Sanctions and Anti-Money Laundering Bill [HL]

Lord Collins of Highbury Excerpts

2nd reading (Hansard): House of Lords
Wednesday 1st November 2017 Lords Chamber

[Lord Collins of Highbury (Lab)]

My Lords, I, too, start by thanking the noble Baroness, Lady Anelay, for her contribution. Laying down that evidence has been really important and will govern a lot of what we will consider in relation to the Bill. I am sad that she has left the Government. It is not often that opposition and government parties can work together, but we have because we have a common interest in defending democracy and supporting human rights, and in particular I welcomed her work on LGBT rights. She will be sorely missed from the Government, but I know that she will continue to work from the Back Benches on those important issues, and I welcome the opportunity to work with her.

I also thank my noble friend Lord Hain for his contribution, again because he has enabled us to consider what we are trying to deal with in this legislation. His example and his evidence will be at the forefront of our minds when we consider the specific points in the Bill. It was an excellent contribution.

If we take any of the most pressing foreign policy challenges of our time, from North Korea’s nuclear weapons programme to ethnic cleansing in Myanmar, the likelihood is that sanctions will feature heavily in discussions about how we should respond. But if those examples demonstrate the importance of sanctions as a foreign policy tool, they also point to some of the limitations of relying too heavily on sanctions alone. The case of Iran, on the other hand, shows that sanctions can be made to work if there is strong enough political commitment. Thanks to a combination of carefully targeted sanctions and a sustained commitment to diplomacy over 12 painstaking years, EU negotiators, led by the noble Baroness, Lady Ashton, ultimately achieved a breakthrough with Iran which led to a comprehensive nuclear deal that many had previously dismissed as unthinkable. Recent history shows above all how important it is to make careful use of sanctions as part of a clear, overarching diplomatic strategy. This is just one reason why the Bill is so important.

It is also important because passing new legislation is a legal necessity, as sanctions currently take effect in the UK almost exclusively via EU regulations, and we need a new domestic legal framework to be in place before we leave. Without this, we would not be able to fulfil even our most basic international obligations as a member of the United Nations. On that basis, Labour fully recognises the need for new sanctions legislation, and we will not obstruct the Bill unnecessarily. At the same time, we believe there are areas that will need to be improved, and to that end we will put forward a number of amendments to address some of our particular concerns.

In his introduction, the Minister emphasised the need for co-operation to ensure that sanctions are effective—and the examples given by the noble Baroness, Lady Anelay, amplified this. We cannot work in isolation. In relation to non-UN sanctions, how will the Government ensure not just that UK-EU co-operation on sanctions continues after we leave the EU but that we maintain the ability to shape decisions on EU sanctions when they are imposed? The Lords EU Committee has warned that the UK must continue to co-ordinate sanctions policy with the EU after Brexit. I know it is a lot to ask of the noble Lord, and he may be unable to respond today, but will he set out at some stage of the Bill as it progresses the detailed plans for future co-operation and effective co-ordination between the UK and the EU?

As we have heard in the debate tonight, one concern about the Bill is that there is no requirement for Ministers to set out an overarching strategy for achieving any specified goals. We will seek to amend the Bill in order to address this omission. We will also seek to require robust impact assessments, setting out any potential humanitarian consequences of sanctions and what steps will be taken to mitigate this risk. We will certainly back the calls for a streamlined process for granting any necessary exemptions to sanctions on humanitarian grounds.

We hosted a round table with NGOs and, although I appreciate what the noble Lord said in relation to the powers within the Bill to grant exceptions, there are concerns about how these will operate in practice, and they will need to be addressed when we scrutinise the Bill clause by clause. In particular, as the NGO sanctions and counterterrorism working group said, is the Minister aware of how important it is for licences to be of the duration of an NGO’s programme and to be relatively open-ended, and subject to change only in negotiation with the NGO? If we do not have that, we will be putting the staff and the assets of the NGOs at risk. I hope the Minister will be able to assure us that the scope and application of Clause 14 will meet the expectations of NGOs.

We will seek to improve transparency by requiring the Government to publish an annual report on sanctions implementation. Ministers would have to continually reassess whether sanctions were working, whether enough was being done to meet the relevant objectives via the diplomatic track and whether adequate safeguards were in place to prevent any unintended consequences, humanitarian or otherwise. Only by requiring such information to be made public can the Government truly be held to account.

The next item of concern that Labour will seek assurances on is the need for ongoing parliamentary oversight of sanctions policy. Currently, the only review mechanisms that the Bill provides for are ministerial, and the Government’s implementation of sanctions will therefore essentially be self-policing, setting aside the individual rights for judicial review. This is clearly unacceptable. We will table amendments to guarantee greater parliamentary scrutiny throughout the process, including on decisions to lift sanctions as well as decisions to impose them in the first place. I hope, bearing in mind the comments that have been made across the Chamber today, that we can have that on a cross-party basis.

As the noble and learned Lord, Lord Judge, said, the Bill contains a number of Henry VIII powers. We look forward to the DPRRC’s report on this with great interest. Looking at the committee’s timetable, I hope we will have that in plenty of time for Committee stage. In Clause 39, the Bill creates a power for new types of sanctions to be introduced by regulation. This is said to “future-proof” the Bill. It will be subject to the affirmative process, but there is no scope for amending SIs. The idea that there are new challenges and therefore we need new laws, which will simply be done by these means, just does not seem accessible.

With regard to these powers, I always admire the ability of the noble Lord, Lord McNally, to be relatively selective in his memory. The Lib Dems were of course in government, and he presided over some of the things that concerned me most about the coalition Government regarding the reduction in access to justice, which will remain at the forefront of my memory. I recognise that often opposition parties will say something in opposition but, when they feel the full weight of responsibility in government, they say something else. So I accept what the noble Lord says, but the job of this House is to scrutinise. In our parliamentary democracy, I am proud that we have the appropriate checks and balances, and the role of the courts is certainly important in that. That is why I look forward to working with noble and learned Lords, and others, to ensure that there are those proper checks and balances.

As noble Lords have said, is it really appropriate for the whole of the new anti-money laundering legal framework to be produced almost entirely by delegated legislation? This House cannot amend regulations. If they are not subject to proper parliamentary review and scrutiny, it may be that it will be much more difficult to prevent future backsliding in anti-money laundering provisions, particularly as London begins to compete with Frankfurt. There may be other pressures on the Government in relation to these issues. Exactly how does the Minister intend to ensure that Parliament has a major role in scrutinising future changes to the AML regime?

The noble and learned Lord, Lord Judge, referred to several provisions in the Bill, including Schedule 2. I particularly want to raise the issue of Schedule 2 and the powers to create new criminal offences in relation to money laundering via delegated legislation. Is that really appropriate? In the Delegated Powers and Regulatory Reform Committee’s report of 2014, Special Report: Quality of Delegated Powers Memoranda, it stated:

“Where the ingredients of a criminal offence are to be set by delegated legislation, the Committee would expect a compelling justification”.


I do not think that the Government’s memo on this gives us a real compelling justification, and I hope that the Minister will be able to address that firmly. We will certainly be looking at that very carefully as we go through the Committee stage.

Finally, and for me perhaps most importantly, bearing in mind the comments in the contribution of the noble Baroness, Lady Anelay, we will seek to expand the criteria for imposing sanctions in the future, including a strong and unequivocal commitment to promoting human rights as part of British foreign policy. The absence of such a commitment in the Bill is, for me, disappointing. I hope we will have the opportunity to address that. The next Labour Government will be fully committed to observing these principles regardless of whether our amendments succeed. I hope that, nevertheless, we will be able to address these issues.

One of the things that will be uppermost in our minds, and which we must not forget, is that the decision of the people in the referendum to leave the EU will have consequences. A major consequence will be our ability to influence a collective and co-operative approach to some of the most oppressive regimes and oppressed people in the world.