Global Anti-Corruption Sanctions Regulations 2021

Lord Garnier Excerpts

Wednesday 26th May 2021 Lords Chamber

[Lord Garnier (Con)]

My Lords, I begin by declaring an interest in that some of the casework I do in my private practice at the Bar involves acting for the Serious Fraud Office, which deals with cases involving complex financial crime, not least corruption. From time to time I have also advised others who may have thought about behaving corruptly or have been accused of it.

I have a small procedural point on these regulations, which, as my noble friend clearly and carefully explained at the outset of our debate, came into force just a month or so ago. Is there some magic in that they came into force before this House had an opportunity to discuss them? I fully accept that politically and in practical terms they are wholly uncontroversial, but I wonder whether there is some magic in our receiving them a month after the other place, or whether that is just one of those things.

These sanctions are designed to capture individuals or entities profiting from bribery or misappropriation of state funds from any country outside the United Kingdom, as well as colluding with terrorists and drug traffickers. Those who are caught by these sanctions will be prevented from entering the United Kingdom, opening bank accounts here or doing business with any United Kingdom businesses. Any assets they hold in this country are also frozen.

My noble friend mentioned the 22 designations that have already been made. They are very welcome in themselves but also because, as the noble Lord, Lord Anderson of Swansea, indicated—perhaps my noble friend the Minister did as well—they create a form of alignment and demonstrate that our sanctions regime, underpinned by the 2018 Act, is moving closer to those of the United States and Canadian, which, I think it is fair to say, are a great deal more effective than what we used to have in this country. This shift of approach is to be welcomed, and I hope that the European Union as an institution and its nation states will look carefully at what is being done in this country and in the United States and Canada to see whether there is room for closer alignment between their regimes and what is now in force here.

One benefit is that, unlike most United Kingdom sanctions regulations, which target specific countries or individuals within specific countries, this set of regulations, along with the human rights sanctions that came into force in 2020, focuses on individuals and entities who impact the economy of a country through corrupt practices. As the noble Lord, Lord Anderson, said, this mirrors the approach taken by the American global Magnitsky programme. It is hardly surprising that most, if not all, of the 22 individuals caught by the new announcement on 23 April are already impacted by the American Magnitsky programme.

The noble Lord, Lord Anderson, also mentioned serious corruption. I hope it is not too tedious or lawyerly a point, but Regulation 4(1) says:

“The purposes of the regulations contained in this instrument are to prevent and combat serious corruption.”


So far, so good. Regulation 4(2) then defines corruption as

“bribery; or … misappropriation of property”,

but it does not seek to define “serious corruption” and how it differs, if at all, from any other sort of corruption. All sorts of rather silly jokes were made about serious organised crime and why it had to be “serious”. What was wrong with simply talking about organised crime?

Corruption clearly has a terrible effect, particularly on third-world economies; my noble friend the Minister mentioned this in his opening remarks. It also impacts the cost of doing business for our own businesses within this economy, so I hope I am not making a facile or light point. I think that greater clarity needs to be provided by the Government in relation to the expression “serious corruption”, which is used quite a lot throughout the regulations. Of course corruption is defined, but I wonder whether there is any particular magic, as far as the policy behind these regulations is concerned, in the use of the adjective “serious”.

Finally, I will touch on the Office of Financial Sanctions Implementation. This body will be needed, and is needed, to reinforce or underpin the sanctions that these regulations describe. But in the last four years, the Office of Financial Sanctions Implementation has handed down civil penalties on just four occasions, only two of which exceeded £10,000 in value. I do not know the facts of those cases, but we want to be taken seriously, both in this country and internationally, and to create a regime that deters kleptocrats and international corruption, be it serious or otherwise, and certainly the sort of serious corruption that adversely affects particularly the economies of poor countries. South Sudan was one of the examples; I am not sure about the economies of the South American states that were covered by the examples. If these regulations are to have a deterrent effect on the leaders of Belarus or other kleptocracies, for example, we need to be sure that these new sanctions will be properly underpinned by action by the Office of Financial Sanctions Implementation and that this body is given the teeth, or uses the teeth it has, to enforce our anti-corruption policies. I hope my noble friend the Minister can reassure us of that today.

As I say, these are wholly uncontroversial regulations. I see that I have gone well over my allotted time, for which I apologise. With these few brief remarks, even if they were longer than they should have been, I hope that my noble friend will be encouraged by the support he has and is able to provide us with a few brief explanations at the end of the debate.