Sanctions and Anti-Money Laundering Bill [HL]

Debate between Lord Faulks and Lord Hodgson of Astley Abbotts

3rd reading (Hansard): House of Lords
Wednesday 24th January 2018 Lords Chamber

[Lord Faulks (Con)]

My Lords, I was responsible for putting down the amendment which I think provoked this amendment to the Bill. As many noble Lords may remember, the background was anxiety expressed around the House about the fact that large parts of central London and outside London were being bought up by legal entities and companies, often with money laundered proceeds of crime and corruption—it is an increasing problem. Although the Government had committed to set up a register, they were taking some time about doing it and the attempt was to bring matters forward.

I am glad that my noble friend was able to give reassurance to the House that the register would be coming forward and that a Bill would be drafted, and indeed went further by promising that there would be regular reporting about progress. That, as I understand it, is the purport of proposed new subsection (3).

I am sorry that I have banged on about this issue for some time—throughout the passage of Criminal Finances Act, through Questions and through the course of this Bill—but I remain unrepentant. I was particularly reassured about this when I attended a lecture given by the distinguished author and journalist Misha Glenny on Monday. He has spent 10 years or so studying international crime and money laundering and is the author of the book McMafia, which is now the basis of a successful television series. He outlined for the audience the scale of money laundering throughout the world, principally following the collapse of communism, and how it has spread to all sorts of jurisdictions, the United Kingdom being one in principle. He showed the audience a map of central London showing the extent to which prime London property is now owned by kleptocrats: let us not beat about the bush—that is the position. He said, however, that worldwide there is a feeling that we should be fighting back against this appalling scourge of money laundering. He identified the most effective way this country could do this as being to set up a register to make sure that nobody could hide behind the cloak of anonymity and thus be able to launder the proceeds of crime through central London property. This is why this remains an important procedure.

I am very glad that the Government are committed to doing what they said they will do. I will be keeping the Government up to the mark, as I am sure other noble Lords will. My noble friend Lord Hodgson has one query about the amendment. Subject, of course, to the clarification that my noble friend Lord Naseby seeks, I join others in thanking the Minister and his Bill team for their co-operation on this issue and on all issues. My real sense in dealing with the Bill is that it is not a party political exercise at all; there is a real cross-party endeavour to make sure that this is as effective as possible.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have put my name to various amendments on this issue, going back to the Criminal Finances Act last April, and I add my thanks to my noble friend for having listened so intently and for having tabled Amendment 3, which we are debating this afternoon. As I prepared for this discussion in Committee, I raised a couple of points with his office. As ever, he and his office were punctilious in responding, but some clarification might be helpful for those of us who are not as accustomed and learned in the law as others are.

The first issue concerns commencement. Originally, reading this through, it appeared to fall under a clause where the commencement was set by the Secretary of State and that was the trigger for the 12-month clock. I was concerned that we might have a delay in the Secretary of State triggering this clause: it was not in Clause 54. The commencement of each clause is set down, but the commencement might be delayed. The Minister’s office pointed out that Amendment 5 triggers the clock on Royal Assent. It would be helpful if he could make that clear. It would also be helpful if he could say when he expects Royal Assent to take place, although I quite understand that he cannot give a commitment. If Royal Assent is delayed, let us say through the summer, it might be nearly two years before we get the first report: if commencement were to start in August or September, it would be September 2019 before we get news of any progress whatever. So it would be helpful to the House if my noble friend, either now or by writing to those of us who have been involved in the proceedings on this Bill, will say how and when he expects the clock to start ticking.

My second point concerns an omission in the words of Amendment 3, which we are debating. When my noble friend Lord Faulks and I tabled Amendment 75 —and earlier amendments—it did not cover just a register of companies and other legal entities registered outside the UK that own or buy UK property but also covered those which,

“bid for UK government contracts”.

Those words do not appear in the amendment before us today. My noble friend’s officials have drawn my attention to, and indeed he has mentioned, the Written Ministerial Statement, tabled today, that commits the Government to dealing with a public register of beneficial owners of non-UK entities that own or buy UK property or which participate in UK government procurement. So, that is covered in the statement, but it is disappointing that we do not have it in the Bill, which is where we started and what we hoped for when we set out on this long and rather stony road.

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Lord Faulks and Lord Hodgson of Astley Abbotts

Wednesday 17th January 2018 Lords Chamber

[Lord Faulks (Con)]

My Lords, in May 2016 at the international anti-corruption summit, the Government committed to create a new register showing the beneficial owners of overseas companies that own, or want to buy, property in the United Kingdom. This was to encourage transparency and was intended to play a significant role in combating corruption and money laundering. Many noble Lords feel a sense of dismay, as I do, that large parts of central London and other parts of the country are dark at night, with property wholly unoccupied or occupied for brief periods only. Who owns these properties? We simply do not know, there being no obligation to identify beneficial ownership of foreign companies which own property yet no restriction on foreign ownership.

We may not know, but we have strong suspicions. Transparency International says that £4 billion-worth of property in London is bought with suspicious wealth. Edward Lucas, a Times journalist with considerable knowledge of this subject, has written that,

“colossal sums of money, stolen from the Russian people”,

have flowed,

into the City of London and into the luxury end of the property market”.

All this at a time when young people struggle to get on to the property ladder and to live anywhere remotely near their place of work.

During the passage of the Criminal Finances Bill, I put down an amendment in similar terms to the one now before your Lordships’ House. That was in April 2017, and I could not follow through because of the wash-up. I was, however, given reassurance by my noble friend Lady Williams that the matter was in hand and would be taken forward,

“as soon as parliamentary time allows”.—[Official Report, 25/4/17; col. 1334.]

In July 2017, I asked an Oral Question about progress with the register. I was reassured this time by my noble friend Lord Young of Cookham—few are more reassuring than he is—that:

“Good progress is being made”,


and that the Government were,

“determined to honour the commitment to introduce such a register”.—[Official Report, 10/7/17; col. 1081.]

Then I put down an amendment to this Bill, as it was plainly in scope. When my noble friend Lord Hodgson of Astley Abbotts moved the amendment in my absence, he also was reassured, this time by my noble friend Lord Bates, who did not commit the Government to any timetable but did say that the Government would publish the response to calls for evidence,

“early in the New Year”. —[Official Report, 6/12/17; col. 1085.]

The responses have been in since March 2017.

I thank my noble friend Lord Hodgson for his support in this matter and the noble Baroness, Lady Bowles, and the noble Lord, Lord Collins, who have also put their names to this amendment. I also thank my noble friend Lord Freeman for his support and the noble Lord, Lord Rooker, who is sadly not in his place, but who left the House spellbound with his description of a kleptocracy tour around central London. I also pay tribute to the Minister, the noble Lord, Lord Ahmad, who has shown characteristic willingness to meet us, and to the Bill team and others across government who have endeavoured to explain how complex this all is.

However, the time has come not for reassuring words but for action. Something more substantial is needed. It is a supreme irony that this country’s adherence to the rule of law encourages criminals and fraudsters to invest here, when in their own countries there may be little or no respect for the rule of law. Are we to stand idly by and to act in effect like a handler of stolen goods? My amendment would allow the Government 12 months from the passing of the Act to set up the register. Given that the Bill has not yet even started in the Commons, there is some time to go before the clock starts ticking. I believe this House is very concerned about this issue. I beg to move.

[Lord Hodgson of Astley Abbotts]

My Lords, my name is on this amendment, and I rise with a sense of what I can only describe as weary resignation to speak in support of it once again. My feelings can probably best be summarised by that oft-quoted remark from a famous football manager—I forget which one—that, “I have a sense of déjà vu all over again”. We have been round this topic many times, both on this Bill and, as my noble friend said, during the proceedings of the Criminal Finances Bill in the spring of last year. My noble friend Lord Faulks has laid out the case with his well-known surgical precision, so I am forced to remember that other famous saying, this time about your Lordships’ House: “Everything that can be said on this topic has been said, but not everybody has yet said it”. Brevity is the order of the day, so I will just set out five quick facts.

First, given this country’s long-standing respect for property rights, stretching back now over 300 years, the UK is a particularly attractive place in which to invest in property assets. Secondly, this country has an extensive and well-resourced financial services sector, in which large transactions can be, if not hidden, at least made to not appear unduly large. Thirdly, a substantial number of investors from all corners of the globe have invested in property in both London and our other leading cities. Fourthly, a number of overseas investors have chosen to make their investments in UK property through a company, so enabling them to conceal their identity. Fifthly, recognising the potentially malign confluence of the above in 2016—two years ago, as my noble friend has mentioned—the Government committed to the creation of a register enabling the identification of the beneficial owners of those overseas companies that had investments in UK property. Those are five facts on which I believe there is general agreement, but still nothing has happened. In another phrase, there has been lots of jaw-jaw but so far no war-war. There have been extensive consultations and discussions of technical difficulties but no clearly timetabled way forward.