Money Laundering

Debate between Ben Wallace and John McDonnell

Monday 19th March 2018 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the Government’s action to address dirty money being laundered in the UK.

[The Minister for Security and Economic Crime (Mr Ben Wallace)]

I thank the shadow Chancellor for giving the Government the opportunity to come here today to say what they have been doing on dirty money and money laundering in the United Kingdom. It is a long list, Mr Speaker, so I ask you to have a bit of patience and I will try to be as quick as possible in reading it.

We have made it harder for crooks to launder money through property, jewellery and betting. We have reversed the burden of proof so that people we think have links to organised crime have to prove where their assets come from. If they cannot prove it, we will seize the asset and dispose of it, or keep it to distribute it to countries where it may have been stolen. We have, for the first time, through the Magnitsky amendment made it possible to confiscate assets from people guilty of gross human rights abuse. We will complete that with an amendment to the Sanctions and Anti-Money Laundering Bill currently going through Parliament. I pay tribute to my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) and the right hon. Member for Barking (Dame Margaret Hodge), who actually led the campaign on the Magnitsky amendment, not Labour Front Benchers.

We have made it easier to seize criminals’ money from bank accounts. We have introduced new powers to be able to freeze terrorists’ assets, and we did so on the very day that the provision came into force. We have made it a criminal offence to fail to prevent tax evasion, both at home and overseas. We are currently exploring the potential of widening other areas where failure to prevent may apply in economic crime.

We have brought a number of prosecutions under the Bribery Act 2010 of those involved in bribery, and we have had the first conviction of a company for failing to prevent bribery. [Interruption.]

[Mr Wallace]

We introduced deferred prosecution agreements to ensure that we maximise incentives for companies to face up to fraud and corruption. We are setting up the National Economic Crime Centre within the National Crime Agency. We have brought together the many strands of economic crime under one Minister—namely myself. We have bolstered the Serious Fraud Office by ensuring access to blockbuster funding so as to ensure that big business and overseas oligarchs cannot use their wealth to obstruct justice. The previous Prime Minister, David Cameron, initiated an international anti-corruption summit. In response to the Panama papers, we established a joint financial analysis centre within the NCA. We have established one of the world’s first public registers of beneficial ownership of companies. We have helped to establish in all overseas territories and Crown dependencies a register of beneficial ownership, with mutual and, in some cases, live-time access to law enforcement. We have committed to establishing a public register of overseas owners of property in the United Kingdom.

This Government have taken real steps to tackle criminal finance in this country. Whoever the crooks are, wherever they are from, and no matter what their nationality, we will pursue them and their cash.

[John McDonnell]

I thank the Minister for his response.

Twelve months ago, I raised in an urgent question the issue of the Russian laundromat, as it was called, laundering £20 billion of criminal funds through the City of London. Despite all that the Minister has said, the National Crime Agency estimates that £90 billion from the rest of the world is still laundered through the City each year, while the United Nations estimates that $100 billion has been lost in the British overseas territories. Despite all the actions that he set out, there is still a major problem. At the weekend, the Government said that they would enter into “detailed discussions” on further reform proposals. I therefore have a number of questions to ask the Minister.

Let me be clear: we welcome the Government’s new willingness to incorporate Labour’s proposals for Magnitsky measures to be included in the Sanctions and Anti-Money Laundering Bill, but we would welcome, in the spirit of co-operation, full and thorough discussion of the final drafting of the new clauses and amendments. We all agree that there is a need for complete openness and transparency in our financial system if we are going to be effective in tackling money laundering. Back in 2015, the Government initially promised, following two consultations, a date for a register of owners of UK property based overseas. After repeated delays, why are we now told that a register will not be published until 2021? There is minimal checking of the UK’s own register of company ownership. Indeed, it was possible for a journalist to set up a company called Crooked Crook Crook Ltd. Have the Government undertaken an assessment of the number of fraudulently registered companies in the UK? If not, when will they do so?

In the recent Sanctions and Anti-Money Laundering Bill Committee, the Government justified their lack of action on foreign trust or company service providers by saying that they were lower risk than the UK’s own trust or company service providers. In the light of the most recent evidence of money laundering via overseas TCSPs, will the Government revisit that assessment?

Why have the Government not included trusts in the register of beneficial ownership, as Labour has so long asked for? Given the concerns about corrupt funds being laundered through properties in the UK, will they now consider including Labour’s proposal for an offshore company property levy in their reforms? Will they finally join Labour in accepting the need for public, transparent registers for overseas territories and Crown dependencies?

Finally, 634,000 suspicious activity reports have been filed since October 2015. What will the Government now do to ensure that the enforcement agencies are fully resourced to tackle this scourge on our society?