]

My Lords, exactly as the Statement says, it is our duty to defend the safety and interests of the UK. However, it also says that businesses will have to ensure they understand their obligations and that there must be strong compliance with the scheme. What consultations have taken place with businesses, both large and small to medium-sized, to ensure the process is entirely rigorous but, equally importantly, easy to undertake?

[Lord Hanson of Flint (Lab)]

That is a very important point. We do not want to damage business, trade or engagement with any nation currently under the FIR scheme or potentially under FIR schemes. Currently, there is a significant difficulty with trade with Russia, because of the issue with Ukraine, and rightly so. Ultimately, we have had widespread consultation on this matter. We want to make sure that we do not damage business, but it is important that national security is at the forefront of our thinking. The prime move today is to make sure that malevolent actors do not operate in a non-transparent way, and that if they do, and are found, they will face the full force of United Kingdom law under the cross-party Act that we supported collectively in both Houses.

Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) (Northern Ireland) Order 2024

Debate between Lord Hanson of Flint and Earl of Effingham

Monday 2nd December 2024 Grand Committee

[The Earl of Effingham (Con)]

My Lords, His Majesty’s Opposition welcome this order, and we hope that it will allow the police in Northern Ireland to seize the property of criminals who abuse crypto assets, ensuring that Northern Ireland has the appropriate measures in place to tackle illicit financial activity.

This order brings into operation a revised code of practice relating to the search, detention and seizure of property in Northern Ireland, making it easier for the police there to take control of and recover crypto assets under the powers in Part 4 of the Proceeds of Crime Act. We request that the Minister provides the latest figures on the use of crypto assets in Northern Ireland. We need to ask: is there a specific problem related to crypto assets and criminal activity in Northern Ireland that he is aware of and that the order seeks to address?

Clamping down on the misuse and criminal use of crypto assets is an essential part of stopping crime in Northern Ireland. As much as we welcome this order, we must pose additional questions to further understand its scope. Can the Minister please outline roughly how many people he expects to receive a custodial sentence because of this order? How does the policy fit in with recent moves to release some criminals early? Finally, the Explanatory Memorandum notes that an agency

“requested that the definition of ‘control’ is given clear guidance”.

Will the Minister provide guidance on the use of this term in the legislation?

We welcome this order as a necessary evolution of our legislative response to economic crime, and we look forward to hearing the Minister’s responses to our questions.

[Lord Hanson of Flint (Lab)]

I am grateful to the noble Earl for his support for the order, and I will return to his questions in due course. I am also grateful for the contributions from the noble Lords, Lord Empey, Lord Hay, Lord Browne, Lord Morrow and Lord McCrea, and the noble Baroness, Lady Ritchie. It feels like old times. I have not been a Minister in Northern Ireland since 2007. I had two fabulous years there, and it is good to see that scrutiny of government continues as it did when I was in Northern Ireland previously. It was good to hear the points that were raised.

I remind colleagues and noble Lords that the purpose of this order is to provide a code of practice to ensure that guidance is given, on a reserve basis, to officers who exercise the powers under the Act, in order to give proper accountability for the use of those powers by those officers. Colleagues and noble Lords will know that that includes scope on the search and seizure powers and limitations on the exercise of powers. It also provides for seeking senior officer approval and it gives reasonable grounds for suspicion, refusal of prior approval, limitation on the exercise of powers by immigration officers and a whole series of measures that are designed, in that code, to put a framework around the operation of the powers under the Act.

I will answer noble Lords’ points in a different order, but I hope we will cover them all. The noble Baroness, Lady Ritchie of Downpatrick, talked about the date of implementation and the discussion with the Northern Ireland Assembly, as well as the impact assessment and the impact of the Act. The Northern Ireland codes came into operation on 17 July 2024. Those codes have been published and are available. Northern Ireland ran a public consultation on its code and any citizen or organisation in Northern Ireland was able to comment upon this code. The codes in Northern Ireland have been approved by the Northern Ireland Assembly on a cross-party basis.

The noble Baroness mentioned the impact of the Act. From April 2014 to the end of October, 90 cases have been exercised with this new power. Those figures are for Northern Ireland, England and Wales. I am not able today to give her and others a breakdown of the particular usage in Northern Ireland, as opposed to England and Wales, but the powers have been used 90 times. Noting what the noble Earl and other colleagues said, I say that the purpose of this order is to ensure that we take action against people who wish to use cryptocurrency for illicit criminal purposes. The code we are discussing is about putting in place the framework so that the powers are not open to challenge, so that there is clarity about how they are used and so that, when they are used, individuals have the ability to challenge them—but there is a legal back-up to ensure that, when bad actors are doing bad things, they cannot wriggle out of those bad things by saying that those powers were used improperly. That is the purpose of this code. I hope that answers the points made by the noble Lords, Lord Empey and Lord Browne, and others, but, if not, please feel free to intervene. Again, these powers were subject to wide discussion and consultation generally.

The noble Lord, Lord McCrea of Magherafelt and Cookstown, particularly raised what happens to the assets when seized. I am pleased to tell him that, when a court has been satisfied that the crypto assets are the proceeds of crime or are terrorist crypto assets, the asset holder—whoever that may be—will be permanently deprived of those assets. They will be sold and the proceeds will go into supporting the compensation of victims—that is an important aspect, to make sure that victims are at the heart of this—or they could be retained by the state and reinvested into tackling economic crime and countering terrorism downstream.

We want to stop the type of activity that is taking place. Seizing assets means that people are still trying to get some assets through. Hopefully, we can get to a position where this is a deterrent as well and stops people wishing to act with these assets. But, in the event that they do, that they are convicted and that there is an asset recovery regime in place, those assets will be used for the wider community at home.

A number of noble Lords asked about the impact assessment. We produced an impact assessment on the legislation, which was assessed and went through a number of routines—including on 11 November in this Room—and we finalised it very recently. I point out to the noble Earl and others that there is cross-party support for the legislation. It would have possibly gone through earlier had we not had the great event of the general election in July, which has propelled me from a quieter life back here. It also meant we had some delay in our cross-party discussions and agreements on the legislation.

We did not have a specific impact assessment on the powers in the code, but I hope they have been established in the way they have so that they can be operated and safeguarded. There was a consultation, which has come forward, although there was no impact assessment.

Another point noble Lords mentioned is the confiscation regime, which is largely for the Northern Ireland Assembly and devolved matters. I am repeating myself, but it is important to reflect on what we are discussing: the code is about how UK officials in immigration, Border Force or other named organisations in the code are held to account by a standard set by this House, the House of Commons and the UK Government on those devolved areas.

I think the points the noble Earl mentioned have been covered; if not, I am happy to reflect on Hansard in due course and any points that have been made by noble Lords and try to refer back to them. However, I think and hope there is a co-terminosity of agreement between us in this House, from His Majesty’s Official Opposition through to the Ulster Unionist Party, the Democratic Unionist Party and the SDLP in Northern Ireland.

We are trying to ensure that crypto assets under this legislation are deterred and, if they are found to be used for criminal activity, seized. There is a code of practice that monitors the use of officers for seizing those assets. If those assets are seized for criminal purposes, they are wound back into the community in a positive way. That sends a signal to both sides of the border in Northern Ireland in relation to the Administrations there that the use of crypto assets is not an acceptable way of financing criminal activity or terrorism.

I will check this outside of the Committee, but to answer the noble Lord, Lord Hay, there has not been any formal consultation with the Irish Government on these powers because they are for the Northern Ireland Assembly, under the joint leadership of the First Minister and the Deputy First Minister, the Justice Minister and the Home Office, under the leadership of my right honourable friend the Home Secretary. However, I believe they are not areas that would cause concern as they are entirely matters for within the confines of the United Kingdom, with different responsibilities between the two different agencies.

With that, I hope the Committee can accept the order. If I missed any points, I will reflect on Hansard and write. If anybody wishes to intervene on any point I have not made, please do so now. I can see my noble friend Lady Ritchie ready to bungee jump into action, so I will let her intervene.