Sanctions and Anti-Money Laundering Bill [Lords]

Anneliese Dodds Excerpts

2nd reading: House of Commons
Tuesday 20th February 2018 Commons Chamber

[Dame Margaret Hodge]

I entirely agree. Indeed, if we leave the EU without having implemented reforms that would have an impact on the overseas territories, the EU will blacklist them.

I know that there are many principled Conservative Members—including the right hon. Member for Sutton Coldfield (Mr Mitchell)—who care passionately about transparency, and have championed the cause from both the Back Benches and the Front Bench for many years. I urge them all to make clear to their Front-Bench colleagues that they will support a cross-party amendment setting a clear and reasonable timeframe within which the overseas territories would be required to prepare and launch public registers of beneficial ownership. I hope that the Government will listen to the advice of leading Back Benchers on their own side. Those of us who are involved in campaigning for transparency are not seeking short-term political advantage. What we want is an important, sustainable change that will have a lasting impact on the process of stamping out financial skulduggery, and a considerable impact not just on the United Kingdom’s public finances but on those of the poorest nations in the world.

We can never build a global Britain on dirty money. We will not create a strong economy on the back of being the jurisdiction of choice for every kleptocrat and crook in the world. Our British overseas territories will not prosper over time on the basis of being safe havens for illicit wealth. Transparency is an essential tool in the battle against all financial crimes. Exchanging information behind closed doors, which the Government claim is sufficient, particularly disadvantages the very same countries that suffer the most from financial crime and money laundering, because they have the weakest regulatory agencies in operation.

Relying on regulatory bodies is also very much second best. Even our under-resourced bodies such as Companies House are at best reactive in their work on uncovering financial crimes; there is very little evidence that they are undertaking proactive investigations. Indeed, the constant flow of scandals is strong evidence that the system based on the private automatic exchange of information is not working.

Let us consider the case highlighted recently by Global Witness of the $75 million paid by Glencore to Dan Gertler, a controversial businessman accused of bribing senior officials in the Democratic Republic of the Congo to advance mining interests. The money was originally due to be paid to Congo’s state mining company, but following a secret agreement was paid into one of Dan Gertler’s companies registered in the Cayman Islands. Or let us consider the case revealed in the Paradise papers of Jean-Claude Bastos, who managed Angola’s sovereign wealth fund and was paid more than $41 million from the fund via a secretive British Virgin Islands company. The BVI company was itself owned by a series of secretive offshore companies, but the ultimate beneficial owner was Mr Bastos.

Today’s Guardian contains disturbing revelations that North Korea broke international sanctions aimed at inhibiting the development of weapons by using a network of companies based in our tax havens to acquire millions of dollars-worth of fertiliser, coal and other commodities—our tax havens, undermining our national security and that of other western nations. Secrecy enables wrongdoing.

Ironically, the British Government have accepted that argument, because we are ourselves publishing our national register of beneficial ownership. The standard that we accept for ourselves should be the standard we expect for our overseas territories. To pretend, as the Government do, that the overseas territories are making good progress is nonsense. It was 2013 when David Cameron first demanded public registers; nearly five years later, we are still waiting for a number of the jurisdictions, including Anguilla and the Turks and Caicos Islands, to set up a central register.

Let me take this opportunity to debunk some of the myths that were prayed in aid when this matter was debated in the House of Lords. Raising the spectre of identity theft and personal security risks is wide of the mark. Public registers can have tightly defined case-by-case exemption policies to protect individuals who are genuinely at risk. Ministers claim that no other countries are adopting public registers. Again, that is not true: the EU is currently implementing the fifth anti-money laundering directive requiring all EU members to implement public registers by 2019, including Gibraltar, and we should be implementing that.

Arguing, as Ministers do, that we should not act until others have acted is a wretched excuse. We have been bold in leading the movement to stamp out corruption; we should pursue that course and be proud of it. As the number of tax havens decreases and the noose tightens around the remaining tax havens, our action will make action elsewhere in the world inevitable.

I welcome today’s statement from the Secretary of State for Exiting the European Union that the UK wants to lead a global race to the top in rights and standards. There is no better way of leading that race to the top than by insisting that our overseas territories adopt public registers of beneficial ownership.

Public registers will not undermine legitimate businesses or individuals who want to continue to take advantage of low-tax regimes. They will expose those who seek to hide their money because they have received it corruptly, or who unlawfully evade tax, all too often at the expense of poor people and poor countries.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

On public registers, is it not also the case that firms that are more transparent are often more successful than those that are not? We see that in the examples of Santander, SSE and many others.

[Dame Margaret Hodge]

My hon. Friend on the Front Bench is completely right.

Finally, while we were all horrified by the destruction wrought by the hurricanes last year, those disasters should never, ever be used as an excuse for allowing kleptocrats, villains and tax evaders to prosper. In a White Paper on the overseas territories published in 2012, the Government stated:

“As a matter of constitutional law the UK Parliament has unlimited power to legislate for the Territories.”

I am urging tonight that the Government use their powers to insist that our tax havens—our overseas territories—put in place public registers in a defined timescale. That is a reasonable demand. Stopping it would create a grim stain on Britain’s reputation as we move to establish credibility in a post-Brexit world.

--- Later in debate ---

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

It is a real pleasure to respond to the debate on behalf of the Opposition. The Bill, as many colleagues have indicated, purportedly aims to provide the UK with an appropriate system to stop the corrupt and the criminal from benefiting from our British financial system. I will first consider the sanctions-related matters before looking at the money laundering matters, although they are of course intrinsically linked.

As with much of the Government’s Brexit-related legislation, many concerns have been expressed about the lack of parliamentary oversight of the Bill’s provisions. As my hon. Friend the Member for Bishop Auckland (Helen Goodman) set out, many positive changes were made when the Bill was discussed in the other place, and they must not now be rolled back in this place. Other matters of concern persist, as indicated by the hon. Members for Glasgow Central (Alison Thewliss) and for East Dunbartonshire (Jo Swinson), and echoed in the calls for clarity from the hon. Member for Huntingdon (Mr Djanogly).

We still lack clarity over the extent to which our sanctions regime will be aligned with that of the EU 27. The evidence is clear that sanctions are more effective when imposed collectively—the hon. Members for Glasgow Central and for Huntingdon made that point very well. I was disappointed by the Foreign Secretary’s comments in this regard, which I thought were contradictory; he simultaneously admitted that unilateralism might not be effective while vaunting the possibilities of a totally independent regime. There are no indications in the Bill of how we will concretely ensure the continued co-ordination that is so necessary in this area.

We heard in the debate some persuasive arguments about the need for stronger commitments in the Bill, not just fleeting mentions, on the necessity for sanctions to target those responsible for human rights violations, particularly those responsible for gross human rights violations, as in the so-called Magnitsky regimes. The right hon. Member for Sutton Coldfield (Mr Mitchell) spelled out clearly the reasons for such an explicit approach. I hope that Government Members will have listened to those arguments.

Finally in relation to the sanctions-related provisions, the hon. Members for Glasgow Central and for East Dunbartonshire mentioned the need to ensure that measures are appropriately calibrated so that they target criminal individuals and terrorists, not legitimate aid agencies and financial service providers delivering legitimate services. It is essential that we have accurate and appropriately granular mechanisms in that regard.

Let me move on to money laundering. I was very pleased, as I am sure were many Members, about the informative and courteous style of debate that we have had on money laundering tonight. I am afraid that is in contrast to the comments on money laundering from the Government when introducing the Bill, which I thought were disturbingly brief. It is clear that the problem of money laundering is getting worse, not better. I will not go into all the arguments and evidence on that now, because that has been done very ably by other Opposition Members, not least my hon. Friend the Member for Ealing Central and Acton (Dr Huq). At the centre of the UK’s problems with money laundering lies a lack of transparency and accountability, both of which are essential if we are to ensure that the criminal and the corrupt do not profit from our leaky financial system.

On the issue of public registers of beneficial ownership in our associated territories, may I say what a powerful tour de force we have had from the right hon. Members for Arundel and South Downs (Nick Herbert) and for Sutton Coldfield? I am sure that the right hon. Member for Arundel and South Downs, as a former Home Office Minister, has a huge insight into the damage being done by the lack of transparency in this area, aiding international criminals. The Government must listen to the uncomfortable truth that he has set out so ably tonight.

My right hon. Friend the Member for Barking (Dame Margaret Hodge) set out how long this process has been running, as the Government requested beneficial ownership registers from the overseas territories five years ago. Many Members have indicated that we have had a slippage from the Government’s initial commitments in this regard. The failure to clean up their act by some of our overseas territories is having a severe impact on their reputation. As someone who has had many meetings with representatives of those jurisdictions, and who supports them tremendously, let me say that it is not their foes but their friends who are arguing for more transparency, because we see the reputational damage that the lack of transparency is doing to them. As my right hon. Friend the Member for Barking said, the Government’s failure to act constitutes complicity. I agree with the hon. Member for Amber Valley (Nigel Mills) that the UK must exercise leadership.

There has also been a lack of clarity from the Government over whether they are minded to follow EU-level developments, particularly the anti-money laundering directive known as AMLD 5. I agree with the hon. Member for Chelmsford (Vicky Ford) about many things—we worked together previously in the European Parliament—but I am afraid I cannot agree with her assessment that we know for certain that the Government will continue to cohere with EU-level developments. The hon. Member for East Dunbartonshire (Jo Swinson) and my hon. Friend the Member for Enfield, Southgate (Bambos Charalambous) explained very clearly why we do not have the clarity that we need.

I think it especially important to focus on the regulation of trusts. Under David Cameron, the Government argued against their inclusion in EU registers of beneficial ownership. The Foreign Secretary claimed that the UK was ahead of the rest of the EU with our register of beneficial ownership, but we have been a drag on the EU when it comes to more transparency on trusts.

[Boris Johnson]

A drag?

[Anneliese Dodds]

At EU level, we have been. David Cameron argued against the inclusion of trusts in EU beneficial ownership registers, but we now have a chance to change. I can see that the Foreign Secretary is appalled by the idea that we might have acted as a drag in that regard, but I am sure that he will be converted to the cause of more transparency.

As the hon. Member for East Dunbartonshire rightly mentioned, it is deeply concerning that the timetable for the foreign-owned property register has slipped so substantially. I take on board what was said by the hon. Member for Amber Valley—we already have a register of sorts, in the guise of Private Eye’s tax haven property map—but that map was created, essentially, by mistake. It was created when the Land Registry released data, by mistake, which was then matched up with Companies House data. The Government should be delivering the register themselves. I appreciate that there should be additional disincentives, but that is not a reason not to act now.

Finally, let me say something about the issue of due diligence in relation to British company ownership. Yes, we do have a public register run by Companies House, but the responses to a series of parliamentary questions that I have tabled have shown that there is little or no oversight of the veracity of the data supplied to it. That is illustrated by the worrying case mentioned by my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle), to whom I pay tribute for all his effort to help his constituent. There are not enough resources in Companies House, and there is a regulatory gap in respect of those registering companies with it directly. There are even problems for those who register through company formation providers, many of which have been shown not to be fulfilling their responsibilities. In that context, it may be necessary to launch a pincer movement requiring all such firms to have UK bank accounts: at least they would then be covered by anti-money laundering legislation through the bank account system.

The Financial Action Task Force is due to report next month on the UK’s approach to money laundering and ensuring the integrity of the international financial system. I am sure Members in all parts of the House agree that it would be a huge international embarrassment if the taskforce concluded that the UK Government had chosen not to adopt measures that would help to clean up our financial system. I am afraid I agree with my right hon. Friend the Member for Barking that there are grim stains on the UK’s reputation in this regard.

Let me issue one last plea. I have been very disturbed by the Government’s decision not to defend publicly the journalists who were singled out by Appleby. It picked on British companies, the BBC and The Guardian, which were taken to court after releasing details that were in the public interest. Sadly, the Treasury team—I see that some of its members are present—has not yet been willing to condemn that behaviour. I appeal to Ministers, including those in charge of foreign policy, to do so now, and to confirm that those disclosures were in the public interest.

Counter-Daesh Update

Anneliese Dodds Excerpts

Tuesday 7th November 2017 Commons Chamber

[Boris Johnson]

Of course I am sorry if any words of mine have been so taken out of context and so misconstrued as to cause any kind of anxiety for the family of Nazanin Zaghari-Ratcliffe—of course I am. But the most important thing is that I do not believe—and I have this from the Iranians themselves—that those words had any impact on the judicial process. We are going to work flat out to secure the release of Nazanin Zaghari-Ratcliffe. I am very happy to have been able to make that clarification to the House today, and I am delighted that, as I say, Richard Ratcliffe welcomes the clarification that I have made. If the hon. Lady would pass on my thoughts to her constituents who are the family of Nazanin Zaghari-Ratcliffe, I would be very grateful.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

It is precisely because many of us have, for many months, been working to try to secure Nazanin’s release that we are so upset about the mistake that has been made. I accept that, perhaps inadvertently, we are aware of the impact of her detention on her and her family, and that that is occasioning the extent of our dismay. This is not an attempt at politicisation; it is genuine upset.

I hope that the Foreign Secretary will now go to look at the website of the Iranian judicial authorities, where his remarks are repeated for all to see. I think it is difficult, therefore, for him to absolve himself of responsibility. We know, and I hope that the Foreign Secretary is aware, that the Iranian authorities do not deal with ambiguity. They need clarity—clear words. Anyone who has engaged with them, as I and many others have done over many months to try to secure Nazanin’s release—we have been critical of them—will be aware of their approach and know that they need clarity. We need six words from the Foreign Secretary: “I’m sorry; I made a mistake.” Please give us those six words now.

[Boris Johnson]

I say respectfully to the hon. Lady that I think the mistake, the error and the fault lie with the Iranian authorities. It is to them that she should direct her anger.

British Prisoners in Iran

Anneliese Dodds Excerpts

Tuesday 18th July 2017 Westminster Hall

[The Minister for the Middle East (Alistair Burt)]

As always, it is a pleasure to serve under your chairmanship, Mr Hollobone. May I begin by congratulating the hon. Member for Hampstead and Kilburn (Tulip Siddiq) on securing this debate? I thank all Members who have spoken—principally my hon. Friends the Members for Henley (John Howell), for North East Hampshire (Mr Jayawardena) and for Hertsmere (Oliver Dowden) and the hon. Member for Leeds North West (Alex Sobel). I also thank the Front-Bench spokespeople, particularly the hon. Member for Leeds North East (Fabian Hamilton), for an appreciation of some of the politics behind this.

I certainly recognise the intense interest in this issue, not only across the parties in this House but among the public in the United Kingdom and beyond. Of course I recognise the deep concern felt about all the cases mentioned today and the huge frustration at the lack of progress. I will try to offer as much clarity as I can and set out what the Government are doing to assist the detainees and their families. I will also explain the limitations on what we can do.

Like everyone else, I wish to see all those mentioned today returned to their families and to the UK. My responsibility and our responsibility is to work in the most effective way we can, in all the circumstances, to achieve that, and to explain what we do and why. I know everyone here would welcome me doing more. I am not sure how much people would welcome me doing something that made life more difficult. That is the dilemma in which we find ourselves.

Let me say what I am trying to do. This issue has been a priority for me since my appointment last month. I spoke to the deputy Foreign Minister of Iran about our prisoners on 21 June and raised the subject again when I met the Iranian ambassador on 6 July. Two days before that, I met relatives of Mrs Zaghari-Ratcliffe, and earlier this afternoon I met the family of Mr Foroughi. At both those meetings I assured the families that I would do everything I could for their loved ones. The families also have round-the-clock access to support and assistance from our dedicated Foreign Office officials. I know how much the officials put into this, and I think the families involved know that as well. There is no intention to keep anyone in the dark about anything. There is a limit to how much information we have, but everything that we can communicate is communicated directly to the families. They have 24-hour access to consular officials, and they and all colleagues here have constant access to me.

[Annaliese Dodds (Oxford East) (Lab/Co-op)]

Will the Minister give way?

[Alistair Burt]

No, because I want to leave time for the hon. Member for Hampstead and Kilburn to speak at the end. I cannot possibly answer all the questions raised. All colleagues who have a question on the table will get an answer by letter, but I want to address as much as possible of what the hon. Member for Hampstead and Kilburn said.

I want to assure all colleagues that we are doing everything we can for our detainees. Our strategy is based on decades of experience—both our own experience and that of international partners—of dealing with Iran. We judge that approach to be in the best interests of those detained, but we keep it under constant review. If our assessment of the right way to handle this is to change, we would consider any alternative courses of action, but for now we judge the approach we are taking to be the most constructive one.

Our ambassador raises the issue of our detainees with the Iranian authorities at every opportunity; he seeks to secure consular access and to ensure their welfare. The Prime Minister and the Foreign Secretary have raised all our consular cases with their counterparts and have stressed the importance of resolving them as quickly as possible. My predecessor, the right hon. Member for Bournemouth East (Mr Ellwood), discussed the issue with the Iranians on numerous occasions, both in London and Tehran. However, we must recognise that there are limitations on what we can do.

I turn now to some of the questions raised by the hon. Member for Hampstead and Kilburn, starting with dual nationality. Nationality is a key factor. All the British nationals currently detained in Iran also hold Iranian nationality. Questions of nationality are for individual states to decide. Unlike the UK, Iran does not legally recognise dual nationality. It considers our detainees to be Iranian, which has implications for consular assistance, which are set out in the passports of those with dual nationality. Under international law, states are not obliged to grant consular access to dual nationals, which is why our passports state that the British Government are unable to assist dual nationals in the country of their other nationality.

Our travel advice for Iran reiterates that statement and highlights the additional potential risks for British-Iranian dual nationals travelling there. None the less, we try to help dual nationals in exceptional circumstances. In practice, that is often difficult, as we are finding in Iran. We have repeatedly asked the Iranian authorities to grant us consular access to our dual-national detainees. However, as Iran considers them to be Iranian, it does not recognise our right of access. We know that other countries face similar difficulties, but we will continue to press for consular access.

Let me turn to some other issues. On publicly calling for the release of the detainees, we are doing everything we can for them, including trying to secure access to them and to ensure their welfare. However, we do that in the way that we judge is in their best interests, and we assess that the approach we are currently taking is the most likely to be in the best interests of all our prisoners in Iran.

As has been stated, there are new opportunities with Iran’s opening up. Following the destruction of our own embassy there some years ago, a new embassy has opened and new relationships are opening up. It is a complex country with a complex power structure, as the hon. Member for Leeds North East made clear, but I am hoping to take the opportunity—and I am sure the Government are hoping to take it—to explore what this new chance of a relationship with Iran means, both for us and for them. That will take some time, but it provides the opportunity for contacts to be made in a different way from before. That will supplement the efforts already being made on a regular basis to raise the issue by our consular team and by Ministers at the highest level.

Raising the issue can mean a variety of different things, from just mentioning it at a particular time to, following the development of a relationship, an opportunity to go into the issue further. Some of the issues that we consider here are blindingly obvious, such as how a country is seen by others around the world. We understand that very well. Different aspects of the Iranian Government understand some of that, but not others. We want to make sure that they see an issue like this as we see it, so that they can take the steps that we need to see our nationals returned.

Human rights in Iran generally are another key part of the debate, but what do we do about them? The Government take human rights and the rule of law seriously, and the human rights situation in Iran remains dire. I am putting that on the record, so that we in this Chamber, and the Iranian Government and the Iranian ambassador, who will read the account of the debate, will see it and know exactly what we mean. The human rights situation in Iran remains dire, and we are determined to continue to hold the Iranian Government to account. We frequently release statements condemning the human rights situation in Iran and regularly take action with the international community.

For example, we designated more than 80 Iranians responsible for human rights violations under EU sanctions, helped to establish the UN special rapporteur on human rights in Iran and strongly support the human rights resolutions regarding Iran at the UN. We believe that continued engagement with Iran on economic development and openness are the best ways to develop our relationship and will give us better leverage to discuss other issues. We do not pursue trade to the exclusion of human rights and the rule of law; they can be, and are, complementary.

We considered very carefully the invitation to visit Evin prison earlier this month. The decision to participate in the tour was taken because we felt it would provide an opportunity to engage directly with prison authorities regarding the dual-national detainees. We felt that taking this opportunity should be taken, in the best interests of all our detainees and their families. Our consul repeatedly asked to see the British-Iranian detainees but was denied access. The risk of not accepting the invitation was the Iranian authorities saying, “We gave you an opportunity to see the conditions. You didn’t take it. What do you expect?” There are occasions when we are trapped if we do and trapped if we don’t.

Everyone in the FCO who deals with this—the consular team, which has been in constant contact with the families—knows how hard people are being pressed, but the truth is that this is not a matter in the hands of the UK Government to resolve. If it is to be resolved, it has to be resolved by the Iranian regime, and we have to play a part in making sure that we have done everything we can to facilitate that and make it work. There are different approaches to that. There is a public approach, which people can see; it is right that this issue is brought up here and in the most direct way by the hon. Member for Hampstead and Kilburn and all hon. Members who represent those who have been detained, and it is right that this is carried worldwide. However, different groups have different responsibilities, and my responsibility is to do what the Foreign Secretary and I consider to be most effective to secure the return of the detainees to their families. As we can see, that means our having a different approach from that which people might like to see.

All I can say is that, so long as I have the conviction that everything we are doing is as appropriate as it can be and is best designed to get the result we all seek, I will continue to do it. If the Government need to change course, we will, but I will not put an artificial barrier in the way of our progress by doing something that I might subsequently regret. I assure colleagues that we are doing everything we can to seek the result that we all want, but we are doing it in the way that we consider—with our experience of Iran and the experience of those who have worked with Iran for a long time—to be the best way possible. That does not in any way deny the efforts of others to do things in their way and to make sure that the Iranian authorities know how we feel, how the public feel and how the world feels.

We must do the work that we can to ensure the best interests of those who have been detained. That is why we are doing what we are doing, and I pledge to colleagues that I will continue to do what I consider to be in the best interests of those detainees, but I will constantly listen to those with other ideas and to the families, so that we do as much for them as we possibly can.