Economic Crime (Transparency and Enforcement) Bill

Debate between Lord Clement-Jones and Lord Rooker

Committee stage
Monday 14th March 2022 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, I shall speak to Amendment 53. I thank the noble Lords, Lord Cromwell and Lord Vaux, for their support, although I understand that they would like to see this tweaked to go further. I also thank the noble Lord, Lord Eatwell, for his supportive comments.

The Bill needs to be comprehensively amended to close the loopholes that currently allow professional enablers to undermine the effectiveness of, and even circumvent, the checks aimed at detecting, disrupting and deterring economic crime. One of the key ways this can be done is by imposing a positive duty on professional enablers to disclose knowledge or reasonable suspicion that misleading, false or deceptive information has been provided to the registrar of overseas entities.

As I set out on Second Reading, professional enablers, such as lawyers, accountants and bankers, are the gatekeepers of economic crime and the Government need to adopt a comprehensive strategy towards them. Given the nature of their work, there is an inherently high risk that these professionals may unwittingly enable economic crime, but there are also enablers that specialise in services aimed at concealing the source of wealth or ownership so as to frustrate the objectives of the law.

This poses a particularly acute challenge in the context of the Bill’s attempt to tighten the checks around the beneficial ownership of property by overseas entities. The UK’s 2017 national risk assessment of money laundering and terrorist financing revealed that 50% of suspicious activity reports related to the legal sector in 2016 were linked to the property market, illustrating that real estate transactions are especially susceptible to money laundering.

As the noble Lord, Lord Vaux, very eloquently deconstructed, the Minister prayed in aid regulation by the Solicitors Regulation Authority and the Institute of Chartered Accountants in England and Wales on Second Reading. Does the Minister really believe that these regulators are the way to tackle these professional enablers? The current model for supervising professional enablers is fragmented and weak. In the legal and accountancy sectors alone, there are 22 different professional body supervisors, or PBSs. In its 2021 report, the Office for Professional Body Anti-Money Laundering Supervision found that the vast majority—some 81%—of these legal and accounting PBSs do not implement an effective risk-based approach to supervising their members as required by the money laundering regulations. Where is the evidence that they can do the kind of job needed to root out corrupt behaviour in sanctions avoidance or as envisaged by this Bill?

In summary, it is critical that the Bill addresses the heightened risk that professional enablers, particularly conveyancers and lawyers, will frustrate the objectives of the register of overseas entities. Beyond this modest amendment, urgent reform is needed—I hope it will take place in the second Bill—to ensure that there is effective, comprehensive supervision of professional enablers. This should be fully addressed when we come to the second economic crime Bill.

[Lord Rooker (Lab)]

My Lords, I had not intended to speak today. I came to learn and listen to the experts on areas I do not know much about. But listening to the noble Lords, Lord Cromwell and Lord Clement-Jones, I am reminded of an example. I know this would not be classed as money laundering, but the well-known spiv, Aaron Banks, was responsible for what is, I think, the biggest political donation in British history—I think it was £8 million—during the Brexit referendum period. When it came to investigation by the Electoral Commission, which had the responsibility for doing this, he was not an unwitting enabler. His conclusion was, “We’re cleverer than the regulator.” The Minister does not want to be faced with that during the passage of this Bill and its actions, so he would be very wise to accept the spirit of some of these amendments.

Deregulation Bill

Debate between Lord Clement-Jones and Lord Rooker

Thursday 5th February 2015 Lords Chamber

[Lord Rooker (Lab)]

My Lords, I agree with what the noble Lord, Lord Grade, has just said and want to deal briefly with a procedural point. I had the privilege of chairing the Joint Committee which gave pre-legislative scrutiny to the Bill between July and December 2013—in fact, I am so fed up with it that I am bored stiff. However, this measure was not in the Bill. Therefore, I would argue from Parliament’s point of view that it did not have the scrutiny that such an important issue would justify, being put in in the Commons, being done in Grand Committee in this House and then being dealt with now.

It is almost a mirror image of the argument that we have just had on the counterterrorism Bill, where an attempt was made to make a change when it was known that inquiries are going on with a deadline next year for that matter to be properly dealt with, and the noble Lord, Lord King, therefore withdrew his amendment. This is exactly the same. As we have just heard, the licence fee is fixed—in writing, as it were—from 2010 to 2017. I do not want to see people in prison for debts—it is a complete waste—but the risk to the BBC of what might happen if this amendment is not carried is so substantial because of the forces charged up against the BBC in other guises. I declare an interest: I do not have Sky because I discovered that Rupert Murdoch is still alive. So I do not have these sorts of conflicts, but the fact is that those forces are lined up. There should be a proper duly considered argument in Parliament, maybe with differentials, after the review and in the context of us all knowing that a big discussion is going on, rather than its being dealt with in the Bill, which does not give this issue the scrutiny that it justifies because of the way that the Bill has gone through Parliament. I will support the amendment if it is pushed to a vote.

[Lord Clement-Jones (LD)]

My Lords, I agree with the noble Lord, Lord Rooker. As only the fourth spear-carrier on this amendment, I want to make just a few, very brief points.

We are, I hope, widely agreeing that this debate is purely about timing. As we have heard, there are supporters of the amendment who may go different ways. I happen to agree with the noble Lord, Lord Rooker, that this measure is in a sense a Trojan Horse designed to damage the BBC, but I suspect that there are many others who will disagree with me, including the noble Baroness, Lady Corston.

As we have heard from around the House, it is vital that licence fee penalties are considered in the round as an integral part of the review of the BBC’s charter and funding. The BBC has an agreed settlement until March 2017 and based its long-term planning around that. Unforeseen reductions in income will impact services and content to the detriment of licence fee payers—that is, if a different arrangement is made beforehand which has an impact on licence fee collection.

As we heard from the noble Lord, Lord Watson, there is another very important reason, quite apart from that budgetary one. It is about the undertaking given by government back in 2010. The noble Lord quoted from the letter.

The noble Baroness, Lady Howe, has retabled her amendment and of course I strongly support it. We were not given a very decent response by the Government in Committee. My noble friend Lord Gardiner stated:

“Surely it does not make sense to apply any constraints that could hinder moving to a new enforcement regime; nor would any such constraint represent the best approach for licence fee payers, or the courts system”.—[Official Report, 11/11/14; col. GC 42.]

I believe entirely the opposite: this amendment, if adopted, would represent the best approach for licence fee payers. This is not an artificial limitation on timing. As my noble friend suggested, it is about keeping to the letter and spirit of the 2010 licence fee settlement to avoid unforeseen reductions in income adversely impacting BBC services and content, and to make sure that any changes to the enforcement regime are part and parcel of the charter review.