Sanctions and Anti-Money Laundering Bill [Lords]

Alan Duncan Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 1st May 2018 Commons Chamber

[The Minister for Europe and the Americas (Sir Alan Duncan)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 1—Scottish Limited Partnerships: partner requirement—

“(1) For the purposes of preventing money laundering, where a limited partnership registered in Scotland has general partners at least one of those must be a British citizen.

(2) Where a limited partnership registered in Scotland has limited partners at least one of those must be a British citizen.

(3) In this section—

a “limited partnership registered in Scotland” means a partnership registered under the Limited Partnerships Act 1907;

“British citizen” has the meaning given in part 1 of the British Nationality Act 1981.

“general partner” has the meaning given in section 4(2) of the Limited Partnership Act 1907;

“limited partner” has the meaning given in section 4(2A) of the Limited Partnership Act 1907”.

New clause 6—Public registers of beneficial ownership of companies registered in British Overseas Territories—

“(1) For the purposes of the detection, investigation or prevention of money laundering, the Secretary of State must provide all reasonable assistance to the governments of the British Overseas Territories to enable each of those governments to establish a publicly accessible register of the beneficial ownership of companies registered in each government’s jurisdiction.

(2) The Secretary of State must, no later than 31 December 2020, prepare a draft Order in Council requiring the government of any British Overseas Territory that has not introduced a publicly accessible register of the beneficial ownership of companies within its jurisdiction to do so.

(3) The draft Order in Council under subsection (2) must set out the form that the register must take.

(4) If an Order in Council contains requirements of a kind mentioned in subsection (2)—

(a) it must be laid before Parliament after being made, and

(b) if not approved by a resolution of each House of Parliament before the end of 28 days beginning with the day on which it is made, it ceases to have effect at the end of that period (but without that affecting the power to make a new Order under this section).

(5) In calculating a period of 28 days for the purposes of subsection (4), no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.

(6) For the purposes of this section, “British Overseas Territories” means a territory listed in Schedule 6 of the British Nationality Act 1981.

(7) For the purposes of this section, “a publicly accessible register of the beneficial ownership of companies” means a register which, in the opinion of the Secretary of State, provides information broadly equivalent to that available in accordance with the provisions of Part 21A of the Companies Act 2006.”

This new clause would require the Secretary of State to take steps to provide that British Overseas Territories establish publicly accessible registers of the beneficial ownership of companies.

New clause 14—Public registers of beneficial ownership of companies in the Crown Dependencies—

“(1) For the purpose of preventing money laundering, the Secretary of State must provide all reasonable assistance to the governments of the Crown Dependencies to enable each of those governments to establish a publicly accessible register of the beneficial ownership of companies registered in that government’s jurisdiction.

(2) The Secretary of State must, by the deadline set for the implementation of the European Union’s 5th Anti-Money Laundering Directive, prepare a draft Order in Council requiring the government of any Crown Dependency that has not introduced a publicly accessible register of beneficial ownership of companies within their jurisdiction to do so.

(3) The draft Order in Council under subsection (2)—

(a) must be laid before Parliament after being made, and

(b) if not approved by a resolution of each House of Parliament before the end of the 28 days beginning with the day on which it is made, ceases to have effect at the end of that period (but without that affecting the power to make a new Order).

(4) In calculating a period of 28 days for the purposes of subsection (4), no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days.

(5) For the purposes of this section, a “publicly accessible register of beneficial ownership of companies” means a register which, in the opinion of the Secretary of State, provides information broadly equivalent to that available in accordance with the provisions of Part 21A of the Companies Act 2006 (information about people with significant control).

(6) For the purposes of this section, “Crown Dependency” means—

(a) any of the Channel Islands;

(b) the Isle of Man.”

New clause 19—Scottish Limited Partnerships: UK bank account requirement—

“(1) For the purposes of preventing money laundering, where a limited partnership registered in Scotland has general partners at least one of those must have an active UK bank account.

(2) Where a limited partnership registered in Scotland has limited partners at least one of those must have an active UK bank account.

(3) In this section—

a “limited partnership registered in Scotland” means a partnership registered under the Limited Partnerships Act 1907;

“general partner” has the meaning given in section 4(2) of the Limited Partnership Act 1907;

“limited partner” has the meaning given in section 4(2A) of the Limited Partnership Act 1907.”

Government amendments 10 to 12.

Amendment 32, in clause 1, page 2, line 17, at end insert—

“(i) further accountability for, or act as a deterrent to, the commission of a gross human rights abuse or violation.”

This amendment would enable sanctions to be made for the purpose of preventing, or in response to, a gross human rights abuse or violation.

Amendment 33, page 2, line 35, at end insert—

“(5A) In this section, conduct constitutes “the commission of a gross human rights abuse or violation” if each of the following three conditions is met.

(5B) The first condition is that—

(a) the conduct constitutes the torture of a person who has sought—

(i) to expose illegal activity carried out by a public official or a person acting in an official capacity, or

(ii) to obtain, exercise, defend or promote human rights and fundamental freedoms, or

(b) the conduct otherwise involves the cruel, inhuman or degrading treatment or punishment of such a person.

(5C) The second condition is that the conduct is carried out in consequence of that person having sought to do anything falling within subsection (2)(a)(i) or (ii).

(5D) The third condition is that the conduct is carried out—

(a) by a public official, or a person acting in an official capacity, in the performance or purported performance of his or her official duties, or

(b) by a person not falling within paragraph (a) at the instigation or with the consent or acquiescence—

(i) of a public official, or

(ii) of a person acting in an official capacity, who in instigating the conduct, or in consenting to or acquiescing in it, is acting in the performance or purported performance of his or her official duties.

(5E) Conduct that involves the intentional infliction of severe pain or suffering on another person is conduct that constitutes torture for the purposes of subsection (2)(a).

(5F) It is immaterial whether the pain or suffering is physical or mental and whether it is caused by an act or omission”.

This amendment, which is consequential on Amendment 32, would define what constitutes the commission of a gross human rights abuse or violation. The commission of a gross human rights abuse or violation would include the torture of a person who had sought to expose the illegal activity of a public official, or the torture of a person who had sought to defend human rights or fundamental freedoms, by a public official or a person acting in an official capacity.

Government amendments 13 to 17.

Amendment 20, in clause 56, page 43, line 7, after first “1”, insert

“, section (Public registers of beneficial ownership of companies registered in British Overseas Territories)”.

This amendment is consequential on NC6.

Government amendment 18.

Amendment 31, in title, line 5 after “objectives”, insert

“or to further accountability for, or act as a deterrent to, the commission of a gross human rights abuse or violation”.

This amendment to the long title would be consequential on Amendment 32.

[Sir Alan Duncan]

This group contains new clauses and amendments regarding three related issues that I will discuss in turn: imposing sanctions for gross human rights violations, or what is now popularly known as the Magnitsky amendment; Scottish limited partnerships, which are of deep concern, particularly for the Scottish National party; and public registers of beneficial ownership in the overseas territories. In two of those areas, the Government are taking action to tackle abuses and tighten up standards: through Government amendments on Magnitsky and through a consultation document on Scottish limited partnerships.

[Alison Thewliss (Glasgow Central) (SNP)]

Will the Minister give way on that point?

--- Later in debate ---

[Sir Alan Duncan]

It is a bit early, but I will do so if the hon. Lady insists; I am ever obliging to the hon. Lady.

[Alison Thewliss]

The Minister mentions the consultation on SLPs. Does he not accept that there has already been a consultation on SLPs and that it closed over a year ago, so to have another consultation is just wasting time?

[Sir Alan Duncan]

If I might say so ever so politely to the hon. Lady, she is jumping the gun slightly given that I am only at the end of my first paragraph, and as she knows there have been some detailed discussions through the usual channels. I will address the matter she has asked about in more detail later on; if I may, I will tackle the three issues to which I have referred in the order that I raised them, in order to satisfy the House that we are looking at all concerns in detail and genuinely.

First, sanctions for gross human rights violations have clearly been an issue of significant concern to Members on both sides of the House, as was made clear by many who spoke on Second Reading and in Committee. I fully recognise why Members and many people outside this House want to include gross human rights abuses in the Bill explicitly as a reason why sanctions can be applied, particularly in reference to the abhorrent case of Sergei Magnitsky in Russia.

In her speech to the House on 14 March, the Prime Minister made clear the Government’s intention to bring forward a Magnitsky amendment to the Bill, and as the House can see we have fulfilled that obligation by doing so for discussion in the House today. As a result of that commitment, we have worked closely, constructively and genuinely with Members on both sides of the House, including some who have campaigned for this amendment at great length, particularly my right hon. Friends the Members for Newbury (Richard Benyon) and for Sutton Coldfield (Mr Mitchell). I also genuinely thank the hon. Member for Bishop Auckland (Helen Goodman), my opposite number, and the hon. Member for Oxford East (Anneliese Dodds). Together we have worked to put together a form of words that now enjoys cross-party support. We have tabled amendments that we hope will capture the maximum possible consensus in this area.

[Chris Bryant (Rhondda) (Lab)]

I am truly grateful for everything that the Minister and all those he has referred to have done in relation to the Sergei Magnitsky amendment. It is obviously important that he has captured the consensus of the House, but it is even more important that we capture all those, in particular those from Russia, who have come to this country and used it for money laundering purposes and for hiding their assets. Is he confident that we will be able to do that as a result of this legislation?

[Sir Alan Duncan]

I am confident of that, as I will explain further in a moment.

As is traditional on Report, it is important that I explain what the amendments do, if ever so briefly. Amendment 10 relates specifically to putting gross human rights abuses on the face of the Bill as a basis on which sanctions may be imposed. Amendments 11, 12, 14, 15, 16 and 17 are consequential to that, introducing technical changes that will follow. Amendment 13 links the definition of a gross violation of human rights to the existing definition in the Proceeds of Crime Act 2002, so that it includes the torture of a person by a public official or a person in an official capacity, where the tortured person has sought to expose the illegal activity of a public official or to defend human rights or fundamental freedoms. That will ensure that all gross human rights abuses or violations are explicitly captured.

[Toby Perkins (Chesterfield) (Lab)]

The Minister will not be surprised to know that I fully support the Government in bringing this change forward, as I am sure all Labour Members do, given that we have been asking for it for some time. On the subject of sanctions, will the Government publish the names of those who have been sanctioned under the Bill, notwithstanding what subsection (2) of new clause 3 says about not risking damage to

“national security or international relations”?

[Sir Alan Duncan]

There is an obligation to report, which I will come to in a minute. I would be happy to explain the exact details to the hon. Gentleman, although of course they are still being devised on the back of the obligations laid down in the Bill.

New clause 3 requires reports to be made—this relates to the question that the hon. Gentleman has just asked—about the use of the power to make sanctions regulations, including the specifying of any recommendations made by a parliamentary Committee on the use of that power and the Government’s response. It is right and proper that an independent review of the powers should be carried out by Parliament. This is a strong set of measures to address the Government’s approach to imposing sanctions for human rights abuses, and I would like to put it on record again that the Government are committed to promoting and strengthening universal human rights and holding to account states and individuals who are responsible for the most serious violations.

[Jo Swinson (East Dunbartonshire) (LD)]

Will the Minister outline how he envisages such a parliamentary review operating? Will it be done through specific Committees, or on the Floor of the House? Will we be able to have confidence that that procedure is robust enough to ensure that the review is appropriate?

[Sir Alan Duncan]

The hon. Lady hits on a point that illustrates the important distinction between the Executive and the legislature, even though the Executive are drawn from the legislature. We, as Ministers, are the Executive. The hon. Lady is a Member of the legislature. I will not say, “Long may that continue”, but it might. It is therefore inappropriate for us to determine in primary legislation exactly how the House should go about its business. That is for the House itself to decide. We believe that we have included in the Bill the proper impetus for the House to be able to structure itself as it wishes—through the Joint Committee on Human Rights or the Foreign Affairs Committee, for example—while saying in advance that we as the Executive will have an obligation to report back and respond to any such independent activity.

[Stephen Kinnock (Aberavon) (Lab)]

Along with other colleagues, I absolutely share the objectives of the Magnitsky provisions. I have been in touch with Bill Browder, for whom Sergei Magnitsky worked at the time of his brutal murder by the Russian authorities, and Mr Browder has made it absolutely clear to me that if this does not lead to the full publication of the names of the people who are being sanctioned and to absolute clarity on the nature of the independent review that has just been mentioned, the Bill will have failed in its objectives. It is important that the Minister understands what Mr Bill Browder is saying on this matter.

[Sir Alan Duncan]

I can say that any person sanctioned under this Bill will have their name published on an administrative list, which will be publicly available. I hope that that will reassure the hon. Gentleman, the House and all those interested in this issue.

[John Penrose (Weston-super-Mare) (Con)]

I was about to ask the same question, and the answer that the Minister has just given will be enormously reassuring to many of us, particularly because the thing that many of these kleptocrats and organised criminals really fear is the glare of public disclosure.

[Sir Alan Duncan]

I hope that I will be able to continue to address the House with similar such effect this afternoon.

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I doubt that there is anyone in this House who does not want the overseas territories and Crown dependencies to have open, public registers of company interests. If new clause 6, tabled by my right hon. Friend the Member for Sutton Coldfield (Andrew Mitchell) does not pass, how will the House be able to have confidence that the Executive will make sufficient progress as though we had compelled them to issue Orders in Council?

[Sir Alan Duncan]

I will be saying more about the overseas territories in a moment. I fully recognise the interest that my hon. Friend has shown, over many years, in the importance of protecting the interests of the overseas territories, particularly in the Caribbean. I will be able to give him deeper reassurance on this in a moment, but if I may, I will continue with my points in the order that I was planning to make them, by addressing the Magnitsky issue first, then Scottish limited partnerships, before turning to that rather more vexed issue.

Looking at the Scottish National party Benches, I turn to the separate amendments on Magnitsky tabled by the hon. Member for Glasgow Central (Alison Thewliss). While we agree with the driving principles behind the amendments, we are satisfied that the package of amendments that we have tabled—which have been signed by Members on both Front Benches—sufficiently cover the same objectives. I hope that the hon. Lady will feel that they do. As she knows from our discussions in Committee, we have approached this entire issue in a spirit of cross-party co-operation. Indeed, she has played an important part in that in her campaigning.

[Alison Thewliss]

I should like to take this opportunity to say that, having heard what the Minister has said on this matter and others, I am content not to press my amendments relating to Magnitsky.

--- Later in debate ---

[Sir Alan Duncan]

I am grateful to the hon. Lady. I am hoping for a similar response on other parts of the Bill as I proceed gingerly through the new clauses and amendments that we are discussing today. I hope that, when I proceed gingerly, no one can see that I am here at all.

Opposition amendments 31 and 32 would insert a purpose into the Bill to allow sanctions regulations to be made for the purpose of preventing, or ensuring accountability for, a gross human rights abuse or violation. As the hon. Lady has already suggested, however, our amendment 10 would add a similar purpose, so I sense that we have found common ground here. Also, just to make the record clear, Opposition amendment 33 would define what constitutes a gross human rights abuse or violation on the face of the Bill. Government amendment 13 provides a similar function through reference to a definition already existing in other legislation, as I have just explained, which is preferable for maintaining a tidy statute book. I therefore hope that our amendments meet the goals of the hon. Lady’s amendments. I sense that they do.

Setting aside a technical assessment of the Bill, I think that, on Magnitsky, we have got there. This is a very important moment for the House, and for the defence of human rights that the United Kingdom is always proud to show. All parties have come together to find consensus on ensuring that the proper legislative powers are in place to address gross violations of human rights. That is a matter of deep concern to Members on both sides of the House, to many people outside and internationally. If the amendments are agreed to today, as I am sure they will be, we can truly say that we have spoken together, united in favour of human rights, and that the voice of the United Kingdom sits alongside other countries that have adopted such legislation, and we can score it as a great achievement of which we can all be proud. Once again, I pay tribute to those who have so relentlessly and persistently campaigned for it. It is not just a triumph for the House; it is a personal triumph for them. In saying that, I look once again to my right hon. Friend the Member for Newbury in particular.

Turning to Scottish limited partnerships, we recognise the concerns that have been raised, and I assure the House that the Government are committed to making further progress. SLPs and other forms of limited partnership play a vital role in the asset management sector for the funding of asset-based contribution pension schemes and for oil and gas exploration, which matters enormously to Scotland. That makes it all the more important not just that their legitimate use is supported, but that legitimate action is taken to prevent their misuse. As hon. Members will be aware, the past decade has seen a vast increase in the number of SLPs, with the growth rate far outstripping that of the number of limited partnerships established in the rest of the UK, and we recognise the concern that SLPs are being used inappropriately. Following clear evidence of certain SLPs being misused, the Government brought them within the scope of our register of beneficial ownership. Since then, the rate of new SLP registration has declined by approximately 80%, but we recognise that more needs to be done.

Yesterday, the Department for Business, Energy and Industrial Strategy published a consultation document on limited partnership reform following its call for evidence last year. The document sets out clear options for reform. The Government propose that all those registering a limited partnership would need to be registered with an anti-money laundering supervisor. They would need to carry out due diligence before establishment, with the possibility of supervisory action. That due diligence will necessarily include identifying the beneficial owners of the SLP, including its general and limited partners when they exercise control over the SLP. That addresses the substantial purpose behind new clause 19, which would require at least one of both the general and limited partners in an SLP to have an active UK bank account, and so require that they will have been subject to due diligence for anti-money laundering purposes.

Such measures would address the substantial purpose behind the new clauses on the subject. We are further consulting on how best to require limited partnerships to retain a physical presence in the UK to ensure that there is a UK link against which any necessary enforcement proceedings can be taken. Additionally, the Department for Business, Energy and Industrial Strategy is seeking views on whether all limited partnerships should be required to file an annual confirmation statement with Companies House. Taken together, the proposals would tighten the checks on SLPs, ensure that they retain a UK presence and expose more details about their workings to public scrutiny. They would not disproportionately burden limited partnerships that operate entirely lawfully, but they would go further in reducing their potential for illicit misuse.

New clause 1 would require that, where a Scottish limited partnership has general and limited partners, at least one of each must be a British citizen. That would have the unintended side effect of disrupting the legitimate uses of corporate partners within sectors, including the venture capital sector. The Government consider that the measures on which the Department for Business, Energy and Industrial Strategy is consulting will do more to bring transparency to limited partnerships and to prevent them from being misused, without damaging their legitimate usage. The Department’s consultation will be open until 23 July, and I encourage all interested Members to continue engaging with the process of reforming limited partnership structures. Given the work that the Department is leading, and the Government’s clear plan to continue reforming limited partnerships, I respectfully ask that hon. Members do not move their respective amendments in this area and that they work hard with us to ensure that we can produce an outcome with which they are fully satisfied.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The Minister mentioned increasing the regulation of SLPs, but a regulation from last year meant that SLPs had to register their beneficial ownership within 28 days or face a £500 daily fine. Only 43% of them have provided that information, meaning that £2.2 billion in backdated fines has accrued. When does the Minister intend to collect that money and enforce the regulations that already exist for SLPs?

[Sir Alan Duncan]

It sounds as though the hon. Gentleman is going to make a robust submission to the consultation, and I urge him to do so, because I fully take the point that if something can be required but it does not work operationally, then obviously it will not be delivered. I urge him to record what he believes are the facts and submit them to the consultation.

I express my gratitude to Members who have tirelessly continued to raise their concerns on the issue of SLPs—I can spot one from where I am standing—and I hope that what I have said today, and the content of the consultation published yesterday, provides reassurance that the Government are genuinely committed to reform in this area.

Turning to beneficial ownership in the overseas territories, as the House will now appreciate, the Government’s plan for tackling the issue had been to table a new clause, which we did, that sought unity in the House, which I believe we had a good chance of securing. The new clause sought to enhance the measures on beneficial ownership in the overseas territories but stopped short of legislating for them, thus avoiding constitutional conflict. As Members will be aware, however, some amendments were not selected today, and we of course fully respect the procedural basis on which Mr Speaker chose not to select them.

New clause 6, tabled by my right hon. Friend the Member for Sutton Coldfield and the right hon. Member for Barking (Dame Margaret Hodge), would put a duty on the Government to work with the overseas territories to set up public registers of company beneficial ownership by 31 December 2020. If they do not do so, the new clause would require the Secretary of State to prepare a draft Order in Council, aiming to legislate directly. Opposition new clause 14 would require the Secretary of State to provide all reasonable assistance to the Governments of the Crown dependencies to enable them to establish a public register of company beneficial ownership, and if, by the implementation of the European Union’s fifth anti-money laundering directive, they have not, the new clause would require the Secretary of State to take all reasonable steps to ensure that the Privy Council legislates to require each Crown dependency to do so.

The UK has strongly supported co-ordinated international action to promote beneficial ownership transparency. The UK was the first G20 country to establish a public register of company beneficial ownership and has committed to creating a new beneficial ownership register for overseas companies. At EU level, the UK went beyond the requirements of the fourth anti-money laundering directive in establishing a public register and supported the inclusion in the fifth anti-money laundering directive of a provision that will require all EU member states to have legislation in place to support publicly accessible registers by the end of 2019.

We are also committed to seeing the overseas territories and Crown dependencies take further action, and they have already made significant progress through consensual joint action. We are grateful, and we respect all the work they have done in this area. All Crown dependencies have central registers in place. Of the seven overseas territories with significant financial centres, four already have central registers or similarly effective arrangements. They are able to provide UK law enforcement authorities, on request, with access to such information, even at very short notice—it can be within 24 hours, or even within one hour in urgent cases.

[Ms Angela Eagle (Wallasey) (Lab)]

Will the Minister give way?

[Sir Alan Duncan]

I will give way only briefly.

[Ms Eagle]

I thank the right hon. Gentleman for his generosity in giving way. Does he agree that, although this is progress, it will be effective only if we have the light of transparency and these registers are available publicly, and not just to law enforcement authorities?

[Sir Alan Duncan]

I can answer with an unequivocal yes. That is a shared objective on both sides of the House. The only thing on which we have different opinions is the manner in which we get there. The objective is clear. The arguments are very finely balanced, and the hon. Lady may want to listen carefully to what I am about to say. We recognise the need to tackle illicit finances across the globe, including in the Crown dependencies and overseas territories. We are concerned, however, that the economic impact of imposing public registers on the overseas territories will be significant.

Furthermore, the overseas territories are separate jurisdictions, with their own democratically elected Governments. They are responsible for their own fiscal matters, and they are not represented in this Parliament. Legislating for them without their consent effectively disenfranchises their elected representatives. We would have preferred to work consensually with the overseas territories to make those registers publicly available, as we have done in agreeing the exchange of notes process.

[Sandy Martin (Ipswich) (Lab)]

Will the Minister give way?

[Sir Alan Duncan]

No, not for the moment.

We do not want to legislate directly for the overseas territories, nor do we want to risk damaging our long-standing constitutional arrangements, which respect their autonomy. However, we have listened to the strength of feeling in the House on this issue and accept that it is, without a doubt, the majority view of this House that the overseas territories should have public registers ahead of their becoming the international standard, as set by the Financial Action Task Force.

We will accordingly respect the will of the House and not vote against new clause 6. Unless my right hon. Friend the Member for Sutton Coldfield chooses not to press the new clause, we accept that it will become part of the Bill. In the same spirit, I would appreciate it if the hon. Member for Bishop Auckland chose not to press new clause 14, which would add the Crown dependencies to that stipulation.

Her Majesty’s Government are acutely conscious of the sensitivities in the overseas territories and of the response that new clause 6 may provoke. I therefore give the overseas territories the fullest possible assurance that we will work very closely with them in shaping and implementing the Order in Council that the Bill may require. To that end, we will offer the fullest possible legal and logistical support that they might ask of us. Alongside that, we retain our fullest respect for the overseas territories and their constitutional rights, and we will work with them to protect their interests.

[Helen Goodman (Bishop Auckland) (Lab)]

I am pleased to have the opportunity to take part in the debates on Report of this important Bill. I will follow the same order as the Minister in discussing the amendments.

I took the rather unusual step of signing the Government’s Magnitsky amendments, new clause 3 and amendments 10 to 13, so this House can present a united voice to the whole world in expressing our abhorrence for gross human rights abuses and our determination to tackle them together.

I thank the right hon. Member for Newbury (Richard Benyon) and my hon. Friends the Members for Rhondda (Chris Bryant) and for Dudley North (Ian Austin)—the latter is not in the Chamber at the moment—all of whom have campaigned on this issue for a long time. Her Majesty’s Opposition believe that human rights should be at the centre of foreign policy. The only way gross human rights abuses will stop is if those who perpetrate them, order them and facilitate them are brought personally to account. They must pay the price.

Sanctions against individuals for gross human rights abuses were originally conceived as a response to the terrible treatment of Sergei Magnitsky, but we believe there is a wider problem. We note, for example, that the United States has sanctioned Maung Maung Soe, one of the generals responsible for the ethnic cleansing of the Rohingya in Myanmar.

Last year, the Criminal Finances Act 2017 enabled the Government to freeze the assets of people responsible for such crimes, and this Bill will enable us to ban visas and prevent such people traveling here. The only question is why it took so long for the Government to come round to seeing the importance of this measure.

We introduced so-called Magnitsky amendments in Committee that would have given us the same ability as Canada and the United States to implement targeted sanctions. Unfortunately, the Government initially did all they could to reject our amendments. They rejected them in principle on Second Reading; they reordered the consideration of the Bill; they suspended the Committee; and then they downright voted against the amendments. After the Salisbury incident on 4 March, the Prime Minister announced a complete U-turn. We are pleased the Government have seen the light, but it is unfortunate that it took such a tragic event for them to change their mind.

I am pleased to offer the support of Her Majesty’s Opposition to new clause 6, tabled by my right hon. Friend the Member for Barking (Dame Margaret Hodge). I congratulate her on her long campaign, which began when she was Chairman of the Public Accounts Committee. She has stuck with it over many years, and we see in the Minister’s announcement today that the campaign was well worth while. I also congratulate the right hon. Member for Sutton Coldfield (Mr Mitchell) on putting together a fantastic coalition of support for this change.

We believe the time to act has come. In 2014, David Cameron wrote to the British overseas territories recommending that they introduce public registers—the UK introduced a public register in 2016—and new clause 6 sets out a timetable for them to do so by 2020. Money laundering through London is estimated by the National Crime Agency to total £90 billion, and it is facilitated by the secret ownership of companies allowed in tax havens. Unfortunately, the British overseas territories and Crown dependencies are major actors. They enable the corrupt to live in comfort on their ill-gotten gains and facilitate tax avoidance and evasion on a spectacular scale. The UK is estimated to lose £18.5 billion each year. I am only surprised that the Chancellor of the Exchequer did not also sign new clause 6.

The poorest countries in the world are estimated by the United Nations to lose £100 billion a year through these tax havens, which dwarfs any aid flows we supply. That is another reason why new clause 6 is very much to be welcomed.

The scope for hiding large funds facilitates serious international crimes: drug dealing, people trafficking, sanctions busting, illegal arms sales and terrorism. Over and again, the names of the British overseas territories and Crown dependencies come up when these crimes are finally uncovered.

--- Later in debate ---

[Sir Alan Duncan]

I beg to move, That the Bill be now read the Third time.

It is a great pleasure to support the concluding stage of this Bill, which has been a long time in the making. Many might say it goes back many, many decades, because in this House we can all be proud that the United Kingdom is a country that fulfils its international obligations.

Ever since countries went to war with each other, we have been part of the institutions that try to create peace and try to introduce international order under a proper rules-based system. Inevitably, as the decades pass, the world changes and new measures are needed to tackle the problems the world faces.

We are founder members of the United Nations, and we sit on the Security Council, on which we fulfil our obligations dutifully. We have been a member of the European Union for 40 years, and our membership is now drawing peacefully to a close. That means we need to restructure the manner in which we fulfil our international duties, and to that end we need to pass legislation in this House that empowers us to do the many things we want to do.

[Mr Nigel Evans (Ribble Valley) (Con)]

Some people who want to diminish the vote of the British people to leave the European Union tend to say that standards will drop simply by our leaving the European Union. Does not the passage of this Bill prove how wrong people can be?

[Sir Alan Duncan]

I am grateful to my hon. Friend for raising that serious underlying benefit of the Bill.

At the moment, we implement various sanctions. Some we implement because, as members of the United Nations, we have to do so, and others we implement because, as members of the European Union, we do so collectively with the other 27 members. The power that currently allows us to implement sanctions derives from our membership of the European Union; it is not an autonomous legal power that we have sovereign to ourselves. This Bill is therefore needed to give to us, when we leave the European Union, the autonomous powers to have a proper, effective sanctions regime.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

This will allow us to work on sanctions, in accordance with our allies and with the wishes of the United Nations. The Minister will recall that one argument put in the debate on the referendum was that if we left the European Union, we would be without allies, friends and influence. Does the response to the appalling crime that took place in Salisbury, when 26 countries expelled more than 130 Russian diplomats between them, not show that when it came to it, Britain had friends, allies and influence, and that those allies stood with us when it really mattered?

[Sir Alan Duncan]

I am grateful to my right hon. Friend because he is absolutely right to say that in this dangerous and unstable world it is very important that there are moments when we act collectively. We do so through many forums: we are a member of the P5—a permanent member of the UN Security Council; we are a member of the G7, G20 and NATO; and, crucially, we are the only major western power to spend 0.7% of our national income on international development. We are therefore in a good position to retain our influence in the world, and we will do so partly by the powers we are taking under this Bill. It will allow us to continue to implement UN sanctions and to implement our own sanctions, no doubt often in concert with the remaining 27 members of the EU.

[John Howell (Henley) (Con)]

Does the Minister acknowledge, as I do, how important this Bill is in the context of dealing with terrorist money? Only last week, in the Council of Europe, we had a debate about trying to prevent the flow of funds that kept terrorist organisations, and Daesh in particular, afloat. This Bill will play a major role in helping towards that.

[Sir Alan Duncan]

As I have said, this Bill will not only ensure that we have the power to comply with our obligations under the UN charter but allow us to support our wider foreign policy and national security goals after we leave the EU. The powers and purposes in the Bill give us wide scope for applying sanctions wherever we think those powers need to be used in order to assist our foreign policy goals, and indeed for the wider decency and morality of the world of which we are a part. The Bill will enable us to keep up to date with anti-money laundering and counter-terrorist financing measures. It is an important piece of legislation, ensuring maximum continuity and certainty for individuals, businesses and international partners.

This Bill was one of the first pieces of legislation relating to the UK leaving the EU to come before Parliament. There were many uncertainties over how it would be received, but I feel it left the other place in good shape, mostly due to the brilliant stewardship of my ministerial colleague Lord Ahmad of Wimbledon. I am sure that, like me, this House would like to thank him for the way he steered this through the House of Lords, the Chamber in which it started.

I am grateful that Members of this House have similarly recognised the importance of this piece of legislation, and of the requirement to have the legal powers in place to impose, update and lift sanctions regulations, and change our anti-money laundering framework, once we leave the EU.

[Luke Graham]

Earlier this afternoon, this House accepted new clause 6, which puts new obligations on our overseas territories. Will my right hon. Friend assure the House and the overseas territories that we are not going to legislate and forget? Will he confirm that Members and the Government need to support our overseas territories to help them comply with the legislation we have passed this afternoon?

[Sir Alan Duncan]

I am very happy to say that very fulsomely, because during our debate on the decision to adopt new clause 6 I was at pains to say that we are not going to desert the overseas territories, or indeed the Crown dependencies. We are fully supportive of them. We are going to work very much with them and, I hope, with the grain of their own efforts. We are not, in any way, going to sell them down the river. May I say very publicly here, and to those in the overseas territories who may be able to see and take note of this, that we are and we remain full supporters of the overseas territories, that we will fulfil our obligations to them without reservation and that we are not going to dilute our efforts in doing so?

[Victoria Prentis (Banbury) (Con)]

The Minister is famed for his considerable charm and experience in overseas negotiations. Will he give the House some detail about how he is going to help the overseas territories to work with the new obligations?

[Sir Alan Duncan]

I will indeed.

We have had spirited discussions on many aspects of the Bill, both on the Floor of the House and in the Public Bill Committee. I thank in particular the Bill team, who have given up pretty much a year of their lives to work on every dot, comma and detail of the legislation. They have been dutiful, punctilious and hard-working. They have been burning the midnight oil and have put up with my occasional tetchiness—

[John Glen]

Really?

[Sir Alan Duncan]

Yes, really.

[Helen Goodman]

Surely not!

[Sir Alan Duncan]

I salute them for all their efforts.

On what my hon. Friend the Member for Banbury (Victoria Prentis) said about the overseas territories, I am grateful that, in response to the point of order made by my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), Mr Speaker made it absolutely clear that procedurally the Government’s proposed amendments were in order. The compromise amendment was tabled rather late in the day, but it was not out of order for being late. We fully recognise that the Speaker has the discretion to select or not to select an amendment for debate. We were obviously disappointed that the compromise amendment was not selected, but we respect Mr Speaker’s decision.

[Jo Swinson]

Will the Minister give way?

[Sir Alan Duncan]

I am very short of time. Does the shadow Minister wish to speak?

[Helen Goodman]

indicated assent.

[Sir Alan Duncan]

She does; I shall therefore not take an intervention so that I can leave a couple of minutes for her.

I thank my right hon. and hon. Friends on the Government Benches who would have supported the compromise amendment. I apologise if I marched them up to the top of the hill only for them to find that the hill had disappeared. I put on record my thanks to all who have helped with the Bill and, indeed, my thanks to the Opposition Front-Bench team for their co-operation on Magnitsky. Out of courtesy and shortness of time, with apologies for leaving her so little of it, I leave the last couple of minutes to the shadow Minister.