Asked by: Lord Carlile of Berriew (Crossbench - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the prevalence of money laundering in the online advertising sector, and whether they have proposals to deal with the issue.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government recognises that online advertising may be targeted by criminals to commit fraud and that illicitly obtained funds from fraud can be laundered and used for further criminal purposes. The upcoming National Risk Assessment (NRA) for money laundering and terrorist financing will consider how the proceeds of fraud are laundered within the UK.
The Government welcomes pledges to prevent fraud by tech companies under the Online Fraud Charter and we are committed to working with industry to reduce fraud. The Online Safety Act will require the largest user to user and search services to take steps to prevent the publication or hosting of any fraudulent advertising on their service.
DCMS are leading the Online Advertising Taskforce, which is working to improve transparency and accountability in the online advertising supply chain. One of the Taskforce's key objectives is to improve the evidence around the scale and threat of the illegal harms.
Asked by: Lord Carlile of Berriew (Crossbench - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what steps they are taking to ensure that ISIS loses any capability to raise funds in the UK through the use of (1) non-fungible tokens (NFTs), and (2) other ways to exploit NFT technology.
Answered by Baroness Penn
The government has implemented various measures to combat terrorist financing, disrupt funding of terrorist groups, and address the illicit crypto use and emerging fintech.
This includes extending the UK’s Money Laundering Regulations (MLRs) to the cryptoasset sector in January 2020. The UK assesses cryptoasset Money Laundering and Terrorist Finance (ML/TF) risks case-by-case, allowing the FCA (Financial Conduct Authority) to regulate the rapidly evolving industry. Firms involved in activities that are described as involving Non-Fungible Tokens (NFTs) will be supervised and subject to enforcement, if they deal with cryptoassets as defined in the regulations.
Separately, the traditional art market is regulated for AML purposes so businesses dealing with NFTs which could reasonably be classified as “works of art” and meet the wider relevant criteria for supervision by HMRC, are required to comply with AML regulations to combat terrorist financing.
To prevent terrorist organisations such as ISIS exploiting blockchain technology, the UK is implementing the Financial Action Task Force’s (FATF's) 'Travel Rule') which enhances information sharing and retention for cryptoasset transfers to detect terrorist financing.
We are also updating UK CT legislation with the Economic Crime and Corporate Transparency (ECCT) Bill to prevent terrorist groups from exploiting NFT technology. This empowers law enforcement to seize, detain, freeze, and forfeit terrorist cryptoassets, with the revised definition of cryptoassets encompassing various technologies that utilize cryptography and distributed ledger technology, including NFTs.
The UK continues to engage internationally to mitigate illicit finance risks associated with cryptoassets including NFTs, and constantly reviews legislative tools to ensure we can keep pace with evolving terrorist financing threats.
Asked by: Lord Carlile of Berriew (Crossbench - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether, following the recent report by the National Audit Office and the collapse of Carillion, they plan to produce new guidance on the circumstances under which PF2 contracts should be used in future.
Answered by Lord Young of Cookham
Private Finance 2 proposals should be assessed in line with The HM Treasury’s Green Book, which is currently being revised and will be republished in due course.