Turkey: Human Rights
Lord Ahmad of Wimbledon Excerpts(6 years, 9 months ago)
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Lord Balfe
To ask Her Majesty’s Government what assessment they have made of the strength and effectiveness of their representations about human rights abuses to the government of Turkey once the United Kingdom is outside the European Union.
The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, the United Kingdom and Turkey have a close and constructive relationship that enables us to raise our human rights concerns at the highest levels. We do not expect this to change as we leave the European Union. In addition to bilateral channels, we address human rights issues in other multilateral fora, including the Council of Europe, of which Turkey is also a member.
Lord Balfe (Con)
I thank the Minister for his reply, but point out that when we are outside the European Union we will no longer be a part of its common position. That will mean that we are not able to shape that common position, nor will we be part of it when we are making representations. Does the Minister consider that the little bit of independence which we gain is worth putting us in the same position as, say, Canada, another largish NATO ally but one which is very much on the margin when it comes to making representations in Ankara?
Lord Ahmad of Wimbledon
Britain’s position with Turkey goes beyond our membership of the European Union. Let it not be forgotten that the United Kingdom has been the strongest voice for Turkey’s membership, to broaden the base of the European Union. I disagree with my noble friend: it is not a small decision or issue. Leaving the European Union, with the opportunities that provides to global Britain, will present the United Kingdom with a new way of defining relationships; we will continue to strengthen our existing relationship and influence with Turkey.
Lord Collins of Highbury (Lab)
My Lords, for a long time the United Kingdom’s policy towards Turkey was to encourage it to join the European Union, for the very good reason that it improved standards, held people to account and applied the rule of law. By leaving, we will be saying to Turkey: “Do what we say”. That is not good enough. Surely, we need to act collectively to defend human rights.
Lord Ahmad of Wimbledon
The noble Lord is aware that we will act to defend human rights, not just with our European Union partners—we will continue to have a strong relationship with them on this important issue once we have left the Union—but also through other bodies such as the UN body on human rights. We will continue to make the case for human rights across the piece. That also means that when we see human rights abuses in countries such as Turkey, with which we have relationships, we stand up and make our position absolutely clear.
Lord Scriven (LD)
The Minister will be aware of the repeated abuses of Turkish LGBTI citizens’ human rights by their own Government, including the firing of rubber bullets to stop Pride celebrations. The EU has withheld €175 million of money due to Turkey to protest at this and other human rights abuses. If we are to leave the EU, what will come first in the Foreign Office’s policy towards Turkey: trade or action on standing up to protect human rights?
Lord Ahmad of Wimbledon
The noble Lord does a disservice to Britain’s history. Britain has always been a proud proponent of human rights. It continues to be so while it is a member of the European Union, and it will continue to be a proud proponent of human rights once we leave the European Union.
Lord Tebbit (Con)
My Lords, can my noble friend tell me how successful have been the European Union’s representations to Turkey to clear these matters up? From what we have heard, it should have been a pushover for them.
Lord Ahmad of Wimbledon
That is for objective commentators to assess but, as my noble friend will recognise, we have had success in influencing Turkey on a range of human rights issues. Recently, it was British representation which ensured the release on bail of most of the human rights defenders before trial, although one is still in detention. That is down to the strong relationship which the United Kingdom has with Turkey on human rights. Turkey does listen to our protests.
Lord Cashman (Lab)
My Lords, there have been worrying developments in Turkey recently, and the EU has been very vocal and effective. I refer specifically to the president’s denouncement of the established and renowned Boğaziçi University in Istanbul and the banning of any lesbian, gay, bisexual or trans exhibitions and cultural events in Ankara. Will the Minister join with others in reinforcing that such a ban, supposedly due to security concerns, should not be used to diminish the human rights and civil liberties of all citizens in Turkey, particularly those who are lesbian, gay, bisexual and trans?
Lord Ahmad of Wimbledon
As the noble Lord will know, the United Kingdom did at that time make its position on this issue absolutely clear to the Turkish authorities and continues to do so. We will continue to raise it in international fora. Indeed, it continues to be raised in all our bilateral meetings and dealings with our Turkish counterparts.
Baroness Nicholson of Winterbourne (Con)
Does the noble Lord agree that, despite the many qualities of the European Union, its handling of Turkey has been negative, retrogressive and incompetent, and that you can tell that by the way in which north Cyprus responded to the excellent overtures from the European Union at the time when Cyprus joined? Does he also agree that Britain is in a unique position with respect to Turkey, given that both are very early members—almost founder members—of the Council of Europe, and that it is much better to have Turkey discussing issues round the table than to have it outside the door, as the European Union has successively proved?
Lord Ahmad of Wimbledon
I share my noble friend’s sentiment that we have been disappointed with colleagues across the European Union who have not been supportive of the United Kingdom’s position of encouraging Turkey’s membership. However, we will continue to work with Turkey after we leave the European Union, and we will work with the European Union—whether that is through our membership of the Council of Europe or whether it is through our continued membership of NATO—to ensure that on important issues, where we agree, we will make those positions absolutely clear and, where we need to make our position clear to the likes of Turkey on human rights, that position will also be made clear.
Baroness Tonge (Non-Afl)
My Lords, the Minister speaks very proudly of this Government’s defence of human rights, but when will they start to defend the human rights of Palestinians, particularly Palestinian children?
Lord Ahmad of Wimbledon
I know that the noble Baroness has been a very strong campaigner on this issue, and she knows for a fact that the United Kingdom has been, and continues to be, very vocal on it. We have a very strong relationship with Israel which allows us to have candid conversations in which we stand up for the rights of the Palestinian people and of the children held in detention in Israel. I reiterate that the United Kingdom believes that the long-term solution to the crisis in the Holy Land and the Middle East that is ripping apart communities at times is a two-state solution, and the United Kingdom stands by that.
Lord Reid of Cardowan (Lab)
My Lords, in view of the Minister’s answers regarding our support for Turkey’s position, is it not ironic that the will of the people, to which he and other Ministers keep referring, was persuaded, at least in substantial part, by the dreadful rumours that 76 million Turks would join the European Union?
Lord Ahmad of Wimbledon
The noble Lord may speculate, and there will be different reasons as to why people voted, but I do not agree. I accept that certain elements of the campaign were not desirable. I made my position clear at that time, as did the Government. That applied to those on both sides of the campaign. However, the fact is that, in a referendum voted for by both Houses, the majority of people voted to leave the European Union. We are not listening to the likes of Mr Barnier, and we do not need his direction; we needed the direction of the British people, they have given it and we are following it.
Brexit: Foreign Policy
Lord Ahmad of Wimbledon Excerpts(6 years, 10 months ago)
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Lord Soley
To ask Her Majesty’s Government what assessment they have made of the foreign policy implications of the United Kingdom’s relationship with the European Union post-Brexit.
The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, as my right honourable friend the Prime Minister has said on a number of occasions, we remain committed to European security and values. Having reached sufficient progress on phase 1 of the negotiations, we will now begin work on the new, deep and special partnership. We will work with European partners to develop the details of an ambitious relationship, including on foreign policy, and alongside the negotiations we will be seeking even stronger bilateral relationships with member states.
Lord Soley (Lab)
Currently, the high representative represents the European Union in its increasingly global activities, which are very important to this country. I have yet to hear any coherent plan from the Government on how we are going to relate to her work—at the moment there is an Italian high representative—and how we are going to balance that with our increasing representation in individual EU countries without stripping our assets from the rest of the world.
Lord Ahmad of Wimbledon
My Lords, as I have already said, the UK, after we leave the European Union, will remain committed to strengthening ties with the remaining members of the European Union. The noble Lord may well have seen the common foreign and security policy document that we published in September, which laid out some of the key areas of discussion. On his point about European partners, I am sure that he followed very closely the UK-French summit only last week. The issue of security on a bilateral basis, for example, among other areas, was discussed in a very deep way. That underlines the continuing sense of respect and importance that is given by European partners to the UK’s role after we leave the European Union.
Lord Howell of Guildford (Con)
My Lords, is not the implication of what my noble friend has said that, as we develop our deep and special relationship, we are going to need a great many more bilateral links with, obviously, the other 27 members of the European Union and the wider world? Does that not indicate that perhaps the time has come to put an end to trying to run large parts of our foreign policy on a shoestring?
Lord Ahmad of Wimbledon
My noble friend is right that it is important to look at this issue in broader terms. Of course, our European relationships are important, but I reiterate that we remain members of the Security Council, the G7, the G20 and, of course, NATO. My noble friend is right to raise the important point of resourcing. The Foreign Office budget—the core budget—will increase next year to £1.24 billion. My noble friend may also be pleased to hear that we are also looking to add support to the Foreign Office network within a European context.
Lord Hannay of Chiswick (CB)
My Lords, does the Minister recognise that last year we found ourselves in very close harmony with France, Germany and other European countries on a number of events, including climate change, Jerusalem and the Iran nuclear deal? Does he thinks that is pure happenstance or that there is a pattern there? By the way, does he think that we still control the bridge across the Atlantic between the United States and Europe, or is it controlled perhaps by President Macron?
Lord Ahmad of Wimbledon
Taking the noble Lord’s second question first, our relationship with the United States is important and strong. Indeed, the importance of NATO was reiterated and emphasised by my right honourable friend the Prime Minister during her meeting with the President in Washington. On the question of how we will continue to work with our European partners on important issues such as climate change and the Iran nuclear deal, that meeting demonstrates that we are close to the United States but, because of our candid and strong relationship, we are able to have those conversations to ensure that, as we have seen both on climate change and the Iran deal, we can make strong representations to the US in a way that will, we hope, allow it to think again.
Baroness Northover (LD)
My Lords, does the Minister agree with all those who say that we have had a disproportionate influence on foreign policy within the EU? Does he also agree that European ambassadors, including ours, of course, work together in countries and before summits to maximise our influence further? What kind of arrangements and resources will the Government seek to make sure that this influence is not reduced further than it already is?
Lord Ahmad of Wimbledon
First, I disagree with the noble Baroness’s final point that the influence is decreasing. On the contrary, I have not found that when I have travelled across the world. For example, when I was in Ghana, we had various meetings with the EU representative as well as our high commissioner on the ground. The noble Baroness will know that the specifics are yet to be determined, but it is very clear to me and the Government that we will continue to have very strong ties with our European partners. Recent events such as the UK-French summit and the meeting in Poland demonstrated that other European partners take the same view.
Lord Collins of Highbury (Lab)
My Lords, the key point is that our deep relationship and partnership has added value to collective action. The world faces its biggest refugee crisis, and leaving the EU will weaken our ability to act collectively. What are the Government doing to ensure that in the future, working with DfID and the ODA budget, we can act collectively in Europe to protect our security interests, not least the humanitarian concerns facing the world?
Lord Ahmad of Wimbledon
We are, I believe, one of only a few leading nations that fully manifest our commitment to our defence spending and our development spending, which I know all noble Lords support. On the noble Lord’s substantive point about how we will continue to work with our European partners on important issues which he raises such as the refugee crisis that we have seen on European borders, again, if he was to look at the detail of the recent summit with the French, he would see that these kinds of issues come to the fore and decisions are being taken. While, yes, we are leaving the European Union, we will look to work in a collaborative way with our European Union partners once we leave.
Lord Pearson of Rannoch (UKIP)
My Lords, would the Government agree that we built and released an empire and saved Europe from herself in two world wars without any assistance from Brussels? Is not any new EU army pretty well bound to be a dangerous failure, like the EU itself?
Lord Ahmad of Wimbledon
The United Kingdom is proud of its role during the two wars, and the alliances we built then with our European partners are important. On his question about an EU army, I believe there is no formal proposal on the table, and if there was and we were to remain a member of the EU, we would not support it. However, because we are leaving the EU, it will not be a relevant question for us.
Hong Kong
Lord Ahmad of Wimbledon Excerpts(6 years, 10 months ago)
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Lord Ashdown of Norton-sub-Hamdon
To ask Her Majesty’s Government what assessment they have made of Hong Kong’s autonomy, rights and freedoms, following recently approved changes to the procedural rules of Hong Kong’s Legislative Council, and the refusal of entry into Hong Kong of Taiwanese scholars and the British human rights activist, Benedict Rogers.
The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, the Government’s most recent six-monthly report, published in the House in September, makes it clear that, while the one country, two systems framework is generally functioning well, important areas are coming under increasing pressure. Since then, the case of British national Ben Rogers being denied entry to Hong Kong in October has raised further concerns, as reflected in the Foreign Secretary’s public statement at the time and subsequent further evidence to the Foreign Affairs Committee.
Lord Ashdown of Norton-sub-Hamdon (LD)
My Lords, I am grateful for that reassuring reply. Is the Minister aware that, according to the claims made by the Hong Kong and Chinese authorities, it is an interference in the domestic affairs of China for a British parliamentarian to visit Hong Kong to assess progress on the joint declaration? Given that the joint declaration is an international treaty lodged in the UN, which places responsibility on both sides to carry it out, will the Minister take this opportunity strenuously to reject that view and ensure that both the Hong Kong and Beijing authorities are duly notified?
Lord Ahmad of Wimbledon
Let me assure the noble Lord that I totally agree with the position he has just articulated. Indeed, we are fully aware of the situation that arose with the noble Lord’s visit to Hong Kong. In that regard, I am sure that he read with a positive perspective the reply of my right honourable friend the Foreign Secretary, which very much restates the position articulated by the noble Lord. I assure noble Lords that the UK remains committed to strengthening its relationship with China, but not to the detriment of the joint declaration, which remains strong as ever.
Lord Collins of Highbury (Lab)
As the noble Lord, Lord Ashdown, said, this is an international treaty. In the debate in Westminster Hall yesterday, Mark Field said that we will continue to raise with the Chinese authorities our concerns, particularly on the Ben Rogers situation, but also about the ongoing arrests—28 last month. If we are to continue to raise our concerns, is it not about time that we escalated this so that the Prime Minister demands answers from China on these breaches of an international treaty?
Lord Ahmad of Wimbledon
As the noble Lord may be aware, at the last G20 meeting my right honourable friend the Prime Minister raised various issues in this respect. On his point about escalation and Ben Rogers, he may be aware that, at that time, the Chinese ambassador to the UK was also summoned to the Foreign Office. I have met Ben Rogers, as have other Ministers, since this incident took place. Let me reassure the noble Lord—indeed, all noble Lords—that we continue to use every opportunity, both bilaterally and through international fora, to raise the important issue of the international agreement, to which both countries are signatories.
Lord Patten of Barnes (Con)
After Mr Rogers’ case, what advice does the Minister give to other British citizens travelling on a bona fide passport who wish to go to Hong Kong? Should they simply go, or should they inquire first of the Chinese embassy whether their presence in Hong Kong is to be tolerated?
Lord Ahmad of Wimbledon
My noble friend speaks from great knowledge of the area, but as he and all noble Lords will be aware, the issue of immigration remains very much in the hands of the special administrative region of Hong Kong and our advice has not changed: British citizens should travel to Hong Kong, as they do now.
Lord Alton of Liverpool (CB)
My Lords, I declare an interest as a patron of Hong Kong Watch. Notwithstanding what the Minister said in his welcome reply to the noble Lord, Lord Ashdown, how does he respond to the Hong Kong Bar Association’s assertion that the Chinese Government’s decision to enforce mainland law at the new high-speed rail terminus in Hong Kong is,
“the most retrograde step to date in the implementation of the Basic Law and severely undermines public confidence in ‘one country, two systems’ and the rule of law”?
That fear is reinforced by the imprisonment of Joshua Wong and Nathan Law, both of whom I have hosted here in your Lordships’ House, and whose treatment is yet another sign that one country, two systems is morphing into one country, one system.
Lord Ahmad of Wimbledon
The noble Lord is right to raise these issues and while the economic case that the Chinese have made for the high-speed rail link is clear, it is also important that the final arrangements are and remain consistent with the one country, two systems framework. We understand that the Hong Kong Bar Association and the Law Society of Hong Kong have also raised concerns about the legal basis for this proposal, and we continue to urge both the Chinese and the Hong Kong special administrative region to ensure that the agreement, which stands with international recognition, continues to be abided by.
Lord Thomas of Gresford (LD)
My Lords, for those of us who love Hong Kong and really appreciate the energy and vitality of its people, will the Government impress on the Chinese Government that the special position of Hong Kong and its prosperity depend upon the rule of law and its maintenance, and that anything done to undermine that—fortunately, we still have an independent judiciary there—is likely to ruin Hong Kong’s prosperity in international trade everywhere in the world?
Lord Ahmad of Wimbledon
The noble Lord is quite right and I agree with him totally. Let me assure him that we continue to address this issue through the Chinese authorities, bilateral meetings and the Hong Kong authorities. The Chief Executive of Hong Kong, for example, visited last September and in every meeting she had during that visit—indeed, my right honourable friend Sajid Javid visited Hong Kong last November—the very point the noble Lord makes about sustaining, strengthening and upholding the rule of law was clearly made to the Chinese authorities.
Lord West of Spithead (Lab)
My Lords, Hong Kong was as colony for many years and in that time, a large number of Hong Kong people served in the Navy and the Army. Some of those who served, many of them for quite long periods, are now not getting any special treatment in trying to come to this country. Is this issue being looked at and dealt with in government—or has it just been pushed to one side?
Lord Ahmad of Wimbledon
As the noble Lord may well be aware, people who are Hong Kong residents are granted special consular assistance if they are travelling to third-party countries; indeed, they can visit the UK for up to six months, and we have seen that recently with many people in Hong Kong, including those with the special status the noble Lord mentions. The police is another area we are looking at, and we want to ensure that we can process applications through the normal Home Office channels. But my understanding is that more than 200,000 people resident in Hong Kong have British nationality, and a Home Office process remains in place to look into the individual cases of those who do not. However, I stress that it is an immigration process and the Home Office looks at it closely to ensure that the rights and responsibilities are sustained, and the rights of those seeking British nationality are also protected.
Sanctions and Anti-Money Laundering Bill [HL]
Lord Ahmad of Wimbledon ExcerptsWednesday 24th January 2018
(6 years, 10 months ago)
Lords ChamberRead Full debate Sanctions and Anti-Money Laundering Act 2018 View all Sanctions and Anti-Money Laundering Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 78-I Marshalled list for Third Reading (PDF, 72KB) - (23 Jan 2018)
“(a) enabling or facilitating the detection or investigation of money laundering, or preventing money laundering;(b) enabling or facilitating the detection or investigation of terrorist financing, or preventing terrorist financing;”
The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, it is a pleasure to stand before the House once again, and to speak to Amendments 1, 2, 5, 6 and 7. Although these are tabled as government amendments, they have been prepared through close collaboration with noble Lords. In particular, I convey my thanks for the collaborative and constructive engagement that we have had with the noble Baronesses, Lady Bowles and Lady Kramer.
I said at Second Reading, and have said throughout the Bill’s progress through your Lordships’ House, that I intended to co-operate and work constructively with all noble Lords as this important Bill progresses through the House. I am pleased—and I am sure that the sentiment is shared by all noble Lords—that we have been able to conduct debate on the Bill in this very spirit and that the noble Baronesses have been able to sign these government amendments. They improve the Bill, and I hope that the amendments which we will discuss today will further satisfy all those in your Lordships’ House that the powers in the Bill are appropriate for the UK’s future anti-money laundering regime.
In brief, Amendment 1 requires that future regulations made under Clause 43 can only make provision which enables or facilitates the detection or investigation of money laundering or terrorist financing. Power remains within Clause 43 to make regulations that prevent money laundering or terrorist financing and to implement the standards of the Financial Action Task Force. This clarifies the purposes for which regulations can be made and addresses concerns that have been raised by noble Lords.
Amendment 2 is a technical change which extends the definitions of money laundering and terrorist financing contained within Clause 43(4) to the proposed new clause that would be introduced in connection with the register of beneficial ownership of overseas companies that own UK property through government Amendment 3, which I will speak to later today. This amendment is necessary to ensure that the definitions already contained within Clause 43 are consistently applied throughout the sections of the Bill that relate to anti-money laundering.
Concerns have been raised over the breadth of paragraph 2 of Schedule 2. Amendment 5 addresses these concerns by limiting the ability of regulations made under Clause 43 to require only relevant government departments, anti-money laundering supervisory authorities, and persons carrying on a relevant business to identify and assess risks relating to money laundering, terrorist financing or other threats to the integrity of the international financial system. This also clarifies the scope of the power and essentially reflects the current position within Regulations 16 to 18 of the money laundering regulations 2017. This narrowing of the scope of potential duties to carry out such risk assessments is consistent with the approach currently taken by the United Kingdom’s anti-money laundering framework.
Lord Ahmad of Wimbledon
My Lords, I once again thank noble Lords for their support on these amendments. I have listened very carefully, as I always have, to the noble and learned Lord, Lord Judge, on the issue of criminal offences. I think he referred to Clause 17 and Schedule 2. I assure him that we will return to this in the other place to ensure the consistency of the drafting. I will certainly take this up, but I can give him that reassurance.
Apart from that, I wish again to extend my thanks to all noble Lords who have engaged constructively. To pick up on the point made by the noble Baroness, Lady Kramer, I understand that the noble Baroness, Lady Bowles, was out in New Zealand. It is a good example for all of us that, if you have a 23-hour or 24-hour flight, drafting amendments is one way of utilising that time. I beg to move.
“Reports on progress towards register of beneficial owners of overseas entities
(1) The Secretary of State must, after the end of each reporting period, publish a report explaining the progress that has been made during that period towards putting in place a register of beneficial owners of overseas entities.(2) For the purposes of this section, the following are reporting periods—(a) the period of 12 months beginning with the day on which this section comes into force; (b) the period of 12 months beginning with the day after the end of the period mentioned in paragraph (a);(c) the period of 12 months beginning with the day after the end of the period mentioned in paragraph (b).(3) The first and second reports under this section must include—(a) a statement setting out the steps that are to be taken in the next reporting period towards putting the register in place, and(b) an assessment of when the register will be put in place.(4) The third report under this section must include a statement setting out what further steps, if any, are to be taken towards putting the register in place.(5) Where a report is published under this section the Secretary of State must lay a copy of it before Parliament.(6) For the purposes of this section “a register of beneficial owners of overseas entities” means a public register—(a) which contains information about overseas entities and persons with significant control over them, and(b) which in the opinion of the Secretary of State will assist in the prevention of money laundering.”
Lord Ahmad of Wimbledon
My Lords, this amendment seeks to set down in legislation the commitment I made on Report that the Government would make regular reports to Parliament on the progress being made on its proposal to create a register of beneficial owners of overseas entities that own or buy property in the UK or participate in UK government procurement. The new clause requires the Secretary of State to publish and lay before Parliament three reports on the progress made to put in place the register. Each report will be due after the expiry of a 12-month reporting period. The first and second report must set out the steps that will be taken in the next reporting period towards putting the register in place and an assessment as to when the register will be put in place. The third and final report must also include a statement setting out what further steps, if any, are to be taken towards putting the register in place.
Noble Lords will have noted that my noble friend Lord Henley, the Business Minister, this morning laid a Written Ministerial Statement before the House confirming the Government’s intention to publish a draft Bill for scrutiny this summer, as I said on Report, and to introduce a Bill in the second Session—an assurance I gave on Report—and for the register to be operational in 2021.
I also reassure my noble friends, particularly my noble friend Lord Naseby, that the amendment places a duty on the Government to report on progress against implementing a public register of beneficial ownership of overseas legal entities involved in property or procurement within the UK, and will not cover the overseas territories. It would be fair to say that the House had quite a frank debate on this subject only last week. As the House decided, it is for the legislatures of the overseas territories to implement a public register. I reassure noble Lords that we will continue to work with our overseas territories. Indeed, the review periods of 2018 and 2019 that I highlighted will also reflect our continued co-operation with the overseas territories concerning their obligations.
I therefore hope that this covers the assurances that noble Lords, particularly my noble friends, sought, and that my noble friend Lord Naseby will be minded not to press his amendment. I beg to move.
Amendment 4 (to Amendment 3)
Lord Collins of Highbury
I will be very brief. I congratulate the noble Lord, Lord Faulks, on pushing this issue. I do not think he owes anyone an apology for doing so because it is vital that we tackle this. This amendment is about the commitment that was made but has been delayed for a long time. My concern, and that of the noble Lord, Lord Hodgson, is that the wording of the amendment potentially takes us to 2022 before we see something. I think all noble Lords will be behind the noble Lord, Lord Faulks, in putting pressure on the Government to ensure that they properly meet their commitment.
Still on public registers, I agree with the noble Baroness, Lady Kramer. I am glad to see that the noble Baroness, Lady Stern, is in her place. She made a powerful case for public registers in overseas territories. The front page of today’s Guardian has an article about Appleby and FBME Bank, which was banned from the US financial system. Appleby is a Cayman Islands-registered holding company. Anyone who reads that article will know that this issue will not go away and we will have to come back to it.
Lord Ahmad of Wimbledon
My Lords, I am grateful to noble Lords. I reiterate my thanks to my noble friends Lord Faulks and Lord Hodgson for pressing the Government and holding us to account in this respect and ensuring that we move forward. I am also grateful to my noble friend Lord Naseby, who sought clarification. I have looked carefully at his amendment and I think what the Government have tabled and his amendment have the same intent. However, in the interests of ensuring thoroughness and completeness, I have asked officials to look again to make sure that the intent behind his amendment is achieved.
The Government have committed to the new Bill establishing the register. It will be primary legislation and will pass through your Lordships’ House, so I am sure there will be further discussions and plenty of opportunity to ensure that all issues, particularly those raised by my noble friend, are addressed. I assure him that we feel the intent behind his amendment has been achieved. I will, however, look at this again, and if there is a need to do anything further, we will seek to do that in the other place.
My noble friend Lord Hodgson asked me when Royal Assent might be granted. It is not within my gift as the Minister at the Dispatch Box to confirm that, but we are expecting Royal Assent at the end of this Session. On accountability, I reassure my noble friend that through the additional ministerial Statement laid today, I have sought to provide as much detail as I can at this juncture in the parliamentary timetable. However, as I said to him in our bilateral meetings—I believe this was communicated to him subsequently in other meetings we had—we have worked back, and as the Written Ministerial Statement again confirms, we are looking to have the register operational by 2021. I am sure there will be other opportunities. As for the Government laying a report, I confirm that the 12- month clock—the countdown—will commence as soon as Her Majesty has signed off on the Bill. However, it would be beyond the scope of my responsibilities to give an absolute, cast-iron guarantee as to when Royal Assent will be. I am sure my noble friend appreciates and respects that we have to follow due process. However, the Government are committed to the register being operational in 2021. From the points made by other noble Lords, I appreciate that wherever one is sitting in your Lordships’ House, there is no disagreement on the need to move forward on this and to do so as rapidly as we can.
My noble friend raised another issue, about procurement. Again, to reassure him on that, I draw his attention to the Written Ministerial Statement laid today by my noble friend Lord Henley, which says:
“I am today confirming to Parliament the Government’s timetable for implementation of its policy to achieve greater transparency around foreign entities that own or buy property in the UK or participate in UK Government procurement”.
As the Bill is drafted and pre-legislative scrutiny takes place on it—if that is the process which is agreed—that will allow further discussion to address the very points my noble friend raises in that primary piece of legislation.
The point about local government is well made. As someone who served 10 years in local government, I am acutely aware of how procurement works. It will reflect the very policies adopted by the UK Government. With those reassurances, I hope my noble friend will be minded to withdraw his amendment.
Lord Naseby
My Lords, having listened to my noble friend, I am most grateful to him for the patience he has shown and the care he has taken over the Bill and this amendment. In light of the commitment he has made—as he says, if necessary, some amendment could be made in another place—it is my pleasure to withdraw the amendment.
“( ) section (Reports on progress towards register of beneficial owners of overseas entities);”
“(1) Require—(a) the Secretary of State or the Treasury, or both of them acting jointly,(b) supervisory authorities (within the meaning given by paragraph 23), and(c) such persons carrying on relevant business (within the meaning given by that paragraph) as are prescribed for the purposes of this paragraph,to identify and assess risks relating to money laundering, terrorist financing or other threats to the integrity of the international financial system.”
Lord Ahmad of Wimbledon
My Lords, I stand before your Lordships’ House to reiterate my thanks to all noble Lords who have put a lot of time and energy into making sure that we reached the position that we have today. I would like to take this opportunity to say a few words about the progress achieved in recent months. As many noble Lords acknowledged at Second Reading, this has been the first Bill related to the UK leaving the EU to pass through this House. It has rightly, and I fully respect this, been subject to close scrutiny.
I hope noble Lords recognise the need for legislation. Indeed, I acknowledge that the noble and learned Lord, Lord Judge, notwithstanding our differences and the bridges that have been built in reaching agreement, has consistently recognised the necessity for such a Bill because it allows us to ensure that we can update and lift sanctions, as well as address—here I am grateful to the noble Baroness, Lady Bowles—the issue of an anti-money laundering framework after we leave the EU. I said at Second Reading, and indeed at all stages as progress was made on the Bill, that getting this right will enable the UK to continue to work closely with international partners—yes, our European partners as well—to ensure that we uphold our legal obligations and promote and protect our shared interests and values.
To offer the House some perspective, so far we have dealt with a total of 214 amendments. I am told that we have spent 24 hours and 24 minutes on the Bill in your Lordships’ House—someone has clearly been timing us down to the minute. Noble Lords have listened carefully to the arguments put forward on all sides, and I hope that is reflective of the Government’s attitude. In my opinion, that demonstrates your Lordships’ House at its best. I am confident that the interventions by noble Lords have led to an improved piece of legislation. I am also satisfied that we have been able to agree a range of government amendments, and I am delighted that in several cases these have been supported by noble Lords from across the House, reflecting what I believe is a convergence of views on a number of issues, such as the policy framework for anti-money laundering measures that we have debated today.
I and my officials have engaged closely with noble Lords, both ahead of the Bill and during its passage. In this regard, I put on record my particular thanks to the Opposition Benches, particularly the noble Lord, Lord Collins. We have joked with our respective partners that we have probably seen more of each other than we have of our other halves. Perhaps, with the moving of the Bill, we will be able to provide them with some adequate time. That said, I very much welcome the constructive nature with which the noble Lord has engaged in this, well supported in this regard by the noble Lord, Lord Lennie, with the constructive proposals that he has put forward, and which are now reflected in the Bill, to make absolutely sure that these powers are exercised by future Governments in a spirit of transparency and accountability.
Equally, I am pleased to acknowledge the support, constructive dialogue and exchanges that I have had with the noble Baroness, Lady Northover, for which I am grateful. As I said earlier, I am also grateful to her colleagues, the noble Baronesses, Lady Bowles and Lady Kramer, who have engaged constructively both directly with myself and with real impact, as the noble Baroness acknowledged, on the anti-money laundering part of the Bill.
On my own side—this shows that we are tested from all sides of your Lordships’ House—as I look over my shoulder, I see three noble Lords who have engaged on this, particularly my noble friend Lord Faulks, who has really pushed on the important issue of beneficial ownership, which we have just discussed. I use the term quite directly: he has ensured that the Government’s feet have been held to the fire on that issue. I also thank my noble friend Lady Goldie, who has supported me from the Government Front Bench throughout the passage of the Bill. I am also grateful to other Whips who have supported in this regard.
It would be remiss of me not to thank the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, who, I am told, tabled a total of 50 amendments between them, with a particular focus on strengthening procedural safeguards. I acknowledge and recognise their great expertise and thank them for their collaborative and collegiate approach, which has done so much to improve the Bill.
I would like to thank my Bill team. We have heard from various noble Lords that my team has devoted a huge amount of time and energy to making this work. I thank in particular Louise Williams, the Bill manager, who has also been planning her wedding while working on the Bill; Adam Morley; Jennifer Budniak; and the Bill lawyers, particularly Luke Barfoot and Michael Atkins. There has been a team of more than 50 officials from across government who have supported them, and it has been a truly cross-Whitehall effort. This Bill has played a large part in my life over the past three months but it is only part of my portfolio. The Bill team has been working on it only since last April, but they will continue in their role as a team to shepherd the Bill through the other place. As I move on to other challenges I believe that, with our team, the Bill remains in good hands.
Baroness Northover (LD)
My Lords, when the Minister introduced the Bill at Second Reading, he described it as “technical”. It was, of course, about issues on which we all agree: enabling us to have a sanctions regime and to counter money laundering. No sooner were those words out of his mouth than he and all of us registered how important the Bill was in constitutional terms. It is indeed a forerunner of the massive legislation coming our way in the European Union (Withdrawal) Bill, and much else besides.
I therefore thank the Minister for his mental and political flexibility in realising the significance of the way in which this Bill has been drawn up, but above all for being so ready to engage. I thank him today for his latest statement that he will address the inconsistencies on criminal offences immediately in the Commons. My thanks, too, to the Bill team for its equal readiness to engage with us, even responding to emails on Sundays—I think that was Jonny and Louise—when it was clearly beyond the call of duty.
Issues in the Bill included the usual kind of areas where we sought improvements. We failed to take forward the amendment tabled by the noble Baroness, Lady Stern, but I am sure we will return to that. In other areas we have made progress, either in the Bill or through promises that the Minister made in regard to actions that the Government will take; for example, in relation to NGOs working in fragile states and those who may or may not bank them.
However, of most importance were the constitutional issues. Here we are absolutely indebted to the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, for the clarity of their thinking and their determined engagement. I also think that we owe a huge debt to my noble friends Lady Bowles and Lady Kramer—I thank the Minister for that acknowledgement—for spotting quite how much needed to be addressed on the anti-money laundering side of Bill, and setting about reconstructing it. The best result is indeed when the Government bring forward amendments in response to such concerns.
I am extremely grateful to those in my group who have engaged on this Bill. I can hardly describe myself as leading them—they are far too experienced and knowledgeable to need leading. My special thanks go to my noble friends Lord McNally and Lady Sheehan as well as to my noble friends Lady Kramer and Lady Bowles for the extraordinary amount of work they put in. I also thank the noble Lord, Lord Collins, who has been his usual wonderful self throughout this Bill, and his colleagues, the noble and learned Lord, Lord Davidson, and the noble Lord, Lord Lennie. The Bill signals much beyond what it aims to cover, and we have worked collectively around the House, including with the Government. I thank the Minister for ensuring that that work was in the end so productive. He is now temporarily liberated from the Bill—the Bill team, of course, is not—until it returns to us in due course, hopefully in a very sound fashion.
Lord Collins of Highbury
My Lords, I add my thanks to everyone involved in the Bill. I start by thanking my own team, my noble friend Lord Lennie and my noble and learned friend Lord Davidson. These people do not often get thanked publicly, but I thank also the team in the Labour opposition office, including Catherine Johnson, who did a particularly good job in helping me to be well prepared for my numerous meetings with the Minister.
I also thank the Lib Dem Benches, particularly the noble Baronesses, Lady Northover, Lady Kramer and Lady Bowles. We, again, had numerous meetings. One thing that the Minister omitted to mention—he mentioned all the time that we spent in Committee, in the Chamber, scrutinising the Bill—was that we spent substantial time in meetings outside the Chamber. In fact, the Minister got quite anxious at one point when I turned up to meetings with the noble Lord, Lord Faulks. I am sure he felt that I was in the wrong meeting at the time. We had very good cross-party and cross-Bench support, and I add my thanks to the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Judge. We now have a better Bill. It is not necessarily a good Bill in all respects, but it is a much better one than what was originally delivered.
I also pay tribute and thanks to the Bill team, particularly Louise Williams, Adam Morley and Jennifer Budniak, and of course the lawyers. I think I had the most pleasure dealing with the lawyers, and I hope Luke Barfoot and Michael Atkins enjoyed those exchanges as well. They did a terrific job; they are great public servants and, again, they deserve our thanks and gratitude. Obviously, as the noble Baroness, Lady Northover, said, their work will continue.
One thing that surprised me was that at one of the lengthy meetings I had with the Minister, the BBC fly-on-the-wall cameras were there. I hope to God it is better than the programme it did on the House of Lords. I certainly hope I come across much better than some noble Lords did, but let us wait and see—I do not know when it will come out.
My final thanks, of course, go to the Minister. He said at the beginning of this Bill, “I am in listening mode” and I know we joked about that, but honestly, he has listened and his responses prove how much he listened. I am very grateful to him for dealing with us so well on this Bill.
Freedom of Religion and Belief
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The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, Her Majesty’s Government warmly welcome the report, which is well informed and demonstrates the deep commitment of its authors. I wrote to the all-party parliamentary group on 8 December with an initial response to the recommendations, several of which have already been reflected in the Government’s approach to freedom of religion or belief. As we continue to push forward on this issue, we will continue to reflect on the recommendations made in this excellent report.
Lord Suri (Con)
I thank my noble friend the Minister for his response. He will know that the Government stated in their response to the APPG report that the stabilisation unit meets with religious and other key actors overseas to better understand FoRB. I am pleased the Government have expressed a desire to look for ways to strengthen this work. Can the Minister explain how information gathered in these meetings is currently being fed into government programming, and to government posts, to help better understand and tackle patterns of religious persecution? Can he also inform your Lordships’ House how he is tracking and assessing the responses from ambassadors and high commissioners to the letters he sent, which asked what they are doing to advance freedom of religion and belief?
Lord Ahmad of Wimbledon
I am pleased to inform my noble friend, and indeed the House in general, that there is very much cross-government co-ordination in this respect. I am delighted that, in our approach to the importance of focus on freedom of religion and belief, there is underlying support, by colleagues across DfID in particular, on ensuring that that essential element of our human rights provision is also understood across the world. On the specific issue of the different posts, I wrote to every post shortly after taking up the position of Minister for Human Rights, and in that regard we have had a positive response. Most recently, together with my right honourable friend Mark Field MP, the Minister for Asia, I wrote to each high commission and ambassador for the priority countries of Asia, and we have received very positive responses about the importance of prioritising freedom of religion and belief in our diplomatic efforts across the world.
Lord Collins of Highbury (Lab)
My Lords, I declare an interest as a member of the APPG. I certainly support its work and its report, but religion is often used as a cover for oppressing other minorities, particularly the LGBT community. A charity I am a patron of, an HIV centre in the East End of London, is working with faith groups on practical ways we can build respect and address concerns. Does the Foreign Office see the benefit of this sort of work, and is it supporting such work in other countries?
Lord Ahmad of Wimbledon
The noble Lord knows I agree with him totally. We have seen exactly those kinds of initiatives working domestically, which are of great value. In discussions we have had—and he will be aware of this—I have often said that faith communities should approach all these issues, including those of LGBT rights, as defined human rights issues. When we look at these issues through the prism of religion, the issues of fairness, equality and justice should prevail.
Lord Singh of Wimbledon (CB)
My Lords, as a member of the APPG for Freedom of Religion or Belief, I fully support the need to look beyond rhetoric towards positive action to protect freedom of belief and human rights. Will the Minister agree that we urgently need to decouple the linking of trade with human rights? Only last September, the then Defence Secretary, Sir Michael Fallon, cautioned against criticising human rights abuses in Saudi Arabia because of the danger of losing contracts. Does the Minister agree with the Soviet human rights activist Andrei Sakharov, who said that we must always be even-handed in our pursuit of human rights?
Lord Ahmad of Wimbledon
I believe that is our approach. Through our diplomatic corps, to whom I pay great tribute, we are able to have not only public but, importantly, private and candid discussions with countries around the world on the importance of human rights and the equality of human rights. The other area of opportunity where I believe the UK can play a key role is that, as we build democratic institutions and countries look towards their constitutions, those constitutions must reflect equal human rights for all.
Baroness Brinton (LD)
My Lords, as a founding member of the APPG, I thank the Minister for his response to the report. Can he provide details about the £600,000-worth of projects funded by the Magna Carta fund which the Government have said have led directly to positive freedom of religion or belief outcomes in 20 countries? If they are so positive, what will the Government do to ensure that the principles behind those projects will be spread elsewhere?
Lord Ahmad of Wimbledon
First, through the Magna Carta fund we have been working in our priority countries to ensure that freedom of religion and belief is raised, not just directly but—a point made earlier by the noble Lord, Lord Collins—by building and working with civil society organisations and human rights defenders within those countries to ensure that they have political, diplomatic and financial support. In further support of those objectives, I am delighted, as I said earlier, that we are working hand in glove with our colleagues at DfID. There is an added fund now of £12 million which is targeted at development assistance but also at ensuring that human rights, including freedom of religion or belief, are enshrined in our projects and support across the world.
The Lord Bishop of Durham
My Lords, noting recommendation 5, will Her Majesty’s Government provide detail about how DfID assesses its partners’ commitment to freedom of religion and belief when determining where the funding goes around the world?
Lord Ahmad of Wimbledon
The right reverend Prelate is right to draw attention to the detail. I have written specifically on that point to the APPG. There are assessment criteria that colleagues at DfID apply. Those ensure that freedom of religion and belief, as well as other elements of the wider human rights agenda, as I said, are protected in the support that we provide.
Lord Polak (Con)
My Lords, can I bring us back home and welcome this week’s announcement by Sajid Javid that the Government will fund a new strand of the Lessons from Auschwitz programme in support of the Holocaust Educational Trust and the Union of Jewish Students to tackle anti-Semitism, prejudice and intolerance on campus? Does the Minister agree with me that it may be a welcome initiative if each political party—some more than others—would ensure that all future candidates be taken on such an educational visit before they enter Parliament?
Lord Ahmad of Wimbledon
My noble friend is quite right to raise the important issue of anti-Semitism. It is a scourge that we all despise, and it is important that we come together and raise our voices wherever we see religion being used to discriminate, be it anti-Semitism or Islamophobia—or any particular view or belief. On the specific point of Auschwitz, if I may provide a personal anecdote, I remember visiting Auschwitz with schoolchildren just before I took on my ministerial responsibilities at the Department for Communities and Local Government. As anyone who has been there knows, while we have heard about it and may have seen films about it, the first experience you have is chilling, and then you reflect on the importance of what is in front of you. I totally agree with my noble friend: it ensures that your mind becomes focused, that never means never, and that we never allow such a genocide to take place again.
United States: Foreign Policy
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The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, I first join all noble Lords in thanking the noble Lord, Lord Ashdown, not just for tabling this debate but for introducing it in a very informed and thoughtful manner. He appropriately set the tone demonstrated by all contributions to this excellent debate, which is well-informed and again reflects the best of your Lordships’ House in terms of expertise on a wide range of issues.
It would be entirely appropriate at this juncture to welcome the noble and gallant Lord, Lord Houghton of Richmond, to his place. In his first excellent speech, he said he would be non-controversial. Drawing a military analogy, he was non-combative in that sense as well, while the noble Lord, Lord Hennessy, welcomed him to the warrior Benches. It is for me, on behalf of the Government, to welcome him to all Benches. He is a valuable addition to the House and I look forward to working with him across the months and years.
For over a century, the most important and epoch-defining international partnership has been, as noble Lords have acknowledged, between ourselves and the United States of America. It is an alliance that has overcome tyranny. It has championed rules, rights and freedoms that have transformed lives and livelihoods, both within our borders and beyond. The noble Lord, Lord Judd, also pointed out the excellent relationship we have enjoyed at the United Nations and the important role we have played with the United States in the UN as a P5 member. Let me assure all noble Lords, including the noble Lord, Lord Judd, that the UK is committed to further strengthening the rules-based international order and international organisations such as the UN, which have been central for this rules-based system for the last 70 years. Indeed, before Christmas we worked with the US and other partners to secure General Assembly resolutions in support of the UN Secretary-General’s current plans for reform efforts within that organisation.
Together, we have a rules-based international system within which we work closely with the United States and other international partners. This system, albeit imperfect, has enabled a period of relative stability and prosperity that we have never seen before. We stand together with the United States—and with Europe—in facing a resurgent Russia, an assertive China and new forms of threat across the world. We have shared great successes, for example in the fight against Daesh, in close co-operation on intelligence issues—as the noble Lord, Lord Hennessy, pointed out as part of our Five Eyes alliance—and bilaterally and in our shared commitment to NATO, reflected on by the noble Lord, Lord Ricketts.
I am confident therefore that we need no further persuasion, as we have all agreed, whatever perspective was drawn in this debate, of the United States’ continued importance to UK interests; nor of the pivotal role the United States will continue to play for many years to come, as pointed out by my noble friend Lady Helic, among others, in shaping the way the world deals with a host of issues that are fundamental to us. Whether we are dealing with the challenges of North Korea, or—as the noble Earl, Lord Sandwich, pointed out—closer to home in the Balkans, the USA has a close role to play. In that respect, I say to the noble Lord, Lord Wallace—we talked about global Britain and the three circles—that, yes, there are times of challenge in the UK-US relationship, but it remains, as all noble Lords have acknowledged, a constant, constructive dialogue; from engagement across the board at working level to regular calls between my right honourable friend the Prime Minister and the President. The strength of that relationship means that we are willing and able to have frank discussions with each other when we disagree, and rightly so for each ally.
The President has set a new direction for US policy, as many noble Lords have set out today. There are issues of difference from us, as the noble Baroness, Lady Falkner, pointed out. On climate change, not only have we been strong, we have continued to work with other international partners. My noble friend Lord Lamont pointed to the Iran nuclear deal and I can assure him that we continue to work strongly with our European Union colleagues, and the EU3 in particular, in ensuring that deal stays alive, while not missing an opportunity to ensure that the United States also continues to support that important deal. Multilateral trade agreements and the Middle East peace process, which I will come to in a moment, have been areas where we have differed from pronouncements made by the Administration. Notwithstanding differences, however, we continue to work very closely alongside the Administration on all these issues, as friends, as allies and, as my noble friend Lord Howell aptly put it, as partners in this relationship. We do not agree on everything but divergence from particular US foreign policies is nothing new for the United Kingdom. British Governments of all political colours have at times found themselves at odds with some aspects of US foreign policy. On major post-war issues such as Suez or Vietnam, the US and UK did not agree. The Thatcher/Reagan years are often cited as a high-water mark in relations between our two countries, yet even they were not always aligned on every issue.
Turning briefly to Iran, my noble friend pointed out that this is an important relationship to retain. I acknowledge his important efforts in this regard but I also reassure him that the recent visit by my right honourable friend the Foreign Secretary to Iran was a dialogue that was both constructive and raised issues of mutual importance. Yes, we are encouraged by some of the pronouncements made by President Rouhani, particularly with some of the challenges and protests we have seen on the streets of Tehran. As we move forward, there are important parts to this relationship: good co-operation with the Trump Administration is important. For each of the policies on which we disagree there are many more we agree on.
I shall reflect on some of the points made by noble Lords during this debate. The noble Lords, Lord Ashdown, Lord Judd and Lord Robertson, spoke very poignantly of the importance of soft power. Indeed, on reflecting in preparation for this debate I was reminded that Portland Communications recently did a survey of soft power which included government assets, but also the private sector and its representations across the world—we were second on that list. That does not mean that we rest on our laurels. I saw, in my time at the Foreign Office, the important role the British Council plays. We heard from the noble Baroness, Lady Falkner, about Chatham House; I might add Wilton Park to that list. The noble Lord, Lord Ashdown, pointed out some of the challenges. He talked of population growth being a focus of foreign policy initiatives. Perhaps he should have a conversation with my right honourable friend the Foreign Secretary, who mentioned that very term but also the solution, which he feels equally passionate about. I am sure it reflects the sentiment across your Lordships’ House, about how that can be dealt with. The noble Baroness, Lady Tonge, touched on educating and empowering girls and women as part of the solution to some of the challenges that we face. Girls’ education is at the centre of that.
The noble Lord, Lord Hennessy, talked about our vital relationship with the US in intelligence. The US is a long-standing ally and I know from my time as Aviation Minister and as Minister for Countering Extremism the vital work we have done in sharing intelligence and averting terrorist incidents—those impacting our streets here in London and across the world, and those in the aviation sector. Equally, I assure the noble Lord that we work exceptionally closely with our European partners on intelligence sharing, joint operational work and sharing our experience of developing threats. It is our view that close co-operation will continue regardless of the UK’s future relationship with the European Union after Brexit.
The noble Lord, Lord Anderson, again talked about a differential with the withdrawal of aid to Pakistan. The UK and Pakistan have shared an interest in the battle against terrorism and we regularly highlight to Pakistan the importance of taking effective action against all terrorist groups: it is a constructive relationship that we believe in. The noble Baroness, Lady Tonge, my noble friend Lord Cope and the noble Lord, Lord Anderson, among others, touched on the Middle East peace process and particularly the recent pronouncement by President Trump recognising Jerusalem as the Israeli capital before any final status agreement. Let me be clear: the British government position has not changed—east Jerusalem is regarded as occupied Palestinian territory. It is our belief that the prospects for peace in the region were not helped by the pronouncement. It is important, however, to look forwards. Therefore, as the noble Lord, Lord Turnberg, also pointed out, the second part of that speech focused on the continued commitment to a negotiated two-state solution. It remains the view of the British Government that a shared Jerusalem is the way forward: a shared Jerusalem for Israel and a shared Jerusalem in the context of a viable, sustainable Palestinian state.
I turn to the global Mexico City rule that the noble Baroness, Lady Tonge, raised. It is clear that we will not agree with the US Administration on their policy, but let me assure her that the UK remains one of only a handful of international donors willing to tackle this highly sensitive issue. My noble friend Lady Helic touched on the important issues of Burma and Syria. She recognises, of course, the important work we have done, both at the United Nations and more recently at the Human Rights Council, in ensuring that this important issue—the displacement of close to 1 million people, as she so aptly and poignantly put it—is kept at the forefront of all people’s minds. I assure her that we are working very closely with the United States in this. As I have already alluded to, we continue to work closely with the United States on action against Daesh in Syria and Iraq. We will continue to work closely on this with our European partners.
My noble friend Lord Taylor talked about the importance of Israel, both in the context of the Middle East peace process and more generally. I assure him that the UK enjoys strong and growing relations with Israel, built on decades of collaboration across a range of fields, including education, business, arts and culture. That also provides us with the strength to ensure that we can have very candid conversations when we disagree. My noble friend asked specifically about trade envoys. I agree with him that they play a vital role in promoting UK trade. The Department for International Trade, which is responsible for overseeing our network of envoys, will announce any new changes as appropriate.
I recognise, as the noble Lord, Lord Alton, put it, that we also continue to deal with the US further afield. He mentioned North Korea, appropriately. I assure him that we are continuing to work very closely with the US to put maximum pressure on North Korea to change course and enter negotiations to eliminate its nuclear and ballistic missile programmes. Through the UN Security Council we have imposed increasingly tough sanctions to cut off the revenues that fund these illegal programmes. My noble friend Lord Lamont mentioned the use of sanctions. I am fresh from the Report stage of the EU sanctions Bill, which we finished yesterday and which will allow us the flexibility, through the domestic sanctions policy that we will have, to continue to work with our partners to ensure that we can impose sanctions as and when necessary. The noble Lord, Lord McNally, raised the importance of the relationship that every Foreign Secretary has had with the US Secretary of State and he talked about his own experience. I assure noble Lords that the Secretary of State, Rex Tillerson, and my right honourable friend Boris Johnson enjoy a very close, co-operative, productive and constructive relationship in this respect.
As we look forward, one of the areas which has been raised concerns the United States and the European Union. An oft-repeated characterisation, which noble Lords touched on, is our relationship with the US and how it frames our exit from the European Union—a choice between the US or the EU or between Europe and the world. As many noble Lords acknowledge, these are false choices. Yes, we are leaving the European Union, but our national interest will continue to be aligned with the interests of our European neighbours. We are still part of that continent, we still continue to enjoy strong relationships, particularly on security and our economies. I agree wholeheartedly with noble Lords including the noble Lord, Lord Wallace, who implore us to continue to do more work with Europe. We will do so but our departure from the European Union will not change the reality that global problems will require global solutions. They will require partnerships and we will always need to work with countries both near and far.
We continue to work on our relationship with European partners. As the noble Lord, Lord Ricketts, pointed out, you need only turn on the television today to see a summit taking place which underlines our close proximity with one of our closest neighbours—the closest if you look east—and that is France. The Anglo-French summit taking place today with President Macron again underlines the importance of our relationship across many areas, including stronger economies, our defence relationship and other areas of mutual interest. We will continue to work on those relationships. At the G7 summit in May the Prime Minister took the lead on engaging the US and European countries to co-operate on countering online extremism. That remains a priority on which we work collectively with our European partners.
The noble Lord, Lord Robertson, talked about soft power. If we look down the list of countries, as I said, we are second only to France. Interestingly, the United States ranked third in that survey. The noble Lords, Lord McNally and Lord Wallace, also talked about trade and the definition of global Britain. Let me assure the noble Lord, Lord Wallace, that the three circles remain alive and well. They are very prosperous.
As Minister for the Commonwealth I am sure that all noble Lords are looking forward to the Commonwealth Summit and Heads of Government Meeting in April. It will not replace the European Union or the UN, but it is an incredible network. My noble friend Lord Howell speaks passionately, and rightly so, about the Commonwealth relationships. We enjoy similar legal systems, education systems and languages. It is important we leverage those across the four important areas of sustainability, security, prosperity and fairness. I look forward to working with noble Lords in strengthening our role across the Commonwealth.
The noble Lord, Lord Robertson, talked about the FCO budget. I can assure him that, in the government spending review, the FCO’s non-ODA budget was fully protected. As we have also heard, we are working in closer alignment with colleagues in DfID, through common-aligned objectives in our development policy. Indeed most recently, along with Defence Ministers and the Secretary of State for International Development, we launched a new document looking at women, peace and security around the world and at our international partners. The document underlines the importance of global Britain in that area. Let me reassure the noble Lords, Lord Robertson, Lord Ricketts, and Lord McNally, about the role of the FCO in its diplomatic efforts and its embassies, which play an incredible role together with our high commissions. That will continue to be the case.
The noble Lord, Lord Hylton, asked questions about national resistance movements and sanctions against Syria. On the latter, without going into too much detail, those sanctions will remain in place with the regime until we see a move away from President Assad. On resistance movements, I think history tells us—albeit depending on what the notions and government structures are—that the first and primary objective must be that they must cease violence. They must put down weapons and recognise those around them as legitimate partners towards peace. I will write to him specifically on the observations he made.
My noble friend Lord Howell, among others, raised the important issue of changing global relationships. We can talk of relationships with China or India, and the Government continue to strengthen our work in this respect. As my noble friend pointed out, technology advancement, changing positions, population growth, changing dynamics, businesses, education—all these things are changing the world. That is what global Britain is all about: repositioning ourselves to ensure that we strengthen the new relationship we will have with the European Union; strengthening and continuing to build on our relationship with the United States; and recognising—through the Commonwealth and other bilateral relationships—the importance of building and developing prosperity, trade and relationships across the world.
The noble Lord, Lord Kerr, spoke in the gap, quite rightly, on the concept of trade and touched on the WTO. Let me assure him that the UK will remain steadfast, notwithstanding any challenges, as a champion of free trade at the WTO and in establishing the UK’s future independent trade policy. As we leave the European Union, we will continue to work closely with WTO members, including the US, to ensure a simple, fair, transparent transition for all parties, that minimises disruption to our trading relationships with other members.
In conclusion, the UK Government have engaged historically, and will continue today and in the future to engage, with the US Administration, issue by issue, policy by policy. It is a strong, productive, important relationship, and we will continue to work as we have always done. We will use every tool of friendly co-operation and influence to persuade the US Administration of the benefits of working for our common interests. That allows us to have those candid conversations when we disagree. As we have always done, we will continue to cherish and nurture our close relationship with the US. It is a relationship based on shared history—as the noble Lord, Lord Collins, said—and on shared fundamental values and shared interests. It is a relationship that transcends personalities and party politics—a relationship that matters hugely to both our countries, and which has been a driver of peace and prosperity for many, many decades. This relationship is as important today as it ever was before. In an age of geopolitical turbulence and uncertainty, it is a relationship that I believe—and I am sure it is a sentiment expressed by all noble Lords—will endure the test of time and endure long into the future.
Finally, I once again thank the noble Lord, Lord Ashdown, and all noble Lords who have contributed to this important debate. As ever, as a Minister responsible in this House for foreign affairs, I am for ever enlightened and informed.
Sanctions and Anti-Money Laundering Bill [HL]
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Lord Collins of Highbury (Lab)
My Lords, my name is attached to Amendment 74, and of course to Amendment 71A. I will not repeat what the noble Baroness, Lady Bowles, said on Amendment 74, but this demand has been made for some considerable time. It is important that we act to ensure that all players involved in such criminal activity are brought to justice. That was reinforced by the Serious Fraud Office, too. On Amendment 71A, I concur wholeheartedly with the noble and learned Lord, Lord Judge, but the noble Lord, Lord Pannick, hit the nail on the head. On Monday this House spoke very clearly on this principle. It is of concern that the Minister, who has been in effective listening mode on a lot of the amendments, particularly in this group, has not reflected properly on Monday’s decision. How do we constrain these powers, as the noble Lord, Lord Pannick, said? If the Minister is not prepared to say how he will do that, I have no doubt that this House will speak with the same voice as it did on Monday.
The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, the opening line here says “I wish to thank noble Lords for putting forward this amendment”. I am not sure whether that best reflects the sentiments of the House. However, as I have said before, I deeply appreciate that this is a matter of great interest and concern to many in your Lordships’ House. In proceeding, I hope that in part I can reassure noble Lords that the powers in the Bill are taken with the utmost regard to your Lordships’ concerns. In the wider context, I also thank noble Lords for the practical, helpful and constructive engagement we have had. As a government Minister, I always approach legislation with the view that there will be times when we will disagree, but equally, we disagree with great respect to the House and to the incredible experience and wisdom in it. Where we are unable to agree, that does not mean that we have not listened. The Government’s position is a listening one, as the noble Lord, Lord Collins, said, and as we have demonstrably shown on both parts of the Bill. I also thank the noble Baronesses, Lady Kramer and Lady Bowles, for the constructive engagement we have had on the anti-money laundering aspects, and I am grateful for the key co-ordination role—I hope she will not hold this against me—that the noble Baroness, Lady Northover, played on this. I also very much appreciated the expertise that the noble Baroness, Lady Bowles, in particular, brought to this group.
Amendment 71A seeks to prevent regulations from making provisions that create new criminal offences. It is not unusual for requirements to be set in delegated legislation which can be enforced using criminal penalties, both in financial services legislation and other regimes such as health and safety. As I am sure all noble Lords are aware, in accordance with standard practice when implementing EU directives, criminal offences in this area have already been created in delegated legislation, in the Money Laundering Regulations 2017, made under the powers given by the European Communities Act 1972. This was also the case in their precursor, the Money Laundering Regulations 2007, which were brought into force—notwithstanding the contribution made by the noble Lord, Lord Collins—by the then Labour Government. The Bill therefore makes no changes to the current position in this sense and reflects the Government’s firm intention to continue imposing criminal penalties for breaches of anti-money laundering requirements.
These detailed provisions, setting standards and procedures for regulated businesses, should also be seen in the context of a separate penalty regime for the key substantive money laundering offences. Such offences are established under Part 7 of the Proceeds of Crime Act 2002, which provides for more punitive prison sentences of up to 14 years—for example, for those guilty of directly laundering the proceeds of crime.
The Government’s view is that removing their power to create criminal offences under secondary legislation would seriously weaken the enforceability of new regulations and therefore lower the effectiveness of the UK’s anti-money laundering regime.
Viscount Hailsham
Will my noble friend explain to the House why he is impliedly asserting that he cannot use primary legislation for this purpose?
Lord Ahmad of Wimbledon
As I have indicated, this is not a departure from what already exists. I have already quoted previous Acts and talked about the ways in which Governments of different political colours have used secondary legislation in the past for this purpose.
More generally, noble Lords may recall that it is not unusual for requirements, which can be enforced using criminal penalties, to be set in delegated legislation. In response to my noble friend, in the area of financial services, for example, the Regulated Activities Order under the Financial Services and Markets Act 2000 specifies which activities are or are not regulated. Carrying on such activities without permission from the regulator is a criminal offence.
I assure noble Lords that I am sympathetic to the arguments on the constitutional position, and I say to the noble and learned Lord, Lord Judge, that I have listened very carefully to his contributions—we have had positive engagement on various parts of the Bill. However, as I have indicated, it remains the Government’s position that it is neither unusual nor improper for Parliament to confer powers of this type on Ministers, as we have done previously and has been accepted. I shall turn to the appropriate safeguards relating to these powers in a moment.
I would like to set out why the ability to create criminal offences specifically for the UK’s anti-money laundering regime is necessary. When the Government consulted on whether to remove the specific criminal offence provisions in previous money laundering regulations, the British Bankers’ Association stated that removing such provisions would be at odds with the objective of driving an effective anti-money laundering regime. Furthermore, the Crown Prosecution Service argued that provisions for creating criminal offences in the money laundering regulations different from those in the Proceeds of Crime Act 2002 serve a separate and useful function in tackling money laundering. In some instances, prosecuting according to the Proceeds of Crime Act 2002 could jeopardise ongoing investigations. It said:
“In such cases, the ability to prosecute for a regulatory offence relating to defective”,
anti-money laundering or counterterrorist financing,
“systems can be an important tool”.
Finally, in response to the same consultation, HMRC noted that abolishing criminal sanctions for breaches of regulations “carries significant risk” to its ability to tackle money laundering. In lieu of such sanctions, if the UK wishes to maintain a functioning anti-money laundering and counterterrorist financing regime post our departure from the European Union, it is vital that the Government continue to have the power to create criminal offences for those regimes.
As the noble Baroness, Lady Bowles, pointed out, there are other amendments in this group. Amendments 90 and 92 envisage the same effect as that of Amendment 71A. Amendment 90 aims to prevent future regulations containing provisions to create new criminal offences, while Amendment 92 deals with provisions relating to penalties for such offences. As I set out to noble Lords previously, removing the Government’s ability to create criminal offences would seriously weaken the enforceability of new regulations, thereby, we believe, lowering the effectiveness of the UK’s anti-money laundering regime.
Amendment 72 proposes to restrict the scope of anti-money laundering regulations in several ways. First, it aims to prevent the making of regulations that are detrimental to the UK’s anti-money laundering and counterterrorist financing regime. Secondly, it aims to ensure that future regulations prescribe measures which are duly proportionate. Thirdly, it seeks to ensure that regulations cannot create new criminal offences, and, fourthly, it makes provision restricting the ways in which powers in the Bill can be used to update the definition of “terrorist financing”.
I have stressed from the Dispatch Box many times that the Government are listening to concerns expressed by noble Lords about the aims of these regimes, the need for a proportionate approach and the best way to keep definitions up to date. I am pleased to be able to confirm to the House that, having engaged directly with noble Lords on this matter, we will be tabling new amendments for Third Reading which aim to address the concerns contained within limbs (a) and (b) of Amendment 72. I have set out my position on criminal offences in relation to limb (c), and so do not propose to repeat that. I can further confirm that the Government will seek in the other place to restrict the ability to add to the definition of “terrorist financing” in Clause 41. This was also something that we discussed very constructively. I assure noble Lords that it will be limited to cases where any relevant regulations under Clause 1 are for the purposes of compliance with UN or other international obligations or to further the prevention of terrorism, or both. I hope that this is sufficient reassurance to enable the noble and learned Lord not to press this amendment so that we can table amendments and engage constructively with those issues again at Third Reading.
Amendment 74 proposes to create a corporate criminal offence of failure to prevent money laundering. The effect of this amendment would be to provide that a company or partnership is guilty of a criminal offence in cases where the company’s employee, agent or other service provider commits one of the substantive money laundering offences contained in Part 7 of the Proceeds of Crime Act 2002. The relevant company would have a defence if it could prove that it had adequate procedures in place to prevent its employees and agents from committing such an offence.
I would like first to note that, as noble Lords may be aware, in 2017 the Ministry of Justice carried out a call for evidence on corporate criminal liability for economic crime, such as money laundering, fraud and false accounting, to establish whether further reform of the law was necessary. Noble Lords will accept that this is a complex and controversial area of the law, attracting views from across a broad spectrum. Responses were received from a wide variety of stakeholders and expressed diverse and often conflicting views, as well as raising several important issues that need careful consideration. As I have told the House when dealing previously with this Bill, the Government’s response is being finalised and will be published in due course. I hope we can agree that it would make no sense to muddy the waters by introducing a further failure to prevent offence before there has been a proper review of the evidence.
I emphasise and assure noble Lords that there is no gap in the regulatory regime for financial services that would be addressed by the introduction of a failure to prevent offence for money laundering, which was a concern expressed. The senior managers regime requires that relevant financial services firms, such as banks and building societies, allocate a senior management function for overseeing the firm’s efforts to counter financial crime, including money laundering, to a specific senior person.
The requirement to maintain this role is in addition to the requirement for a money laundering reporting officer, or MLRO, who is directly responsible for ensuring that measures to combat money laundering are effective. Noble Lords may wish to note that the MLRO has a personal responsibility for the oversight of the firm’s compliance with Financial Conduct Authority rules on anti-money laundering systems and controls.
The senior managers regime is robust in the additional requirements it places on senior managers responsible for overseeing firms’ defences against financial crime. Such senior managers are required to obtain pre-approval as fit and proper from the Financial Conduct Authority and the Prudential Regulation Authority. If there is a contravention of the money laundering reporting requirements by a firm, the Financial Conduct Authority can take action against the responsible senior manager, if they can prove that they did not take such steps as a person in their position could reasonably have been expected to take to avoid the contravention occurring. This enforcement action includes fines and disbarment from undertaking regulated activities.
The senior managers regime currently applies to banks, building societies, credit unions, Prudential Regulation Authority-designated investment firms and UK branches of foreign banks.
The Government have legislated for it to apply across all financial services firms, and this will be implemented in due course—the regulators have been consulting on the final design of this extension of the regime. The introduction of the senior managers regime has significantly enhanced the ability to hold individuals responsible for failures of the systems and controls of relevant firms. Its expansion across the financial services sector will do more in this regard.
Lord Higgins (Con)
I am extremely grateful to my noble friend. It is quite clear that the grouping of these amendments is not a convenient way of proceeding. I understand that my noble friend has given careful thought to the wide range of issues covered by the amendments, and I understand that he is saying that he will make further changes to the Bill at a later stage. What I am not clear about is whether any of these will cover the points made by the noble and learned Lord, Lord Judge, in his opening remarks. Perhaps my noble friend will clarify that.
Lord Ahmad of Wimbledon
My noble friend is right to raise the point and I admire all noble Lords who have followed the thread. The reason I have gone into detail, as my noble friend has articulated, is that the range of amendments in this group is quite extensive. Also, as I have said before, it reflects the importance of the discussions we have had.
On the specific issue of Amendment 71A, on this occasion I regret that we are unable to meet the views of the noble and learned Lord. However, I hope that I have indicated at least in part that this is not a departure from the existing system. Indeed, it is something which has been applied previously and continues to be so. I hope, therefore, that I have convinced noble Lords that the Government’s proposed changes—aside from the differences set out by the noble Baronesses, Lady Kramer and Lady Bowles, which we have talked about and I appreciate and acknowledge—will ensure that proper safeguards are put in place in the Bill regarding offences, rather than removing the ability to create them and leaving a vacuum that we believe would weaken the UK’s anti-money laundering regime.
I hope also that I have convinced at least some noble Lords—I am looking behind me as well as ahead; it does not say that in my speaking notes. I have gone into detail but I believe that it was necessary to do so since, as I have always said, this is an important Bill. With those reassurances, I hope that noble Lords who have tabled amendments in this group will be minded to withdraw them.
Lord Mackay of Clashfern
Just before my noble friend sits down, can he help me on one point? There is already authority to make regulations in respect of money laundering which have criminal sanctions. If so, why is another provision to the same effect necessary? Can he help us further by explaining why it is necessary to do this not only for money laundering but in other areas where authority in primary legislation already exists to lay statutory instruments?
Lord Ahmad of Wimbledon
What I have been saying in the examples I have quoted is that the use of the regulations is not something new.
Baroness Kramer
Perhaps the Minister could confirm that at present, the primary legislation takes place in Europe through the various processes of the European Parliament and Council. It is from those that the current regulation flows. The issue here is that in the future, there will be no mechanism for primary legislation to sit behind the regulation; it will be the regulation disembodied.
Lord Ahmad of Wimbledon
The noble Baroness has correctly pointed out that all this is to do with what we do after we leave the European Union, which I have sought to make clear to my noble and learned friend. We will set up the mechanism and put in place the provisions to allow the Government to address the issue of criminal offences. The Government’s proposal would be to continue on the same basis as we do now—through the use of regulatory powers. As I indicated earlier, this is not different. I have also stressed that this would be subject to the affirmative procedure, which would allow for debates in both Houses. We covered that area extensively both at Second Reading and in Committee.
Lord Collins of Highbury
My Lords, I do not want to take up too much time. The noble Baroness, Lady Stern, made an incredibly powerful speech in support of her amendment, to which I added my name. I want to say something in relation to setting international standards and trying to reach international agreement. Ultimately, that is the correct way. It is the solution. But there are many ways of achieving that. David Cameron realised that, actually, setting the standards and taking the lead is the way to reach international agreement—not sitting on our hands and saying, “Let’s see what others do first”. We need to take the lead and set the standards. When we talk about reputation, it is our family of nations that will suffer reputationally if we do not adopt this amendment tonight.
Lord Ahmad of Wimbledon
My Lords, I am grateful to all noble Lords who have taken the time to contribute to this important debate. The amendment would require the Secretary of State to provide all reasonable assistance to the Governments of certain of the British Overseas Territories with significant financial centres to enable each of those named overseas territories to establish a public register of company beneficial ownership. It further provides that, if by 1 January 2020 such overseas territories have not established such a register, the UK Secretary of State should take all reasonable steps to ensure that the Privy Council legislates to require the overseas territory to do so.
I am again grateful to the noble Baroness, Lady Stern. We have had a constructive discussion where we laid out the differences over our approach. I do not object to the fact that we are all seeking—that is clear from all contributions today—to ensure fairness and transparency but also to do the right thing to ensure progress in this regard. I appreciate that the deadline set in this revised amendment for preparation of an Order in Council has been put back by one year compared with the amendment tabled by the noble Baroness and others in Committee. I previously addressed many of these points in Committee. But I hope that the House will bear with me if I reiterate certain key points.
I first want to inform noble Lords of the commitments that the territories have made to advance transparency in the company and tax fields. We heard the noble Baroness, Lady Kramer, talk about taking leadership, having that relationship and allowing the British Government to work with the overseas territories and that this amendment is the way to achieve that. But we are already doing it. The overseas territories are part of my responsibilities as a Minister. They are totally engaged on this agenda. With respect, the noble Baroness laid out a series of assertions on how money laundering and certain activities occur. Is it right that these six territories alone are singled out? Where is the evidence base? That is important, but so is the action that is being taken. We need to focus on that.
For example, the overseas territories with financial centres are leading the world. They are among the early adopters of the OECD common reporting standard. I say to the noble Lord, Lord Collins, that the overseas territories, working with the British Government, are taking the lead. There is an agreement under which they automatically exchange offshore financial account information with taxpayers’ jurisdictions of residence. They started exchanging information with third jurisdictions in September last year. I join many noble Lords in the Chamber in commending our previous Prime Minister, David Cameron, and the steps that he took. But the process that we are now following is exactly the same process that was agreed during the coalition years with the Liberal Democrats. Since September 2016—in other words, a year before the common reporting standard came into effect, so I say to the noble Lord, Lord Collins, that this is another example of taking the lead—HMRC has been receiving data on accounts held in the overseas territories by UK taxpayers and has used this to further its compliance work.
The issue of public registers is relevant here. None of this means that we do not want to see the overseas territories take further action to move forward on the transparency agenda. We should, however, acknowledge the significant steps that they have already taken in this area and build incrementally on that progress, in partnership and with support.
As noble Lords will acknowledge, the UK is at the forefront of promoting corporate transparency. The UK is the only G20 country to have fully established a public register of company beneficial ownership and we continue to push for this to become—in the words of the noble Lord—a global standard. As I noted in Committee, however, the international standards set by the Financial Action Task Force do not require this, reflecting a lack of international consensus in this area. I am grateful to noble Lords who contributed on this. These standards state:
“Countries should ensure that there is adequate, accurate and timely information on the beneficial ownership and control of legal persons that can be obtained or accessed in a timely fashion by competent authorities”—
for example, tax authorities and law enforcement authorities. The OTs are moving ahead on this agenda. Nevertheless, should public registers become the global standard, we would of course expect the overseas territories and Crown dependencies to meet this standard. The territories themselves have indicated their willingness to adopt a public register in that event.
I will highlight something important to this debate: namely, the progress that the overseas territories have already made on the beneficial ownership agenda in a relatively short time. Since we concluded our arrangements with them in the run-up to the Anti-Corruption Summit of 2016, the territories, which have their own legislative bodies and elected representatives, have passed new primary legislation and delivered technological improvements to comply with the terms of the arrangements known as the exchange of notes. I am grateful to my noble friends Lord Leigh and Lord Flight for highlighting the positive progress that the OTs have made in this respect. My noble friend Lord Naseby also pointed to the positive steps taken by Cayman.
Under these arrangements, each of the overseas territories with a significant financial centre committed to hold beneficial ownership information in a central register or a similarly effective system and to provide UK law enforcement authorities with automatic access to such information within 24 hours of a request being made—or within one hour in urgent cases. These arrangements, which have been put in place since 2016, are already bringing benefits to UK law enforcement. They mark a significant increase in the ability of UK law enforcement authorities to investigate bribery and corruption, money laundering and tax evasion. I am sorry that I do not share the opinion of the noble Baroness, Lady Kramer, that somehow these law authorities are very limited in scope. They make an incredible contribution.
Baroness Kramer
Perhaps I might ask the Minister a question. Does he not agree that one reason we have public registers in the UK is that law enforcement authorities here said that they could not successfully track down those crimes if they were not backed by public register arrangements? If we in the UK cannot be effective as law enforcers without public registers, how will we be effective as enforcers across the sea without public registers?
Lord Ahmad of Wimbledon
I have already said—and I repeat to the noble Baroness—that the OTs are already moving in this direction. I will put it very simply and in context. We have agreed legislation in both Chambers. We have passed it. We have had anti-corruption summits. We have asked OTs to step up to the mark. They are stepping up to the mark. They are taking the action required. Half way through the process, before we have even tested the very objectives that the noble Baroness has just outlined, we say to them, “Sorry, we’re changing the rules”. That to me is unacceptable.
Lord Collins of Highbury
My Lords, I agree with all the sentiments that have been expressed. This is about a very strong commitment given by David Cameron, and what we want to hear from the Minister is a clear timetable. The noble Lords, Lord Faulks and Lord Hodgson, are absolutely right. In the previous debate we talked about transparency and those who pay. On this issue, it is not just those in the poorest countries who are paying because of this hidden money; it is our own communities. I have said before in this Chamber that to look down the river and see a skyscraper that is 60% foreign-owned, with 40% of that ownership hidden through companies, is clearly scandalous. We do not have to look far. So we need action and a very clear timetable. I hope the Minister will give us that timetable tonight.
Lord Ahmad of Wimbledon
My Lords, this amendment seeks to set down in legislation the commitment made at the 2016 anti-corruption summit to establish a public register of company beneficial ownership information for foreign companies that already own or buy property in the UK or that bid on UK central government contracts.
As we have readily acknowledged in various debates during the passage of this Bill and others, the UK is a world leader in promoting corporate transparency. As I said in the previous debate, we are the only country in the G20 to have established a fully publicly accessible company beneficial ownership register. I assure noble Lords that the Government are committed to leading the world in improving this transparency.
First—and here, I refer to my noble friends Lord Faulks and Lord Hodgson but also to noble Lords across the House—I know this issue has been debated and discussed through various vehicles. I congratulate them on ensuring that the Government remain accountable and the issue remains in the public eye. Let me assure my noble friends and all noble Lords that the Government appreciate the work that all have done in this respect, particularly my noble friend. I assure him that we share his desire, the desire expressed by all noble Lords, to reduce the opportunity for money laundering through UK property as swiftly and effectively as possible. We all acknowledge that it is a serious issue, so let me address that question head-on.
First, what has happened? Following last year’s call for evidence, the Department for Business, Energy and Industrial Strategy sent more than 100 pages of drafting instructions to the Office of the Parliamentary Counsel, and work preparing the clauses for the Bill is under way. The drafting instructions prepared so far cover just the application of the land registration elements of the policy in England and Wales. Once the clauses for England and Wales are complete, an exercise will be undertaken to make specific provision for how they will apply in Scotland and Northern Ireland, both of which have different land registration systems and their own Land Registries. The approaches taken to land registration and overseas entities by the Land Registries have differed until now, so all three approaches will need to be brought together to deliver a streamlined policy, consistent across the UK. I anticipate that exercise taking some months and it will involve expertise from many different teams across the UK Government and the devolved Administrations.
The department has also commissioned a piece of research on potential impacts of the policy, including on investment decisions. That research is ongoing and will feed directly into an impact assessment, work on which is also under way. I am sure my noble friend will agree that this is a crucial moment for the UK’s future trading relationship with the rest of the world, and we must proceed with as good an understanding as possible of the potential impacts on legitimate inward investment.
Having brought noble Lords up to date with the Government’s work so far, let me turn to our next steps. Since our last debate on the matter in Committee, the Government have considered carefully the proposals in front of us and had detailed discussion with my noble friend in this regard. Noble Lords were quite right to point out that the anti-corruption strategy published last month stated that we would publish a draft Bill during the current Session of Parliament. Doing so will help to ensure that any potential weaknesses in the policy are spotted and addressed in what will be new and complex legislation.
Let me now provide some of the certainty requested by my noble friends Lord Faulks and Lord Hodgson. I can confirm that we will publish the draft Bill by the Summer Recess this year. I can also confirm that formal introduction of the Bill will be a priority for the second Session of this Parliament. We anticipate that being in summer 2019, and doing so will put us on track to implement the register itself, which will be operational by early 2021. I further recognise noble Lords’ concern for greater certainty of the Government’s intention. We will shortly formally confirm our intention to meet these deadlines—a point mentioned by the noble Lord, Lord Collins—through a Written Ministerial Statement. We will continue to look at both legislative and delivery timetables for opportunities to implement sooner if at all possible.
Let me say why publishing a Bill in draft is the right approach. As I have said before, the register will be first of its kind in the world and will affect people’s property rights. A robust enforcement mechanism will be essential. As set out in last year’s call for evidence, the Government believe that criminal sanctions may not be sufficient in isolation, but that additional enforcement through land registration law will also be needed if the register is to have teeth. A key proposal is that those who own property who do not comply with the register’s requirements will lose the ability to sell the property or create a long lease or legal charge over it. This will be reflected in a restriction on the register of title.
I am sure that my noble friend will recognise that these are significant steps and will constitute a robust enforcement mechanism. As such, the regime must be able to withstand legal challenge from those who have the means and motive to make such a challenge. That is a key reason why delivering the register through dedicated primary legislation, in accordance with the will of Parliament, is preferable to doing so through secondary regulations to the Bill we are debating today. It is also the key reason why this House should welcome the fullest possible scrutiny of the draft clauses and the mechanisms behind a regime which will be a world first.
But that is not the only reason. New functions must be delegated to Companies House and the land registries, and we must ensure they have the tools and time needed to deliver this successfully. A protection regime must be established, balancing legitimate concerns for personal safety with the need for transparency. All those issues were considered in last year’s call for evidence, but only once we can scrutinise the draft clauses can we really stress-test whether they are going to be effective. We anticipate there being in excess of 50 clauses in the Bill.
Let me say why early 2021 is the appropriate timescale. First, it is because a dedicated primary Bill is the right way of delivering such a policy, and that will take time, given other pressures on Parliament at present. The Government will therefore introduce legislation as soon as possible, but it is impossible for me to make commitments to do so in the very near term—and I have already indicated the specific timetable, which will also be qualified in the Written Ministerial Statement.
Secondly, it is appropriate because that must be followed by secondary regulations, in which we will set out the more technical details underpinning the regime, such as the essential changes needed to the land registration rules. New systems must also be built between Companies House and the three land registries. Their design will depend on the precise content of those regulations. While much preparatory work will be done while the legislation and secondary regulations are passed, there are some inevitable lead times, because the systems and processes can be finalised only after Parliament has approved the legislation.
Finally, an appropriate transition period will be needed to ensure that lenders and other stakeholders can adjust to the new requirements. We believe that the policy must be robust, but fair. Overseas entities that have bought property in the UK, in some cases many years ago, will not have had this in their contemplation at the time. In most cases, the property will have been bought for legitimate and innocent purposes and by those who expected the degree of privacy offered by ownership through a legal entity. We should give those entities, and their beneficial owners, time to understand the requirements and consider their options.
There is a parallel with the development of the register of people with significant control. That policy was announced in 2013, following several rounds of consultation and primary and secondary legislation, and a fully populated register was delivered by June 2017. It may have taken four years, but it still put the UK’s framework in a world-leading position. The new register will take a similar path, but there are numerous additional considerations.
I hope that the detail that I have outlined and the timetable that I have given provide the House and my noble friend in particular with the reassurance of the Government’s continued commitment to enact this policy. But to go slightly further, my intention is also to bring forward an amendment on Third Reading to require the Government to provide regular updates to Parliament on progress on the timetable that I have outlined.
I hope that my noble friend feels that we have had a productive engagement and that what I have offered today from the Dispatch Box are not just warm words but specifics. For those reasons, I hope that he is minded to withdraw his amendment.
Lord Faulks
My Lords, I am grateful to all those who have spoken—and, indeed, to many others who might have spoken but who exercised restraint on this matter. I am also very grateful to my noble friend the Minister for giving, for the first time, an actual timetable for this legislation. A number of queries have provoked soothing words and not much else. We now have a timetable, although it is not happening as fast as many of us would like—but he has explained in some detail the difficulties involved in setting up this register.
I would have been a little more impressed had this been the first time that this issue was raised. We are talking about an undertaking by the Government in 2016, so with respect I should have thought that much of this could have been done a great deal earlier. For example, why do we need to commission an inquiry into the danger of inward investment being put off from coming to this country when the whole idea is to stop inward investment of corrupt proceeds from Russia and the like? I found that one of the less impressive parts of the reassurance given by my noble friend.
My noble friend cites the difficulty of setting up the register and uses the fact that the previous register of persons of significant control took four years to set up. My response to that is that, presumably, a great deal of the work that was done in setting up that register would enable a great deal of piggy-backing to go on in setting up this register—something of a dry run, I should have thought. However, despite that minor carping on my part, I want this legislation to succeed and I want the obscenity of having our property market corrupted to be stopped—and I want it done effectively, as I am sure other noble Lords do.
Lord Lennie (Lab)
My Lords, in Committee, the Minister—I think it was the noble Lord, Lord Bates—said that the OPBAS is being set up to deal with this stuff at some time in the future. I do not know when that will be and whether it is a consequence of our withdrawal from the European Union or is a separate matter. However, I would expect reassurance that that body will be up and running at least by the time that we leave the European Union, if and when we do so. Of the 250,000 companies to which the noble Lord, Lord Naseby, referred, thousands open and shut before anyone has had a chance even to notice them. Presumably, they do not always open and shut because they go bust but rather because they are concealing their activities. That needs to be addressed. I do not intend to prolong the proceedings other than to say that—I did not think I would ever say these words—I support the amendment of the noble Lord, Lord Naseby.
Lord Ahmad of Wimbledon
My Lords, I say to the noble Lord, Lord Lennie, that I often find myself in agreement with my noble friend. I very much appreciate the spirit behind this amendment, which would require anti-money laundering checks to be undertaken before any UK company can be incorporated by preventing the Registrar of Companies registering a company unless they are satisfied that such checks have been carried out. The amendment goes on to say that the registrar is entitled to accept the anti-money laundering registration number of the UK body that has submitted the application. The effect would be to require all incorporations to be made through a UK body that is regulated for anti-money laundering purposes.
In Committee, the Government made a number of points about the effect of requiring Companies House to operate in the same fashion as company formation agents. My noble friend Lord Naseby has clearly reflected on the points made, and the amendment responds to our concerns by allowing Companies House to accept the anti-money laundering registration number of the UK body making the application. However, this would still prevent people incorporating companies directly with Companies House and would therefore make company formation only possible via an agent that is also a registered money laundering supervisor. In doing so, it will end the current streamlined service offered by the Government under which companies can incorporate directly at Companies House and register with HMRC for certain taxes, such as corporation tax, as part of the same process.
The Government also recognise that there are sincere concerns here, which my noble friend outlined. We have listened to them, and I hope that I can set out some detail of what conclusions we have drawn thus far as a result of considering them. Before I do so, I will make one practical point. As my noble friend will be aware, the UK’s anti-money laundering regime will be evaluated by the Financial Action Task Force in March of this year. We expect the report to be made public in late 2018. This review will explicitly cover the effectiveness of how the UK prevents the misuse of legal persons such as companies for money laundering or terrorist financing. The Government have already provided extensive documentation to the FATF team conducting the review, which will be followed up by the team conducting an on-site visit within the UK. This will greatly inform the future of the UK’s anti-money laundering regime, including on the important point my noble friend made on how we can best prevent the misuse of legal entities. It will therefore be of great assistance in moving forward in this area and many others.
Following the FATF evaluation, which will report back later this year, the Government will actively consider areas where the AML/CTF framework can be improved. I can also confirm that the Government will look in particular at controls over who registers companies in the UK, what information they have to provide, and how assurance is provided over that information, which were concerns highlighted eloquently by my noble friend.
It is of course absolutely right that we should take steps, as was pointed out in Committee, to avoid corporate vehicles being used for money laundering. However, it is equally important that we balance tackling illicit finance with proportionate regulation for what I know all noble Lords acknowledge is the vast majority of legitimate businesses. The UK rightly prides itself on being one of the easier countries in the world to set up and run a business, and we are ranked in the top 10 countries for doing so. To register a company at Companies House is not in itself a suspicious act, which I know my noble friend acknowledges. It is a strength of our system that people can set up an off-the-shelf company or can incorporate online at little cost. This is particularly relevant to our smaller businesses sector and those starting businesses for the first time. I am sure that all noble Lords acknowledge that it is of great benefit to our economy and encourages a more entrepreneurial culture in the UK as a whole.
I am sure that my noble friend acknowledges that a newly formed company is not itself a money laundering risk; it must carry out some other transaction to achieve an illicit purpose. When a company undertakes an activity that may increase the risk of money laundering activities—for example, by opening a bank account—at that stage it becomes subject to quite stringent due diligence measures. Regulated firms, such as banks, solicitors and accountants, are also then required to conduct due diligence on existing customers on an ongoing, risk-sensitive basis.
I am sure that noble Lords will also acknowledge that the cornerstone of our anti-money laundering system is taking a risk-based approach. Indeed, anti-money laundering supervisory authorities are under a legal obligation to identify and assess the international and domestic risks of money laundering and terrorist financing to which its sector is subject. This ensures that the most intensive levels of supervision are applied to those entities which present the highest risks of money laundering.
I have outlined the steps we are taking and pointed out that we are awaiting the FATF evaluation, and I confirmed the important point that after the evaluation the Government will look at controls over who registers companies in the UK. I also say to my noble friend that I would very much look forward to working with him and appropriate Ministers from the BEIS department to see how we can perhaps reflect some of the key points he raised in any subsequent action the Government will take in the light of that report. With those reassurances, and acknowledging the important work he has done in this respect, I hope that my noble friend will be minded to withdraw his amendment.
Lord Berkeley of Knighton (CB)
My Lords, perhaps someone who is not well versed in the law could make an observation. I support my noble and learned friend Lord Judge and would say simply that the strength and logic of what we have heard from many noble Lords in this debate is absolutely compelling. Furthermore, the supremacy of Parliament surely rests in taking notice of his remarks along with those of my noble friend Lord Pannick and the noble Viscount, Lord Hailsham. It is imperative that we move through legislation on a primary course rather than a secondary one.
Lord Ahmad of Wimbledon
My Lords, I thank all noble Lords who have taken part in this debate. Let me say at the outset that between Committee and Report we have considered many matters raised by noble Lords. I listened very carefully to the points made by the noble and learned Lord, Lord Judge, and others, although I felt at one point, after hearing the contributions of my noble friend Lord Hailsham and the noble Lord, Lord McNally, that I should be handing over the Bill file to my noble friend Lord Young. I notice that he has escaped before I could avail myself of that opportunity.
Lord Ahmad of Wimbledon
I am sure, though, that the noble Lord will agree that I have a very formidable Whip to my left. I am delighted to be joined by my noble friend Lady Goldie, who I can assure noble Lords is very well equipped in the robust defence of the position and policy. However, I am sure noble Lords will understand that I cannot accept this amendment but I will offer some comments in this regard.
First, the power in the Bill is not unusual. It is worth noting, indeed, that the Delegated Powers and Regulatory Reform Committee, in its report on the Bill, made no comment on the inclusion of this delegated power. However, I recognise that the House has concerns, reiterated today, about the breadth of the regulation-making powers conferred by the Bill and I hope I can provide some reassurance that this particular consequential power is both appropriate and necessary. Importantly, the power can be used only to make savings provisions or other provisions that are consequential, supplemental, incidental or transitional to the sanctions or money laundering regulations. I assure noble Lords that it does not confer the power to make any changes to legislation that are independent of the sanctions and money laundering powers. It provides a tool to make changes to ensure that the statute book works but it does not give the Government the ability to change swathes of legislation without regard to that specific purpose.
Specific questions have been raised in this respect and, rather than detain the House, I shall offer those reassurances at this point. The noble and learned Lord, Lord Judge, and my noble friend Lord Hailsham both raised the issue of the substance. I believe the phrase, which is not the most legal of terms I have heard from the noble and learned Lord, was “nothing to bite on”. I will look up the constitutional books in that respect, but of course I understand the substance of his point. Let me assure the noble and learned Lord that the regulations in the Bill can be made only for the purpose set out in the Bill and impose sanctions of the type set out in the Bill. This clause permits only amendments consequential on the types of sanctions imposed for these particular purposes.
The noble and learned Lord also made a general point about Henry VIII powers. I assure him that they are there to serve a real purpose: to enable Ministers to make the necessary updates to the statute book that arise solely as a result of the sanctions and money laundering regimes.
My noble friend Lord Hailsham raised the list of uses of this power. I assure him that this can be used only to make amendments that arise as a consequence of the imposition of sanctions or rules against money laundering and not to make free-standing changes; for example, to change rules of evidence in an unrelated case. Finally, the noble Lord, Lord Pannick, rightly raised the issue of the courts and scrutiny, and how courts will police the use of these powers. I can say on behalf of the Government that we welcome and respect the scrutiny of the courts: they act, indeed, as a check on Ministers, as a useful safeguard which I hope will also reassure noble Lords. I hope that the assurances I have given have added clarity in the context of the powers in the Bill and shown that they are appropriately limited to what is deemed necessary. On the basis of this explanation I hope that the noble and learned Lord will feel able to withdraw his amendment.
“( ) Any reference in this Act to a person named “for the purposes of” a UN Security Council Resolution so far as it provides for the taking of particular measures includes any person who, by virtue of—(a) being named for any purposes by the Security Council or a subsidiary organ of the Security Council, and(b) the terms of the resolution,is a person in relation to whom the resolution provides for the measures to be taken.( ) Any reference in this Act to ships designated “for purposes of” a UN Security Council Resolution which provides for the taking of measures in relation to ships includes any ship which, by virtue of—(a) being designated for any purposes by the Security Council or a subsidiary organ of the Security Council, and(b) the terms of the resolution,is a ship in relation to which the resolution provides for the measures to be taken.”
Commonwealth Summit: Faith Leaders
Lord Ahmad of Wimbledon Excerpts(6 years, 10 months ago)
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Baroness Berridge (Con)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and draw attention to my registered interests.
The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, we look forward to hosting the Commonwealth Heads of Government Meeting in London in April this year, when faith leaders, civil society, business leaders and young people will come together to debate, celebrate and renew the Commonwealth. I shall engage fully with faith leaders in encouraging them to hold side events and to participate directly in activities in the run-up, because it is important that we offer important faith perspectives on ensuring a fairer and more secure, prosperous and sustainable Commonwealth.
Baroness Berridge
My Lords, I thank my noble friend the Minister for his Answer but only a few weeks after the summit we will celebrate 70 years since the arrival of MV “Empire Windrush”. The Commonwealth migration that took place then has transformed many of the UK’s own faith communities. What plans do Her Majesty’s Government have to support the Commonwealth Secretary-General’s faith in the Commonwealth initiative, in particular to meet those UK faith leaders who are of Commonwealth heritage or whose communities are of Commonwealth heritage to promote the fact of the summit and outline how they can engage practically?
Lord Ahmad of Wimbledon
I assure my noble friend that we are working directly with the Secretary-General and the Commonwealth Secretariat on the very important point that she raises about faith communities. I believe that we all would acknowledge—indeed, celebrate—the fact that over the decades and centuries we have seen diaspora communities contribute incredibly to Britain. The faith communities are part and parcel of that. I look forward to working with them in the run-up to the Commonwealth summit, during the summit and, indeed, afterwards, when the UK has the chair for two years.
Lord Collins of Highbury (Lab)
My Lords, I very much welcome what the Government have been doing to ensure that civil society is fully engaged in the Commonwealth summit. Certainly, the fora are very important. The Minister’s predecessor, the noble Baroness, Lady Anelay, undertook to meet the TUC to ensure that all aspects of civil society are fully engaged. Can he update the House on what further meetings have taken place to ensure that civil society in the broadest sense is represented in all the fora?
Lord Ahmad of Wimbledon
I assure the noble Lord that, as the Minister for the Commonwealth, I have been engaging in various round tables with civil society leaders across the piece in all elements of ensuring that civil society is fully engaged. Most recently, I met the organiser of the Commonwealth People’s Forum to ensure diversity of participation, both in terms of those participating but also in that the agenda reflects the important priorities of all people represented through civil society across the Commonwealth.
Lord Singh of Wimbledon (CB)
My Lords, does the Minister agree that the presence of faith representatives should go beyond the side events to actual opportunities to discuss human rights conditions and infringements of religious liberty in different Commonwealth countries, and engage with representatives of the countries concerned?
Lord Ahmad of Wimbledon
I assure the noble Lord that faith representatives will play a key role. I would add that, as I am sure he recognises, when we talk about the Commonwealth 52 there is a wide representation of people of different faiths and strong convictions, who will of course participate in all elements of the discussion around the Heads of Government Meeting and the surrounding fora.
Lord Chidgey (LD)
My Lords, I declare an interest as the co-chair of the Commonwealth All-Party Parliamentary Group. Does the Minister recognise the support and leadership given by Members of this Parliament to parliamentarians throughout the Commonwealth? Will the Government therefore explore opportunities which would enable Members of both Houses to become involved with the UK CHOGM process? In particular, will the Government consider how best the CPA UK members can engage with delegates registered with the various forums that will support the CHOGM themes?
Lord Ahmad of Wimbledon
I would of course be delighted to work with the noble Lord in this respect but, as he will be aware, I have already written directly on a couple of occasions to all parliamentarians across both Houses. I have met on a systematic and periodic basis with all the chairs of the various APPGs leading on the Commonwealth, including the chairs of the Commonwealth APPG, and we will look to host specific parliamentary events during the week of CHOGM.
Lord Howell of Guildford (Con)
My Lords, I declare my interests as in the register. Will my noble friend accept that the move by the Government to engage business, civil society and other interests in the forthcoming summit is extremely welcome but that the need now is to begin to focus on outcomes and positive results from the summit, not just on prosperity and trade, security and defence, the promotion of human rights and gender equality but in a variety of other areas, particularly those which benefit the United Kingdom itself?
Lord Ahmad of Wimbledon
My noble friend speaks with great experience and I totally agree with him. The Government, along with the secretariat and the Secretary-General—and, it would be fair to say, member states across the Commonwealth—are focused on ensuring that the summit’s outcomes will drive the agenda for the UK’s two-year chairmanship.
The Lord Bishop of Durham
My Lords, the Minister may not be aware of the initiative of the lord-lieutenant of County Durham in having a schools conference in the lead-up, which will end up in Durham Cathedral. Will the noble Lord commend the work in schools, cathedrals and other major places of worship to engage in such things to enhance the Commonwealth conference?
Lord Ahmad of Wimbledon
I was not aware of the event that the right reverend Prelate points out but I welcome it and congratulate all its organisers. I open up this invitation: where events are happening, please let us know. They can be reflected as part of the Commonwealth timetable and I will be writing shortly to all leaders of local government across the UK to ensure that we celebrate Commonwealth Day on 12 March appropriately.
Baroness Afshar
Are the Government aware that faith representation is highly gendered and that, on the whole, women are not represented? Is any care taken to ensure that women, who have a very different perspective on religion, are also represented?
Lord Ahmad of Wimbledon
The noble Baroness raises an important point and I assure the House that, along with the rest of the Government, I am committed to that objective. In respect of that, a specific women’s forum will take place as part of the four fora during the Commonwealth summit.
Lord Hughes of Woodside
Has the Minister had meetings with the British Humanist Association and other non-religious groups?
Lord Ahmad of Wimbledon
The importance of freedom of religion and belief is a priority for this Government. As the Minister responsible I am meeting with all groups, including people of no faith and the humanist society, to ensure that the agenda at the Commonwealth summit and the programme for the UK’s two-year chairmanship of the Commonwealth reflect those priorities.
Sanctions and Anti-Money Laundering Bill [HL]
Lord Ahmad of Wimbledon ExcerptsMonday 15th January 2018
(6 years, 10 months ago)
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Lord Howell of Guildford (Con)
Can I just ask my noble friend a question, and apologise to your Lordships that I was not involved in earlier stages of this legislation? Was there ever a time when, in deciding on sanctions policy, we did so other than in alliance with other nations? Unilateral sanctions can always be evaded, and even collective sanctions, when they are only from the west, can be nullified by actions by China, Russia and other Asian powers, for instance. Is not the practical situation one in which we have to take account of our allies and the broad consensus of agreement with them on whether sanctions are justified, or are there individual unilateral instances that I may have missed?
The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, first, before I go any further, as I said in Committee on the Bill—and I shall come on to the specific question from my noble friend in a moment—I am genuinely grateful for the constructive engagement that we have had on all sides of the House on this very important Bill. The set of government amendments that I tabled last week reflects proposals through discussions and meetings that we have had with Peers and representatives from across the House, from the Opposition Benches and, indeed, from the Cross-Bench Peers. I am also pleased that the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, also felt able, after our constructive discussions, to put their names to some of the government amendments, including the one that I shall present in a moment. It also reflects very strongly that, at a time of great challenge internationally, we reflect the finest traditions of your Lordships’ House, in that we are able to practically demonstrate co-operation across the House in ways to improve legislation.
I fully recognise that sanctions involve significant restrictions and should not be imposed lightly. The standard to be applied by a Minister when introducing sanctions regulations is therefore one of the most important parts of this Bill. I assure noble Lords that I have listened very carefully to the range of views on exactly what that standard should be, with a view to finding the right balance between the Government’s ability to impose sanctions when the relevant conditions are met and the need to guard against excessive use of these powers. I have therefore tabled Amendment 9, which introduces three additional requirements when a Minister is considering making sanctions regulations for a purpose beyond compliance with a UN or international obligation. First, the Minister must have good reasons to pursue that purpose; secondly, the Minister must be satisfied that the imposition of sanctions is a “reasonable course of action” for that purpose; and finally, when making regulations, the Minister must lay a report to Parliament explaining how the above two tests have been met.
These requirements are picked up again in Amendment 6, which is a technical drafting point consequential on Amendment 9. The requirement for the Minister to lay a written report before Parliament when making sanctions regulations reflects Amendment 7, proposed by the noble Lord, Lord Collins, and I am grateful for his suggestion. The principle that unites us here is that sanctions need to form part of a wider political strategy that is properly articulated to Parliament and the wider public. Amendment 9 aims to provide the House with the requested reassurance that sanctions will not be imposed lightly, while at the same time ensuring that the UK can continue to play an active and constructive role in international affairs. On that basis, I hope that noble Lords will be persuaded not to press Amendments 1 and 7.
Amendments 2 to 5 refer to the purposes for which sanctions regulations may be created. The current list of purposes in the Bill is designed to ensure that we can continue to implement sanctions across the full range of purposes currently pursued by EU sanctions. The EU can adopt sanctions for any of the purposes of its common foreign and security policy. The reference to “foreign policy objectives” in subsection (2) seeks to maintain this same scope for the UK when we have left the EU.
In Amendment 2, the noble Baronesses, Lady Northover and Lady Sheehan, propose to remove the ability to impose sanctions for the purpose of advancing a UK foreign policy objective. The amendment would restrict the flexibility of future UK Governments, potentially preventing them from using sanctions, and putting the UK out of step with our international partners, including the European Union. That was a point made well by my noble friend Lord Howell—and again, I appreciate his international experience in this regard. As I have said previously, and noble Lords have acknowledged, sanctions are at their best when they are acting in unison and in co-operation and co-ordination with partners.
“( ) Section (Additional requirements for regulations for a purpose within section 1(2)) contains additional requirements in relation to regulations stating a purpose within subsection (2) above.”
Baroness Northover
My Lords, indeed this deals with some of the complexities faced by those operating for good reasons in areas where sanctions bite, and we will be returning to these issues in a later group. We will then talk about guidance and how to ensure that it is easier for financial institutions to derisk.
Amendment 39 in my name is about the mutual recognition of licences and streamlining humanitarian licensing, while Amendment 42 deals with the problems that NGOs may run into if multiple authorisations are required. Amendment 43 is about reporting, because if there is a requirement for parliamentary reporting, that assists in terms of highlighting the issues that NGOs are running into. As I say, we will be returning to these issues in a later grouping.
Lord Ahmad of Wimbledon
My Lords, the Government are well aware of the concerns in this House about the humanitarian impact of sanctions, and we are committed to finding constructive solutions through close engagement with NGOs and other humanitarian actors. Indeed, I would like to thank the noble Lord, Lord Collins, and the noble Baroness, Lady Northover, for the engagement we have had directly with representatives from NGOs between the Committee and Report stages.
As noble Lords will be aware, in 2016 the UK secured amendments to the EU’s Syria sanctions regime to provide a specific exemption for fuel purchases by humanitarian organisations. This assisted such organisations to carry out their operations in Syria while ensuring that they were still sanctions compliant. Provisions in the Bill as it is currently drafted enable the Government to include humanitarian exemptions in sanctions regulations and to issue licences for legitimate activity that might otherwise be prohibited by sanctions. Currently, EU case law limits our ability to issue so-called general licences for the humanitarian sector, but, as I have said before, the Bill has been drafted to enable us to issue these licences and thus provide greater flexibility. We will also publish additional guidance and ensure, through continued engagement with the humanitarian sector, that any additional sector-specific guidance addresses its concerns.
The process of issuing licences is best handled administratively on a case-by-case basis to respond efficiently to fast-moving events. That means we are cautious about putting too much detail in the Bill. However, I can assure noble Lords that the Government make every effort to prioritise urgent and humanitarian licence application cases where there is a risk of harm or a threat to life, and we will continue to do so going forward. Once sanctions are in place, the Government will remain alert to any unintended consequences for humanitarian operations and make adjustments where appropriate, as we did for Syria.
I turn briefly to the amendments in this group. Amendment 8, proposed by the noble Lord, Lord Collins, would require the Government to publish a detailed, stand-alone humanitarian impact assessment both in advance of sanctions regulations being made and at subsequent points thereafter. There is no precedent for this approach in the EU or among other western countries with national sanctions legislation. It could hamper the UK’s ability to deploy sanctions quickly and make multilateral co-ordination more challenging. It may also have the unfortunate effect of facilitating sanctions avoidance—if we give advance warning that we are considering sanctions, we create the ability for sanctions targets to remove their assets from the UK before sanctions bite. That having been said, I can assure noble Lords that the report that the Government would lay before Parliament when making or amending sanctions regulations, and the guidance issued in respect of those regulations, would explain the approach to mitigating humanitarian impacts, including through exemptions and licensing, which was a concern expressed by NGOs and noble Lords.
Amendment 39 proposes a system whereby licences from other jurisdictions would be recognised in the UK where more than one jurisdiction is involved. While I have sympathy with the desire to simplify compliance procedures for those operating across borders, I am afraid that this amendment poses real difficulties. Licences issued by our international partners may not necessarily align with UK policy objectives or work within UK systems. This is simply because other licensing authorities will not need to consider UK policy, UK law or practicalities before they issue such a licence.
Further, the amendment risks creating legal uncertainty. It is not clear what other jurisdictions may be within scope or which jurisdiction would enforce the sanctions when a licence is breached. Nor is it clear whether a licence issued by an overseas jurisdiction would be recognised by financial and other institutions in the UK without some form of validation by the UK licensing authority. The Government believe that the UK authorities remain best placed to interpret UK sanctions regulations and to determine when and in what circumstances activities or transactions may be licensed.
Amendment 40 calls for the Government to establish a fast-track process for dealing with requests for exceptions and licences for humanitarian purposes. As I have just said, the Government make every effort to prioritise urgent and humanitarian licence application cases and will continue to do so. However, establishing a specific fast-track process could have unwelcome effects in relation to other types of licences. Some other categories of licences, such as those aimed at meeting “basic needs”, may not be strictly humanitarian by definition but may have very serious consequences if not prioritised. The amendment could result in certain humanitarian applications that are not urgent being prioritised over non-humanitarian applications that do require an urgent response.
Amendment 41 would require a consultation to be undertaken on an overarching framework for exceptions and licences. As noble Lords will know, the White Paper consultation that preceded this Bill sought specific feedback on exceptions and licences, and we have considered all the comments very carefully. We will publish an initial framework for exceptions and licences in the near future and will continue to consult interested parties before the Bill enters into force. This will inform the approach that we take to exemptions and licensing provisions in the regulations that set up each individual sanctions regime. I am not convinced of the need to undertake a further consultation after the commencement of the Bill. By then, the relevant sanctions regulations, with the appropriate exceptions and licensing provisions, will have already been made and scrutinised by Parliament.
“Additional requirements for regulations for a purpose within section 1(2)
(1) This section applies to regulations under section 1 any of whose purposes (as stated under section 1(3)) is a discretionary purpose. In this section “discretionary purpose” means a purpose which is not compliance with a UN obligation or other international obligation but is within section 1(2).(2) An appropriate Minister may not decide that it is appropriate to make regulations to which this section applies unless, in respect of each discretionary purpose stated in the regulations, that Minister—(a) has considered whether there are good reasons to pursue that purpose and has determined that there are, and(b) has considered whether the imposition of sanctions is a reasonable course of action for that purpose and has determined that it is.(3) In subsection (2)(b) “sanctions” means prohibitions and requirements of the kinds which are imposed by the regulations for the purpose in question (or both for that purpose and for another purpose of the regulations).(4) In relation to any regulations to which this section applies, the appropriate Minister making the regulations (“the Minister”) must at the required time lay before Parliament a report which explains in respect of each discretionary purpose stated under section 1(3) in the regulations—(a) why the Minister considers that carrying out that purpose would meet one or more of the conditions in paragraphs (a) to (d) of section 1(2),(b) why the Minister considers that there are good reasons to pursue that purpose, and(c) why the Minister considers that the imposition of sanctions (within the meaning given by subsection (3)) is a reasonable course of action for that purpose.(5) Nothing in subsection (4) requires the report to contain anything the disclosure of which may, in the opinion of the Minister, damage national security or international relations.(6) In subsection (4)“the required time” means—(a) in the case of regulations contained in a statutory instrument which is laid before Parliament after being made, the same time as the instrument is laid before Parliament;(b) in the case of regulations contained in a statutory instrument a draft of which is laid before Parliament, the same time as the draft is laid.”
Lord Lennie (Lab)
My Lords, in relation to the clause on financial sanctions, I add my gratitude to the Minister for the way that he has engaged with us, the Cross-Benchers and those in other parties. We have turned what the noble and learned Lord, Lord Judge, described as a lamentable Bill into something approaching an acceptable Bill. There are some problems with it, but this will not be one of them. The three pre-conditions that the Minister has laid down will make it wholly exceptional that someone can be designated under the sanctions regime without identification, so the Maltese grandchildren that the noble and learned Lord referred to in Committee should feel fairly safe in their beds from here on in. We welcome the concessions made and support this part of the Bill.
Lord Ahmad of Wimbledon
My Lords, once again I thank the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, for their constructive engagement on understanding and then coming forward with appropriate amendments in this regard.
The group of amendments in front of us focuses upon the description of persons who can be subject to sanctions by way of sectoral sanctions and individual designations. Before I come to the main thrust of the amendments—and I use this term advisedly, notwithstanding the contribution of the noble Baroness, Lady Northover—there are two technical government amendments to Clause 2. These amendments will ensure that sanctions regulations can prevent the procurement of funds or economic resources, as well as receiving such funds or economic resources. This will help prevent sanctions being evaded and thus improve their overall effectiveness, which I know is the intent of all noble Lords in respect of the Bill. I hope that this small and technical change will be deemed non-controversial, and would be grateful if your Lordships would support the amendments and enable us to further enhance the Bill’s provisions.
I turn to the amendments tabled by noble Lords, which seek to stop the Government from being able to impose sanctions on persons “connected with” a prescribed country. As I have assured your Lordships during previous stages of the Bill, while I understand the concerns in this respect, I believe the Government have acted to address them where we can and there are good reasons why these provisions are needed. I totally understand the concern raised by the noble and learned Lord, Lord Judge, in Committee that a Minister would be able to define the connection to a country by regulations, and do so in ways that were unacceptable. I assure him that there are safeguards to prevent this power being misused.
As set out in the Bill, sanctions measures can be made in line only with the purposes for regulations set out in Clause 1. The definition of “connected with” must therefore be appropriate for the pursuit of the said purpose. It would not be reasonable or appropriate to create sanctions measures relating to persons that have only a very loose connection with a sanctioned country.
The noble and learned Lord, Lord Judge, said in Committee that it surely makes sense for the Government to define connection now, in primary legislation, rather than at some point in the future. We have considered this suggestion carefully and looked at a couple of types of possible approaches in this respect. The first approach would be to list the connections that sanctions currently impose, but this poses two problems. First, the list would be very long, as there are a great deal of different types of connections. Secondly, an exclusive list would not give us the flexibility that we will need in future when new types of connections need to be made. It is worth remembering that the context of international policy is changing rapidly. This is perhaps best typified by the sanctions regime on North Korea, which has changed three times in the last six months alone. We do not know how much further we will be obliged to act on North Korea; unpredictable world events could make it necessary to have new regimes with measures of increasing complexity.
We also considered whether it might be possible to restrict the power by making sure that certain types of loose connections could not be specified. Again, the vast number and shifting type of these connections make drafting such provisions prohibitively difficult. The situation also changes in each case. I agree with the noble and learned Lord, Lord Judge, that a connection based on familial connection might be very loose and unjustifiable in many circumstances, but in the context of misappropriated wealth spread through the close family of a former head of state, such a connection might be required. I therefore request noble Lords not to press their amendments in relation to connected persons for the reasons that I have given.
On designation by description, I have listened closely to the concerns of noble Lords who spoke in Committee, including those about the practical difficulty that this would present for banks and others responsible for complying with such sanctions. I noted in Committee that it is important for the Government to have the power to designate by description in some circumstances, such as where we do not have the names of members of a terrorist group. I have accordingly sought to strike a balance here by placing restrictions on the use of this power to ensure that it can be used only in limited circumstances.
Based on the debate in Committee, I have tabled government Amendments 33 to 35 to ensure that the use of this power is tightly constrained, as the noble Lord, Lord Pannick, acknowledged. With this amendment in place, the Government must impose sanctions on an individual by name if we have access to their name, as the power to designate by description cannot be used when we do. The description must also be sufficiently detailed that a person can apply it to themselves and decide whether they are subject to sanctions. For example, if we wished to sanction all Ministers of a certain state, we would designate as many as possible by name and would then be able to designate any others of unknown name by the description “Ministers of that state”. A Minister of that state will clearly know that the sanction applies to them, and UK persons, such as banks, will be able to ascertain the position in relation to their own business dealings. This enshrines the Government’s commitment to use this power only when it is not practicable to designate by name, thus easing the compliance burden on industry. I thank the noble Lord, Lord Pannick, for his acknowledgement of the government amendments in this respect.
The noble Lord, Lord Hain, raised a specific issue relating to the work of Hogan Lovells for the South African Revenue Service. The noble Lord has raised various matters during the passage of the Bill, and I am grateful to him for bringing this information to our attention. I assure the noble Lord that, on this matter and the matters he has raised previously, the Government continue to be concerned about the allegations of corruption in South Africa. I further assure him that the British high commission continues to monitor this issue very closely. As the noble Lord said, he has already brought this issue to the attention of the Solicitors Regulation Authority and awaits its reply. Once he has heard from it on that subject, any correspondence could be copied to the Government, although I am sure we will already be informed. It has been helpful to have his interventions in this respect.
We have listened very carefully to the various elements and concerns raised in Committee. I once again thank noble Lords for their engagement in reaching the position that we have on these amendments. As I said at the start of Report, and during Committee and Second Reading, the guiding principle that I have adopted in this regard is that I believe very passionately that legislation is not just made more effective and more practical but enhanced in your Lordships’ House. Through the co-operation we have had on this group of amendments, we have seen that level of constructive engagement.
On the basis of that explanation, I hope I have been able to persuade all noble Lords to support the government amendments and would ask them to withdraw or not move their amendments.
Lord Pannick
I am very grateful to the Minister, who has shown exemplary constructive engagement throughout discussions on the Bill. I am sure all parts of the House are very grateful to him and the Bill team for that.
Amendments restricting Ministers’ powers to designate by description are far from technical, and I simply point out one matter in response to the Minister. I think he suggested that, in relation to government Amendment 34, the issue would be whether the individual himself or herself would be able to identify from the description whether they were covered. In fact, government Amendment 34 goes a lot further than that, because the test under it is whether, from the description, a reasonable person would know whether the individual falls within the description. That is the test. But I am very grateful to the Minister and beg leave to withdraw Amendment 10.
Sanctions and Anti-Money Laundering Bill [HL]
Lord Ahmad of Wimbledon ExcerptsMonday 15th January 2018
(6 years, 10 months ago)
Lords ChamberRead Full debate Sanctions and Anti-Money Laundering Act 2018 View all Sanctions and Anti-Money Laundering Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 69-R-II Second marshalled list for Report (PDF, 88KB) - (15 Jan 2018)
“(3) Regulations under section 1 which contain a designation power must provide that where an appropriate Minister—(a) has made a designation under the power, or(b) has varied or revoked a designation made under the power (see section 18),that Minister must without delay take such steps as are reasonably practicable to inform the designated person of the designation, variation or revocation.(3A) The regulations may include provision, additional to that required by subsection (3), as to steps to be taken as regards notification or publicity where a designation has been made under the designation power or a designation made under the power has been varied or revoked.(3B) The regulations need not require a person to be notified of an intention to designate the person.”
The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, I thank all noble Lords again for their constructive engagement on this group of amendments. The government amendments I have tabled have been heavily influenced by the discussions we have had. Amendment 28 would require regulations to include provisions on notifying a person once designated and how to publicise designations. I am happy to say that government Amendment 27 does exactly that. When a person has been designated, or had their designation varied or revoked, the Minister must, without delay, take such steps as are reasonably practicable to inform the person. Sanctions regulations may also include further provision as to the specific arrangements for notification or publicity. In this regard, I am extremely grateful to the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, for their assistance.
Amendment 29 would require a person to be informed of their designation and to be given the fullest possible account of the reasons for designation and the steps required to address the concerns. Amendment 30 covers similar ground, while also requiring that the designated person be given the evidence underlying the designation or a gist of any evidence that is withheld for reasons of national security. In response, government Amendments 32, 37 and 59 make provision across the Bill to provide a statement of reasons to designated persons. When a person is designated, the Government will be obliged to provide a statement of the matters that the Minister knows, or has reasonable grounds to suspect, have led to the designation. I am sure noble Lords will appreciate that the Minister’s statement may exclude some matters, for reasons which I know noble Lords will understand and respect, such as when it is in the interests of national security. If a challenge is made in court, on those rare occasions when sensitive information is used to underpin a designation, the closed material procedure will apply. The courts, such as in the case of AF (No. 3), have long required the gist of sensitive material to be disclosed to enable an individual to understand the case against them. We accept that this is and will continue to be the case and the Bill does not seek to make any changes to the existing disclosure burden on the Government in such cases.
Amendment 38 would insert a new clause into the Bill requiring the appropriate Minister to exercise the power to designate only to the extent that it is proportionate to do so, having regard to the purpose of the designation and the impact on the person concerned. The government amendments I have tabled in response—Amendments 31, 36 and 58—use very similar language. They would require Ministers to consider that a designation is appropriate, having regard to the purpose of the regulations and the likely significant effects of the designation on the person concerned. I am again grateful to the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Judge, for supporting these government amendments. While there seems to be a meeting of minds on this important issue, it may also be helpful if I briefly explain the thinking behind the Government’s revised language.
First, the European Convention on Human Rights entrenches individual rights, obliging the Government to consider the impact on an individual’s rights when making certain decisions. Section 6 of the Human Rights Act 1998 further ensures that the appropriate Minister must act in line with those convention rights, as informed by Strasbourg case law. We consider that this includes satisfying himself that the designation is proportionate, where convention rights are engaged, and I have been clear on this in relation to this Bill, including in Committee. Secondly, given that the Human Rights Act already requires proportionality to be considered where convention rights are engaged, a court might interpret the use of the word in the Bill to mean something different. Our amendments have tried to preserve the spirit of the intention underlying this amendment, without creating any difficulty of interpretation. As a result, the government amendments provide for a balancing test for designations between the purpose of the regulation and the impact on the individual, while avoiding an explicit reference to “proportionality”.
Amendment 50 requires the Government to provide specific guidance produced by the Crown Prosecution Service about the prosecution of sanctions breaches. The Government wholeheartedly support and have publicly committed to producing clear and accessible guidance on sanctions implementation and enforcement, both in this House and throughout our consultation on the White Paper. The Crown Prosecution Service already publishes guidance on how the public interest is taken into account in any decision to prosecute and this test is the same one that will be applied in decisions to prosecute sanctions offences. The procurator fiscal in Scotland and the Public Prosecution Service for Northern Ireland publish similar guidance. The Government’s view is that no additional public interest guidance is necessary simply for a sanctions prosecution decision.
The Bill will provide for the Government to issue guidance on the content and implementation of sanctions. Clause 36 requires Ministers to issue guidance about any prohibitions and requirements imposed by sanctions regulations. There will be a mandatory requirement to provide comprehensive guidance for all those affected by sanctions implementation. Clause 36 is a more comprehensive duty than that specified in the amendment to Clause 16 which I have said is unnecessary. It has been drafted so as to allow comprehensive guidance on all sanctions prohibitions and requirements to be prepared and consulted on by the appropriate sources of expertise. For financial sanctions, the Office of Financial Sanctions Implementation has already published a comprehensive guidance document setting out its general enforcement approach. This will be fully updated to reflect the new sanctions Bill regime.
Amendment 53 requires the Minister to respond,
“as soon as reasonably practical”
to a request to vary or revoke a designation. Government Amendments 56 and 61 are fully in line with this proposal.
Finally, government Amendments 51, 52, 57 and 60 make technical changes consequential on these changes, and I hope they will be accepted. I beg to move.
Lord Pannick (CB)
My Lords, I have tabled, with the support of the noble and learned Lord, Lord Judge, the noble Lord, Lord Collins of Highbury, and the noble Baroness, Lady Northover, a number of amendments in this group on the subjects of procedural fairness and proportionality. The Minister acknowledged in Committee that these were topics that he and the Bill team would need to consider before Report. Given the adverse consequences of being designated, the Bill must provide for procedural fairness and the provisions must be applied in a proportionate manner. Again, I thank the Minister and the Bill team for some very helpful meetings on these subjects, and for tabling these amendments, which address my concerns.
In particular, government Amendments 31, 36 and 58 will require the Minister to be satisfied that any designation is appropriate, having regard to both,
“the purpose of the regulations … and … the likely significant effects of the designation”,
on the person concerned. That addresses the substance of my Amendment 38 on proportionality. It does not use the word “proportionality” but that does not matter. It contains the essence of proportionality and I am grateful to the Minister for confirming in his opening remarks that that is indeed the purpose of these government amendments.
Government Amendments 32, 37, 59 and 61 are also very important in placing in the Bill a requirement of procedural fairness; that is, that the person designated is entitled to a statement of the reasons why he or she has been designated. That is absolutely fundamental to any fair sanctions procedure. I recognise that the government amendments exclude any right to information the disclosure of which would harm interests such as national security, but they rightly provide that these exclusions will not allow the Minister to provide no statement of reasons. I would be grateful if the Minister could confirm that the intention here is to ensure that a person who is designated will always be entitled to at least a statement of the essence of the reasons for the designation, albeit that details which affect national security or other protected interests cannot be disclosed.
In the light of these government amendments, I am satisfied that the Bill now makes it clear that procedural fairness and the substance of proportionality are part of the administrative machinery. The Minister made it clear in Committee that this was always the intention and he made it clear—and I respectfully agree with him—that the courts would in any event hold Ministers to such basic standards of the rule of law. I am pleased that the Minister has recognised that it is appropriate to include these matters in the Bill and I thank him.
Lord Lennie (Lab)
My Lords, I am also grateful to the Minister. Clearly, he has listened a lot and has provided a lot of change from the initial version of the Bill. There is a meeting of minds—there is no question about that—but the one issue that I am not sure he addressed was about the requisite steps that persons are expected to take to address the concerns which led to the designation in the first place. I would like the Minister to comment on that, but we support the changes.
Lord Ahmad of Wimbledon
My Lords, again, I thank noble Lords. The noble Lord, Lord Pannick, asked me to confirm that the Bill makes no provision to change the ability of the designated person to be given the reasons for their designation and to be supplied with an irreducible minimum of the evidence against them. The only issue is that we have always said there would be national security elements. The amendment specifically says that,
“the regulations may not authorise the Minister to provide no statement of reasons”,
which I am sure the noble Lord has noted.
“(b) considers that the designation of that person is appropriate, having regard to—(i) the purpose of the regulations as stated under section 1(3), and(ii) the likely significant effects of the designation on that person (as they appear to the Minister to be on the basis of the information that the Minister has).”
Lord Collins of Highbury (Lab)
My Lords, I thank the noble and learned Lord and noble Lords for their contributions. I agree wholeheartedly with their comments in relation to the thrust of this legislation. We are here because of another decision. We are here because we are being forced to take action speedily because of the precipice that we will be facing.
I said at Second Reading and will say now that we support this Bill because we are required to have a proper and full sanctions regime. I completely share the concerns expressed by your Lordships’ Constitution Committee. But, as I said in Committee, your Lordships’ Delegated Powers and Regulatory Reform Committee examined these clauses in some detail and did not quite share the view of the Constitution Committee. It referred to its previous memorandum on the subject and said that the reason for this clause related to the enforcement of the prohibitions and requirements set out in the regulations. In Committee, the Minister said that the Government were replicating existing enforcement regimes. He said:
“To be clear: these types of offences already exist”.—[Official Report, 21/11/17; col. 165.]
In Committee, I said that if that was the case, and the Minister was hearing us in terms of the concerns over principles, I hoped that he would come up with something better to address the concerns of the Delegated Powers and Regulatory Reform Committee. I am afraid that, as the noble and learned Lord, Lord Judge, said, I do not think that the Minister has come up with adequate provisions to address these concerns. They are limited, as the noble and learned Lord said, to some of the all-embracing powers such as determining evidence and the process for evidence. I welcome those changes but I do not think that the Government have gone far enough in terms of being very clear how these wide-ranging powers will be dealt with. If the noble and learned Lord presses this issue, I hope that the House will support him.
Lord Ahmad of Wimbledon
My Lords, first, I thank the noble and learned Lord for tabling his amendment. Again, I also thank him for the extensive discussions we have had in this respect.
The amendments seek to remove the ability to make provision in sanctions regulations creating offences for breaches of sanctions. I say from the outset that I sympathise with the concerns that noble Lords have expressed during various parts of the debate, not just today but in previous stages. I am sure noble Lords will also acknowledge that we have done a lot of work to try to respond to these concerns. I have tabled some government amendments in this area, which the noble Lord, Lord Collins, acknowledged.
The powers in question enable offences to be created for breaches of sanctions, in line with our current practice when implementing EU legal acts. They also enable other enforcement tools to be used, such as deferred prosecution agreements or serious crime prevention orders. Having the power to punish individuals and entities for breaching sanctions deters non-compliance and ensures the measures are robust. Sanctions without teeth, as I am sure noble Lords acknowledge, are essentially meaningless. Indeed, we debated earlier an amendment that would have included preventing,
“the violation of sanctions regulations”,
as one of the explicit purposes to be set out in Clause 1. Although I argued against that amendment on technical grounds, I agree with the spirit.
EU sanctions against countries such as Russia and Syria are imposed through EU legal acts that require member states to put in place enforcement measures at a national level. In line with that requirement, the UK routinely creates criminal offences for breaches of sanctions by way of statutory instruments made under powers in the European Communities Act 1972, as well as other legislation such as the Export Control Act 2002 and the Policing and Crime Act 2017. Other EU member states implement similar enforcement measures through their national legislation.
As foreshadowed in the White Paper consultation before this Bill was introduced, the Government want to be in a position to maintain continuity in this area. Whatever one’s views on Brexit, I think there is wide support for the principle that the UK and EU should remain closely aligned on sanctions policy. If the UK’s future sanctions regime against Russia was stripped of any enforcement provisions, I am sure noble Lords would agree that this would send a very unfortunate signal to our EU partners and to other close allies. Amendments 45 and 47 would mean that breaching a sanctions regime would not be an offence. If they are passed, as existing criminal offences in EU retained law fall away when new UK regimes are introduced, we would be unable to replicate those offences in the new regimes.
We have covered some of these issues previously, and I hope that what I have said will persuade the noble and learned Lord to withdraw his amendment. As I have said, I understand the concerns that have been expressed, including today, about the scope of these powers and will set out in a moment the government amendments that I have tabled in response. But the abolition of offences from sanctions regulations clearly undermines the purpose of the Bill and would make the UK a weak link in broader international implementation of sanctions, which I am sure is not noble Lords’ intention. I know and totally accept that this House is concerned about the creation of criminal offences through secondary legislation, a point eloquently made by the noble and learned Lord, Lord Judge, the noble Lord, Lord McNally, and my noble friend Lord Deben. I can provide this House with the following reassurances.
Baroness Northover
I am glad that to some extent the Government have moved in this area and I hope that, in the light of the vote that we have just had, that spirit of co-operation around the House will extend to other sections of the Bill that still need addressing.
Lord Ahmad of Wimbledon
My Lords, I thank the noble Lord for his amendment. As he has already indicated, it would oblige the Government to conduct a re-examination of each designation on an annual basis. I agree completely on the need for sanctions designations to be based on solid evidence. The UK has pushed hard for that in the EU, and that is widely recognised—for example, in the recent report of the House of Lords EU Committee. We are committed to maintaining these high standards.
The Bill as drafted includes a robust package of procedural safeguards, which will be further reinforced by the government amendments I have tabled, including Amendment 55. The combined package will provide a high level of protection for designated persons, at least as strong as current EU standards. The Government would review all sanctions regulations annually and present the results in a written report to Parliament. Amendment 55 makes that clear on the face of the Bill; I know that noble Lords raised that point. If the report concluded that there were no longer good reasons for maintaining a UK sanctions regime, we would lift it. Any changes made to the equivalent sanctions regimes of the EU or other international partners would be examined closely as part of the annual review.
Alongside the annual review of the regulations, the Bill requires the Government to put in place a dynamic process to reassess designations upon request; the triennial review is not the only opportunity. A designated person can request a reassessment of their designation at any time, and a further reassessment when there is a significant matter that has not been previously considered by the Minister. I take the point that a designated person, once they had requested a reassessment, challenged it in court, and failed to establish any unlawfulness, would not have a further review until either there was a significant new matter or a triennial review. But what would the purpose of a further review be when the designation has been established to be lawful and nothing has changed since then? If there are new arguments to be tested, or if the passage of time has changed the situation, a further reassessment can be requested. If not, there is no need to do so.
In response to feedback from noble Lords in Committee, I am proposing to strengthen these safeguards through government amendments. The Minister would have to deal with a request for reassessment as soon as reasonably practicable, and inform the person of the decision and reasons as soon as reasonably practicable after a decision had been made. Ministers can also instigate a reassessment at any time—for example, if the person concerned has been delisted by the EU. Ministers would have every interest in initiating reassessments proactively, both in the interests of justice and to minimise the risk and cost of legal challenges. In any case, when the EU decided to revoke the designation of a person also designated in the UK, I would certainly want to reassess the corresponding UK designation.
Taken together, these provisions will ensure that UK sanctions are under constant scrutiny and the Government are obliged to respond swiftly to new information and challenges. The triennial review then provides a further backstop, ensuring that each and every designation is looked at afresh on a regular cycle. This aligns with current practice in Australia and would put us ahead of countries such as the United States and Canada, which have no such process. It does not prevent more frequent reviews, and we have mechanisms in place that oblige us to do so when appropriate. Requiring the Government to conduct these reviews every year would be extremely resource-intensive; we have had those discussions in the bilateral and constructive meetings with the noble Lord. There are finite government resources, and the noble Lord appreciated that that would take away from other important areas. However, the amendments that we have tabled ensure that the protections the noble Lord was after have been afforded. I am thankful for his co-operation in that regard.
Lord Pannick
My Lords, I am grateful to the Minister. I beg leave to withdraw the amendment.
“Review by appropriate Minister of regulations under section 1
(1) Subsection (2) applies where any regulations under section 1 are in force.(2) The appropriate Minister who made the regulations must in each relevant period review whether the regulations are still appropriate for the purpose stated in them under section 1(3).(3) If a purpose so stated in any regulations under section 1 is a purpose other than compliance with a UN obligation or other international obligation, any review of those regulations under this section must also include a consideration of—(a) whether carrying out that purpose would meet any one or more of the conditions in paragraphs (a) to (d) of section 1(2),(b) whether there are good reasons to pursue that purpose, and(c) whether the imposition of sanctions is a reasonable course of action for that purpose.(4) In subsection (3)(c) “sanctions” means prohibitions and requirements of the kinds which are imposed by the regulations for the purpose in question (or both for that purpose and for another purpose of the regulations).(5) An appropriate Minister who has carried out a review under this section must lay before Parliament a report containing—(a) the conclusions of the review,(b) the reasons for those conclusions, and(c) a statement of any action that that Minister has taken or proposes to take in consequence of the review.(6) Nothing in subsection (5) requires the report to contain anything the disclosure of which may, in the opinion of that Minister, damage national security or international relations.(7) For the purposes of this section each of the following is a “relevant period” in relation to regulations under section 1 —(a) the period of one year beginning with the date when the regulations are made;(b) each period of one year that begins with the date when a report under this section containing the conclusions of a review of the regulations is laid before Parliament.”
“( ) Regulations made under this section in relation to a request under section 19 , 21 , 23 or 25 must require—(a) the decision on any such request to be made as soon as reasonably practicable after the receipt by the appropriate Minister dealing with the request of the information needed for making the decision, and(b) the person who made the request to be informed of the decision and the reasons for it as soon as reasonably practicable after the decision is made.( ) The regulations may authorise matters to be excluded from the reasons given for the decision where the appropriate Minister who made the decision considers that those matters should be excluded—(a) in the interests of national security or international relations,(b) for reasons connected with the prevention or detection of serious crime in the United Kingdom or elsewhere, or(c) in the interests of justice(but the regulations may not authorise that Minister to provide no reasons).”
“( ) Regulations made under subsection (5) in relation to a request under this section or section 31 must require—(a) the decision on any such request to be made as soon as reasonably practicable after the receipt by the appropriate Minister dealing with the request of the information needed for making the decision, and(b) the person who made the request to be informed of the decision and the reasons for it as soon as reasonably practicable after the decision is made.( ) The regulations may authorise matters to be excluded from the reasons given for the decision where the appropriate Minister who made the decision considers that those matters should be excluded—(a) in the interests of national security or international relations,(b) for reasons connected with the prevention or detection of serious crime in the United Kingdom or elsewhere, or(c) in the interests of justice(but the regulations may not authorise that Minister to provide no reasons).”
Lord Collins of Highbury
My Lords, the noble Lord, Lord Faulks, said accurately that there was a balance to be struck here, and there is a debate to be had. I am not legally qualified and therefore wish to address the political and moral issues that have been raised. The noble Lord, Lord Pannick, said that this is an extremely rare situation and that we cannot pick and choose. The noble and learned Lord, Lord Brown of Eaton-under-Heywood, said in Committee:
“I see the force of the Government’s argument that the UK has no alternative under international law but to give effect to our obligations under the UN charter; indeed, Article 103 of the charter expressly dictates that these obligations prevail over any conflicting international law obligations.”——[Official Report, 29/11/17: cols. 703-4.]
The Opposition are concerned about the signal we would send if we adopted the amendment of the noble Lord, Lord Pannick. I hear his comments about the United Nations but this Parliament must uphold international law and the supremacy of the United Nations. It should not undermine that. If we adopt the amendment, we would send the signal to other countries, which may flagrantly flout decisions of the United Nations, that we insist that they should. We judge other countries by our own standards. The noble and learned Lord, Lord Mackay, is absolutely right that there should be provision for the British courts to consider a decision of the Secretary of State. However, ultimately they should support the Secretary of State and the United Nations, not say to the United Nations, “We are not going to accept that decision”. We cannot pick and choose; that is the fundamental point. Therefore, while I totally understand the power of the arguments put forward by the noble Lord, Lord Pannick, and have a lot of sympathy with them, there is one point that trumps all else—I use that word advisedly—namely, we must uphold the decisions of the United Nations.
Lord Ahmad of Wimbledon
My Lords, as Minister for the United Nations, among other things, I echo the sentiments of the noble Lord, Lord Collins, about our commitment to the United Nations. As a permanent member of the UN Security Council, the UK is at the heart of shaping the UN’s response to crises around the world, as we have seen. I know that all noble Lords respect that. The United Kingdom takes this role very seriously, including in our approach to sanctions in the UN Security Council. We are one of the leading voices for UN sanctions where there are good reasons for them, as recently to constrain North Korea’s nuclear programme. At the same time, we place great importance on the need for sanctions to be used responsibly, with proper respect for due process and the rule of law. It is important to remember that as a permanent member of that Security Council, the UK exercises real authority over which sanctions are and are not adopted by the UN.
I thank all noble Lords for their comments, to which I listened carefully. The noble and learned Lord, Lord Mackay, made important points. We have exercised authority by committing that we would never support in the UN Security Council a designation that we considered unlawful. Put another way, we would not support a designation unless we had reasonable grounds to suspect that the person met the relevant criteria. Not only is this the right thing to do, it also reduces the risk of the UK being obliged to implement a UN designation that might be vulnerable to challenge in court.
The Bill recognises that persons designated by the United Nations must have a right of redress, including the ability to bring a legal challenge against the Government in the UK courts. The Bill accordingly contains the ability for such a person to have access to the court, and to obtain a remedy for any unlawfulness that the court uncovers. If the court were to consider the UN designation unlawful, the court could instruct the Minister to use best endeavours to secure a delisting at the United Nations. This is a significant remedy not to be underestimated. As a permanent member of the UN Security Council, the UK is particularly well placed to make representations that a designated person should be delisted.
The Government recognise there may be rare cases in which the Minister’s best endeavours are not sufficient to secure a delisting at the UN, as we discussed with the noble Lord, Lord Pannick, between Committee and Report. The question then is whether the UK courts should have the power to quash a UN designation and thus leave the Government in breach of their obligations under the UN charter. Our view is that this cannot be right.
First, the Bill recognises that the UK is under a duty in international law to designate those persons designated by the UN, and this proposition has not been criticised. Secondly, failure to implement a UN designation would damage the UK’s reputation as a country that stands by its commitments under international law—a point well made by the noble Lord, Lord Collins. Thirdly, it would restrict the ability of the UK to call out other states where they were falling short of their obligations under international law. If it was open to the UK not to implement our legal obligations, irrespective of whether it were following a court decision, it would be impossible to criticise other states where they were not implementing their obligations.
I take the point the noble Lord made that the EU court has very rarely quashed EU legal acts which implement a UN designation on procedural grounds. However, it has never done so where that would leave the EU member state itself in breach of its UN obligations. We should bear in mind that the EU itself is not bound by the charter, but EU states are. The noble Lord mentioned the case of Kadi, which has frequently been cited. In that case the UN had, in fact, delisted the person concerned by the time of the judgment, so EU member states themselves were spared the choice between respecting a decision of the EU courts and abiding by their UN obligations. Had they been forced to choose, I am confident that they would have prioritised their UN obligations as required—as a number of noble Lords mentioned—by Article 103 of the UN charter, which makes it clear that where there is a conflict between obligations under the UN charter and obligations under any other international agreement, the obligations in the UN charter shall prevail. The United Kingdom and all other EU member states are bound by that charter, even if the EU itself is not. That too is part of the rule of law—upholding those international laws where they bind the United Kingdom.
The United Nations has many flaws, but it is crucial to maintaining international peace and security. To allow the UK courts to stop the Government implementing sanctions agreed by the UN Security Council is not the right approach for a country such as ours that seeks to lead by example at the United Nations. I sincerely believe that any Minister, regardless of political persuasion, would share this view. I also believe we are in agreement that by continuing to make the UK’s support for UN designations conditional on fair procedural standards, we can and should do all we can to prevent this problem arising. However, in the unfortunate event that such a case arises, I remain of the view that a “best endeavours” obligation is the right way to square this difficult circle.
I deeply respect the noble Lord’s position. Again, we have had constructive discussions on this, although on this occasion we did not reach agreement. However, I hope that with the reassurances I have given, the noble Lord will be minded to withdraw his amendment.
Lord Ahmad of Wimbledon
My Lords, I thank all noble Lords who have participated in this short debate, and in doing so I thank once again the noble Baroness, Lady Northover, and the noble Lord, Lord Collins, for their constructive engagement on this important issue. I agree with the point just made by the noble Lord, Lord Collins, on the importance of balance, but as noble Lords will acknowledge, the Government already publish guidance on the definition of “owned and controlled” and they will continue to do so. That duty is enshrined in Clause 36. We feel that there is no need to make it explicit, as Amendment 63 would require, and that doing so would prompt unhelpful questions about why other aspects of the guidance are not referred to in the Bill. We do not wish to limit the ability of Clause 36 to provide guidance in any of these areas.
I turn now to Amendment 64. It would greatly broaden the scope of guidance to areas such as establishing effective banking and payment corridors, which are clearly beyond the remit of the Government to provide. For example, we cannot require banks to make payments on behalf of particular customers or to open new payment channels. The whole issue of how banks operate and the derisking that we have seen in certain parts of the world is reflective of that. A requirement to provide such detailed guidance would therefore be highly problematic.
However, I do take on board some of the points raised by noble Lords about assuring that we will publish guidance at the earliest opportunity, and I hope that I can offer some degree of further reassurance. While we cannot force banks to make commercial decisions one way or the other, we can certainly encourage them to do so. We can do that through clearly drafted humanitarian exemptions, general licences, guidance and the ability to prioritise flexibly appropriate applications. I assure noble Lords that all of these can be delivered under the Bill as drafted.
If I heard the noble Baroness, Lady Northover, and indeed my noble friend Lord Dundee correctly—I thank my noble friend for his support for the Government’s actions in this regard—they referred to how the Government “may” issue guidance. I can assure noble Lords that Clause 36 makes it clear that the Minister “must issue guidance”. As I said earlier, in the near future we will publish an initial framework for the exceptions and licences.
Perhaps I may make a final point on the issue of NGOs and the humanitarian aspects. I for one have found our dialogue to be extremely constructive on a cross-party basis with NGOs. In that spirit, I certainly look forward to working with both the noble Baroness and the noble Lord to take this matter further. With those assurances, I hope that the noble Baroness will be minded to withdraw her amendment.
Baroness Northover
I thank the noble Lord and others who have taken part in this debate. Yes, he is right: the Bill states that the Minister “must issue guidance”, but the problem is that underneath that phrase it states that the guidance “may” include this, that and the other; in other words, it is not sufficiently specific. However, I thank the noble Lord for his response and his promises; I am sure that both the NGOs and the banking sector will see them. I hope that will move things forward and that the specific guidance enabling the banks to become involved—of course, the Government cannot instruct them to do so—is issued. If the Government are clear about what they are expecting, that is what the banking sector needs, while the NGOs need that clarity so they can get on with their work. I am sure this issue will be discussed further in the Commons, but in the meantime, I beg leave to withdraw the amendment.
“(2) The condition referred to in subsection (1)(b) is that the appropriate Minister making the new regulations—(a) considers that the regulations being amended will, as amended, be sanctions regulations within the meaning given by section 1(4) that are appropriate for the purpose stated in them under section 1(3), and(b) if any purpose stated in the regulations being amended is a purpose other than compliance with a UN obligation or other international obligation, considers in respect of each such purpose—(i) that carrying out that purpose would meet one or more of the conditions in paragraphs (a) to (d) of section 1(2),(ii) that there are good reasons to pursue that purpose, and(iii) that the imposition of sanctions is a reasonable course of action for that purpose.(2A) In subsection (2)(b)(iii) “sanctions” means prohibitions and requirements of the kinds imposed by the amended regulations for the purpose in question (or both for that purpose and for another purpose of those regulations).In this subsection “the amended regulations” means the regulations being amended as those regulations will be when amended.”
Lord Ahmad of Wimbledon
My Lords, government Amendments 65 and 68 build on the new requirements for making sanctions regulations that we have already debated. They extend these requirements to situations where a Minister is amending sanctions regulations that are not based on a UN or international obligation. In this regard, I am grateful to the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, for co-signing these government amendments. When amending regulations, the Minister would have to ensure that they continue to meet the relevant purposes, that there are good reasons to pursue those purposes, and that sanctions are a reasonable course of action. The Minister must also lay a written memorandum explaining why these tests have been met.
Government Amendments 67 and 102 are technical in nature—I use that word again—and enable us to implement the obligations more efficiently. I can assure the noble Baroness, Lady Northover, that they reflect the fact that UN sanctions regimes are often based on a series of Security Council resolutions. I hope noble Lords agree that these amendments are uncontentious and feel able to support them. I beg to move.
“(a) which are not for the time being authorised by Chapter 1 (ignoring section 7), but(b) which are kinds of prohibition or requirement that the United Kingdom—(i) has any UN obligation or other international obligation to impose, or(ii) has at any time had any UN obligation or other international obligation to impose.”
Lord Ahmad of Wimbledon
My Lords, Clause 39, to which this group of amendments refers, has been included to allow the UK to impose new types of sanction measures in response to new, unforeseen circumstances. Let me summarise why we think it is needed and then explain the government amendments that I have tabled. I note that this was one of the issues highlighted in the report of the Delegated Powers and Regulatory Reform Committee, and I know that several noble Lords have received and considered carefully my letter of last week specifically responding to the committee’s recommendations.
The familiar types of sanctions include asset freezes, travel bans, arms embargoes and prohibitions on aviation and maritime transport. These types of sanctions are included in the Bill. It is not possible to predict all the types of sanctions which may in the future be useful or necessary. We all know that as technology advances and those who wish to do us harm find ever more sophisticated ways of doing so, we may need to be able to react in an agile manner. The Government intend to continue to play a leading role in the development of sanctions as a foreign policy tool. Wherever possible we will do this through the UN to ensure that the measures have global impact. On occasion, however, we will need to work with like-minded partners outside the UN framework and may need to adapt our own sanctions toolkit to keep pace with allies. On both Iran and Russia, for example, transatlantic co-operation resulted in sanctions that were substantively different from anything previously agreed.
The power in Clause 39 is designed to provide the necessary flexibility in cases where we are acting outside the UN framework. Regulations under this clause would be subject to the draft affirmative procedure as befitting a Henry VIII power of this kind. However, having listened to the concerns expressed in this House and having reflected carefully on them, I have tabled government Amendment 69, which would further restrict the use of this power by stipulating that it may be used to create new types of sanctions only where the UK is or has been subject to an international obligation to put in place sanctions of that type. This means that the new types of sanctions created by this power can only be those developed by the international community. This power, as amended, will no longer enable the UK unilaterally to put new types of sanctions in place, which was a concern that was expressed.
Government Amendment 70 also makes it clear, as requested in Committee, that Clause 39 cannot be used to alter the purposes of the sanctions regulations specified in Clauses 1 and 2. We think that this was the effect of the original drafting, but we are happy to make it explicitly clear in the Bill. I believe that this is a substantial move forward on the Government’s part, and I hope noble Lords will acknowledge this and support it. I beg to move.
Lord Pannick
Again, I am very grateful to the Minister and the Bill team. Government Amendments 69 and 70 respond positively to the concerns that I and others expressed in Committee. Therefore, I will not move Amendment 71.
“( ) For the avoidance of doubt, regulations under this section may not add to or amend the purposes mentioned in section 1(1) or amend section 1(2).”