Criminal Finances Bill

Baroness Vere of Norbiton Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 28th March 2017 Lords Chamber

Moved by

[Baroness Vere of Norbiton]

80: Clause 13, page 43, line 42, at end insert—
“(h) betting receipts,”.”

[Baroness Vere of Norbiton (Con)]

My Lords, we now come to two proposed changes that the Government are seeking to make to the seizure and forfeiture powers set out in Chapter 3 of Part 1 of the Bill. In the House of Commons we introduced amendments to allow law enforcement agencies to seize casino chips and gaming vouchers where they had the suspicion that they were either the proceeds of crime or would be used to commit further offences. The Government were also asked to consider whether similar provisions could be introduced to allow the seizure of betting slips. Government Amendments 80, 82, 83 and 138 to 140 make such provision. If law enforcement agencies suspect that the funds used to place a bet are the proceeds of crime, they will be able to seize the betting slip. These provisions will be subject to the same safeguards as for cash seizure and we will be working with bookmakers and their trade associations to ensure that they are used effectively.

At present, Clause 14 allows for the seizure and forfeiture of moveable stores of value but makes no allowance for deductions for legal expenses on the part of the person the item was seized from. Government Amendments 88, 90 to 101 and 142 to 155 will therefore allow for a deduction to meet legal expenses from recovered sums following the forfeiture of the item. Where appropriate, the court will determine whether legal expenses should be paid and will provide for that as part of the forfeiture order. These amendments make similar provisions in Schedule 3 in relation to items seized where there is a suspicion of terrorist financing. I beg to move.

[Lord Kennedy of Southwark]

I am happy to support these amendments, which are both sensible and proportionate. Ensuring that betting slips can be seized is a sensible move, as indeed is the whole series of amendments.

Criminal Finances Bill

Baroness Vere of Norbiton Excerpts

Committee: 1st sitting (Hansard - continued): House of Lords
Tuesday 28th March 2017 Lords Chamber

[Lord Kennedy of Southwark]

The noble Baroness’s amendment is obviously a probing amendment, and I hope that we will get a response from the Government Front Bench that clarifies the situation.

[Baroness Vere of Norbiton (Con)]

My Lords, I am grateful to the noble Baroness, Lady Hamwee, for her scrutiny of these provisions. Her Amendment 107 seeks to require the Secretary of State to define the seniority of SFO staff so that not all have access to POCA powers. I appreciate her concern at the extension of the powers conferred by POCA but I hope I can reassure her by explaining our reasons for extending powers to SFO officers.

As the noble Baroness is undoubtedly aware, the SFO is responsible for investigating some of the most serious cases of fraud, bribery and corruption. To effectively combat complex crime, it is vital that SFO officers have access to the most effective legislative tools. Currently, only SFO officers who have accredited financial investigator status have access to POCA powers. This is at variance with other agencies such as the police, the NCA, HMRC and Immigration Enforcement, whose officers have direct access to these powers whether or not they are financial investigators.

It is logical and appropriate that these powers are made available to all SFO officers, both to ensure consistency of approach across agencies and to ensure that non-accredited SFO officers have access to POCA powers when investigating complex crimes, which may include investigating the proceeds of crime.

I hope I can further reassure the noble Baroness that all agencies adopt a process whereby applications made under POCA are considered and approved by an appropriate management chain before they are submitted to court. This ensures that all officers, of whatever grade or rank—even the janitor—are required to consider the necessity and proportionality of any application they make.

I am grateful to the noble Baroness for allowing me to explain the rationale for this position—particularly the need to make powers available to a wide range of officers involved in the investigation of complex, acquisitive crime. I trust that she will feel inclined not to press this amendment and, accordingly, I invite her to withdraw it.

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Moved by

[Baroness Vere of Norbiton]

110: Clause 24, page 78, line 43, leave out “6 months” and insert “1 month”

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[Baroness Vere of Norbiton (Con)]

My Lords, this set of amendments makes a number of minor changes to the Proceeds of Crime Act 2002 so that the powers in the Bill work as they were intended. As noble Lords will be aware, POCA is a complex piece of legislation and inevitably, as we have consulted further with key partners and parliamentary counsel, additional issues have arisen that require attention. Given their technical nature, I will not detain your Lordships for long, but I will highlight a few key points about these amendments.

They are primarily about ensuring consistency across the Bill. First, we are ensuring that penalties and fines mirror those already in POCA and elsewhere in statute. We will also provide that cash already being detained under terrorist forfeiture powers is not also liable for confiscation; this avoids double counting. These amendments will also extend existing powers for the courts in Scotland and Northern Ireland to order the payment of a criminal’s cash to settle an outstanding confiscation order. The Bill already provides for this in the English magistrates’ courts. We will provide that confiscation orders that have been discharged can be revisited if the criminal is found to have further assets. Finally, we are amending the Civil Jurisdiction and Judgments Act 1982 to allow for civil orders issued in one part of the UK to be recognised and enforced in another. I beg to move.

Amendment 110 agreed.

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Moved by

[Baroness Vere of Norbiton]

158: Clause 40, page 105, line 5, at end insert “or Part 1 of Schedule 5A (terrorist financing investigations in England and Wales and Northern Ireland: disclosure orders)”

[Baroness Vere of Norbiton]

My Lords, today’s final group of amendments also concerns Part 2 of the Bill on the financing of terrorist-related activity.

Government Amendment 158 will extend the existing assault and obstruction offences in respect of counterterrorism financial investigators—CTFIs—to include assault or obstructing CTFIs who are exercising powers in relation to the disclosure order power introduced in Clause 33. This power is comparable to ones in Schedule 5 to the Terrorism Act 2000.

Amendment 160 would insert provision into the Terrorism Act so that court orders made in one part of the UK for the purposes of or in connection with the investigation of terrorist financing can be enforced in another. This power is comparable to powers in Schedule 5 to the Terrorism Act 2000.

Amendment 160 inserts provisions into the Terrorism Act so that court orders made in one part of the UK for the purposes of, or in connection with, the investigation of terrorist financing can be enforced in another. This power is being provided to ensure that the new powers in this Bill—for example, disclosure orders and further information orders—can be enforced more effectively. We are also taking the opportunity to ensure that existing provisions in the Terrorism Act—for example, production orders—can be enforced in the same way. The power to enforce orders across UK borders is already available for equivalent orders made under the Proceeds of Crime Act. I beg to move.

Amendment 158 agreed.

Criminal Finances Bill

Baroness Vere of Norbiton Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Monday 3rd April 2017 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, I support Amendment 162, proposed by the noble Baroness, Lady Hamwee. It would strengthen Clause 44, which is in a part of the Bill concerned with corporate offences of failure to prevent tax evasion. Failure to pay the right levels of tax due as an individual or as a corporate body hurts everyone. Having robust procedures in place to combat these offences is important. Some corporate entities will employ lawyers and accountants to minimise their tax liability, but where that steps over the line into tax evasion we have to be prepared to take swift action.

The clause so far will place a requirement on the Chancellor of the Exchequer to publish and prepare guidance, using the word “must”, which is not something we often see in government Bills—I have always thought parliamentary draftspersons preferred “shall”—but since it uses the word “must”, noble Lords can draw from that that great importance is implied about this guidance on the procedures. The idea is to help relevant bodies. The Bill then moves on and says,

“can put in place to”,

which negates the emphasis in the earlier part of the clause.

The amendment from the noble Baroness would place the right emphasis, saying that relevant bodies “shall have regard to” this important advice prepared by the Treasury and published by the Chancellor. The Government clearly thought it was important that companies should be aware of this advice. I hope they will tell us why they think their wording is sufficient and that that of the noble Baroness is not necessary in this case.

[Baroness Vere of Norbiton (Con)]

My Lords, I am grateful to the noble Baroness, Lady Hamwee, for tabling this amendment, which allows us to discuss the Government’s guidance on the new corporate offences in Part 3 of the Bill. Part 3 creates two new offences for relevant bodies that fail to prevent the criminal facilitation of tax evasion. It also provides a defence for a body to show that it has put in place reasonable prevention procedures designed to prevent such criminal facilitation.

The Government produced guidance on the offences, and the related defence, in 2015 and conducted a full public consultation on it. Much of the guidance focuses on the operation of the defence and helps to inform businesses’ understanding of how to determine what prevention procedures are reasonable in their circumstances. The guidance has been discussed extensively with a wide range of businesses and organisations both within the UK and overseas. Following the consultation, the updated guidance was published last year.

In addition to the government guidance, officials have been working with a number of representative bodies to support them in producing their own sector-specific guidance, which can be endorsed by the Chancellor if it is clearly in keeping with the overarching government guidance. The Chancellor’s endorsement of external guidance will provide a hallmark of quality for individual businesses to identify good practice for their sector.

The government guidance makes it clear that it is just that: guidance. It does not set out a tick-box exercise of mandatory requirements for businesses but rather six principles to help each business decide what prevention procedures, if any, are reasonable for them in their individual circumstances.

The government guidance makes it clear that, for each business, there may be a number of appropriate approaches for them to take and that departure from suggested procedures will not mean that an organisation does not have reasonable prevention procedures. Likewise, different organisations may implement the same or similar procedures differently due to their individual circumstances. For example, what is reasonable for a large, multinational financial institution will be different from what is reasonable for a small, domestic retail business.

Conversely, while departing from the guidance will not mean that a relevant body does not have reasonable prevention procedures, nor does complying with the guidance necessarily guarantee that prevention procedures are reasonable. The guidance is not intended to be a safe harbour.

The new offences also provide a defence for a business where it was reasonable for it to have no procedures in place. A business can therefore avail itself of the defence without having followed the Government’s guidance if it was reasonable for it to have no procedures in place; for example, because the risks it faced were so remote that it would be unduly burdensome for it to put in place prevention procedures.

I hope that noble Lords will therefore agree that it is not necessary, and may impose undue burden, to force businesses to have regard to the government guidance. Those businesses which need to put in place prevention procedures and which seek to be compliant will likely already have regard to the government guidance. This has been demonstrated by the excellent engagement from many sectors on the development of the guidance. Accordingly, I invite the noble Baroness to withdraw her amendment.

[Baroness Hamwee]

My Lords, the noble Lord, Lord Kennedy, understood my thinking exactly, although I wonder whether it would be helpful to this House to use a procedure which is often used in the Commons to explain that one is probing to try to understand whatever is proposed and the thrust of a particular amendment—I was probing, as I had indicated to the Bill team.

I had not expected that answer, but I now understand the range of things which can happen under this clause. One is accustomed to phrases such as “for different purposes and for different persons”, which is what I think we are being asked to read into this provision. I note that the Minister said that guidance,

“can be endorsed by the Chancellor”—

I was not sure what route that was taking me down. I am grateful to noble Lords for indulging me. I, for one, now understand better what is proposed. I beg leave to withdraw the amendment.

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Moved by

[Baroness Vere of Norbiton]

183: Clause 55, page 115, line 18, at end insert “or areas”

[Baroness Vere of Norbiton]

My Lords, as my noble friend Lord Dunlop set out to your Lordships’ House last week when repeating a Statement from my right honourable friend the Secretary of State for Northern Ireland, the current political situation in Northern Ireland is highly unusual. The Government are, none the less, committed to the central principles of the Sewel convention. Noble Lords will recall that the Government have made a commitment to not commence provisions relating to matters devolved in Northern Ireland without the appropriate consents having been obtained. Although it should already be possible to commence provisions at different times in different parts of the UK, Amendment 183 puts this beyond doubt, helping to ensure that we can fulfil this commitment. I beg to move.

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[Lord Kennedy of Southwark]

I am happy with the amendment. It is, unfortunately, necessary in this situation. I hope the parties can get round the table and get the Administration back and up and running again.

[Baroness Vere of Norbiton]

I thank the noble Baroness for her comments and, of course, I will write with further clarification.

Amendment 183 agreed.

Criminal Finances Bill

Baroness Vere of Norbiton Excerpts

3rd reading (Hansard): House of Lords & Report stage (Hansard): House of Lords
Tuesday 25th April 2017 Lords Chamber

Moved by

[Baroness Vere of Norbiton]

9: Clause 9, page 34, line 47, leave out from beginning to end of line 9 on page 35

[Baroness Vere of Norbiton (Con)]

My Lords, we now come to a group of government amendments relating to improvements to the operation of Chapter 2 of Part 1 of the Bill. I hope the House will agree that these are technical and uncontroversial.

Clause 9 permits extensions to the moratorium period for suspicious activity reports, and Clause 11 allows the National Crime Agency to apply for a further information order. These powers will be available in all the UK jurisdictions. However, we have consulted the Scottish Government, who have confirmed that the wording in the Bill does not accurately reflect the common-law position in Scotland, which recognises the role of the Procurator Fiscal in directing criminal investigations. Amendments 9, 11 and 12 reflect that principle in Scotland so that the moratorium extension and further information orders should be applied for only by the Procurator Fiscal.

Clause 10 permits, on a voluntary basis, the sharing of information between regulated-sector entities for the purpose of tackling money laundering. This currently allows those entities up to 28 days to share information following an initial notification and to provide a report to the NCA. Following further discussions with the regulated sector, we have concluded that more time is needed to ensure more effective sharing in complex cases, where numerous banks, for example, may hold relevant information. Amendment 10 increases this time limit to 84 days, which will still maintain a proportionate limit on how long these companies have to share information.

Finally, Amendment 49 amends POCA to ensure that extensions to the moratorium period and further information orders that are issued in one jurisdiction in the UK, such as Scotland or Northern Ireland, will be recognised in the others. I beg to move.

[Lord Mackay of Clashfern]

My Lords, I am glad that the Government have taken account of the special situation in Scotland.