Rwandan Genocide: Alleged Perpetrators

Debate between Ben Wallace and Margaret Hodge

Tuesday 9th April 2019 Commons Chamber

[Mr Wallace]

My hon. Friend makes a good point. The Africa Minister visited Rwanda not only to remember the horrors of the genocide and to say, “You are not forgotten,” but to continue to commit Britain’s support for that country and the amazing progress it has made since 1994.

[Dame Margaret Hodge (Barking) (Lab)]

I congratulate the right hon. Member for Sutton Coldfield (Mr Mitchell) on raising this issue. Were we talking about people who were allegedly involved in the Nazi holocaust, there would be a much stronger sense of urgency on the action that needs to be taken. In that context, I believe the Minister is defending the indefensible. During the extradition proceedings, there have been 10 years in which I assume information has been gathered by the authorities. To say that it will take a further three to five years, or probably closer to 10 years, to bring the matter to trial is just unbelievable. Complexity and thoroughness do not justify this level of delay, and I urge him to listen to the unanimous voices on both sides of the House and do all in his power—it is not about resources but about a will to act—to ensure that the police pursue this and that these people are brought to justice much more swiftly.

[Mr Wallace]

I hope the right hon. Lady does not think that because I have upheld the rule of law about the courts, there is no urgency. I would like to see those people off our streets. I do not want war criminals walking around this country. I do not want them here on a day-to-day basis. My strong view is that they should face justice, but police investigations are complex, and there is no magic wand that we can wave to force these things to happen at a quicker pace. We can allocate resource, offer to remove any barriers, whether international or not, and go to court—as we did—on behalf of the victims and the people of Rwanda to try to get this dealt with, but I can do no more than ensure the police know of the urgency. I can continue to monitor the situation and press them, weekly if necessary, to ensure we get a resolution. There is a determination on all sides of the House to bring war criminals to justice, and we will continue to press that.

Money Laundering

Debate between Ben Wallace and Margaret Hodge

Monday 19th March 2018 Commons Chamber

[Mr Wallace]

My hon. Friend makes a very sound suggestion about a public list. As hon. Members will know, the Government are consulting within the various Departments on how to make sure that the amendment we put forward actually makes a difference. That is why we opposed the Labour proposal in Committee: it was not because we disagreed with having a Magnitsky amendment, but because we wanted to make sure we had one that worked. [Interruption.] Labour Front Benchers are saying, “Point of principle”. Would they rather we accepted a flawed amendment that did not do the job, or would they like this Government to deliver action, as we have done with unexplained wealth orders, by getting the law right in the end?

[Dame Margaret Hodge (Barking) (Lab)]

I acknowledge that the Government have taken some steps, but I put it to the Minister that they have not taken enough. Others have raised the issues of property and of our tax havens, and I want to raise another issue with the Minister, which is the tier 1 investor visas—the golden visas. Anybody who wants one of those visas needs to demonstrate that they have £2 million they wish to invest in the UK, and we know that Russia is one of the two top countries taking advantage of tier 1 investor visas. What steps will the Minister take to enable us to understand where the £2 million-plus comes from, so that we can be assured it is not dirty money and that these are not unsavoury individuals?

[Mr Wallace]

Not for the first time, the right hon. Lady makes a very good suggestion. When it comes to dealing with foreign oligarchs and serious organised criminals from overseas, we are clear that this is as much about the free movement they enjoy as about the actual assets they are moving around and harbouring. We already have the powers in our visa regime to take action, and as she quite rightly says, we will be looking at that tier to make sure we do better due diligence, if we need to, on where the money comes from.

In all of this we must be clear that the difference between us and, for example, Russia is that we believe in the rule of law. Under the Equality Act 2010, we cannot talk about Russians in a blanket fashion; we have to recognise that there are certainly legitimate Russians and other people from overseas who come here to invest in this country, and I am sure the shadow Chancellor would not like us to break the Equality Act. We have to make sure that we act on the basis of evidence. We will do so, and where we find wrongdoing, people will be refused a visa.

Criminal Finances Bill

Debate between Ben Wallace and Margaret Hodge

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Tuesday 25th October 2016 Commons Chamber

[Mr Wallace]

I will make some progress and Members will doubtless be able to make their points throughout the debate.

Many of the criminals who profit from such activities live in plain sight, untouched by law enforcement agencies. They reap the benefits by money laundering—moving, hiding and using the proceeds of their crimes to fund their lifestyles and enable further criminality. It is estimated that the annual amount of money laundered globally amounts to $1.6 trillion, while the National Crime Agency assesses that many billions of pounds are laundered into or through the UK as a result of international corruption.

We should be rightly proud of the UK’s status as a global financial centre. This is one of the best places in the world in which to do business, but we must recognise that the size of our financial sector and open economy and the attractiveness of the London property market to overseas investors make this country unusually exposed to the risks of international money laundering. That is why this Government are taking action—to combat money laundering, terrorist finance and corruption—here and overseas. We are sending a clear message that we will not stand for money laundering or the funding of terrorism through the UK.

[Dame Margaret Hodge (Barking) (Lab)]

I am extremely grateful to the Minister for giving way. I agree with the content of his remarks, but I wish to pursue further the issue that has been raised by the hon. Member for Belfast East (Gavin Robinson). Does the Minister agree that transparency is absolutely key to trying to tackle some of the corruption and money laundering that take place? If he does agree, why is he not using this Bill to ensure that the overseas territories and Crown dependencies, which come under our jurisdiction, publish publicly available registers of beneficial ownership?

[Mr Wallace]

Yes, I absolutely agree that transparency is one of the steps along the path of tackling both corruption and money laundering. That is why, at the anti-corruption summit in May, the Prime Minister basically reaffirmed that commitment. Even before that, we had worked with the overseas territories and Crown dependencies to ensure that, hopefully by the end of this year or into next year, there will be transparency, registers, of which a considerable number will be public, and automatic information exchange between our tax authorities and those of our dependencies. In that way, we will be able to have access to information about people hiding tax from us, and our law enforcement agencies will then be able to set about tackling the matter.

This Bill is part of that process. A key element of that approach will be ensuring that we work with the private sector to make the UK a more hostile place for those seeking to move, hide or use the proceeds of crime.

--- Later in debate ---

[Dame Margaret Hodge]

Indeed. I would also add that the Brexit provisions might also lead to increased activity through the overseas territories and tax havens, so there are several dangers.

A number of Members have mentioned the evidence that backs up the importance of the Bill, but I want to point out two or three facts that have not yet been raised. The World Bank reviewed 213 corruption cases from a 30-year period between 1980 and 2010. Shell entities were involved in 70% of them, and UK Crown dependencies and overseas territories were second after the US on the list of those who provided shell entities. That is clear evidence of the importance of the role played by the Crown dependencies and overseas territories. Do we always have to wait for another leak to understand that? We will keep on getting them—the Mossack Fonseca leaks and the Panama papers will be just one in a stream. If we look at the information we garnered from the leaks, over 200,000 corporate entities were exposed, more than half of which were registered in the British Virgin Islands. I ask the Minister to consider that.

I also came across the African Progress Panel, which found that citizens of the Democratic Republic of the Congo were deprived of some £1.35 billion—twice their health and education budgets combined—due to the sale of mining contracts to five anonymous BVI companies. Those assets were sold at about one sixth of their commercial value, enabling the secretive offshore companies to sell them on and secure profits of more than 500% of the original moneys they paid. Again, desperately needed resources were lost to the poorest countries in the world.

If we are really to tackle the corruption, evasion and avoidance that occur in jurisdictions over which we have ultimate control, we must have the transparency that a number of Members have asked for this afternoon.

[Mr Wallace]

I have listened carefully to what the right hon. Lady said. Will she not concede that since the lead-up to the London anti-corruption summit in May, the Crown dependencies and overseas territories have agreed to establish a central register of beneficial ownership and a data-sharing system with the UK enforcement agencies that will give us access to those data almost in real time, and that that goes a long way to meeting some of her concerns? I recognise that the Scottish National party would like this to be public as well as shared with our law enforcement agencies, but it still goes some way on this issue. On the other side, the unexplained wealth orders for politically exposed persons will allow us to grab the money should they put it in this country and live in the nice houses that they sometimes seem to live in.

[Dame Margaret Hodge]

In my view, and indeed the British Government’s view, publicising those registers of ownership is crucial. We decided to do that for ourselves, so why are we not using our powers to enforce it on the Crown dependencies and overseas territories? There are multiple reasons why we have decided to do it for ourselves, and I shall mention two of them. First, for many of the poorer countries, getting their agencies up to speed so that they can pursue people and know what questions to ask is tough, and public registers make it much easier for those people to be interrogated. Civil society should interrogate them, and the registers make it much more likely that the type of activity that I mentioned in the DRC is revealed.

Secondly, we are talking about a very reactive response; if a register can be interrogated only by the international agencies that are allowed to have access, people will have to know that there is something they are after before being able to discover whether or not there is information about beneficial ownership that is relevant to a criminal activity or to aggressive tax avoidance and so on. Such an approach presupposes a degree of intensive resources and knowledge that will not necessarily be in place. Although one of course welcomes the creation of these registers, having them made public is central to making them work.

The Minister should listen not to my words on this, but to those of the former Prime Minister, who was absolutely clear, year on year, when talking about these issues, that the openness and transparency of these registers was what mattered. In 2013, he said to the Crown dependencies and overseas territories that they had to rip aside the “cloak of secrecy” by creating a public register of beneficial ownership. In April 2014, he wrote to the overseas territories, saying that

“beneficial ownership and public access to a central register is key to improving the transparency of company ownership and vital to meeting the urgent challenges of illicit finance and tax evasion.”

He also expressed his hope that overseas territories would follow suit to

“consult on a public registry and look closely at what we are doing in the UK.”

On a trip to the Caribbean in September 2015, he said:

“Some of the British Crown Dependencies and Overseas Territories are making progress in this direction. And others, frankly, are not moving anywhere near fast enough. I say to them all today, including those in this region”—

the Caribbean—

“if we want to break the business model of stealing money and hiding it in places where it can’t be seen: transparency is the answer.”

When we established our own public register here in the UK, David Cameron said that

“there are also many wider benefits to making this information available to everyone. It’s better for businesses here, who’ll be better able to identify who really owns the companies they’re trading with. It’s better for developing countries, who’ll have easy access to all this data without having to submit endless requests for each line of inquiry. And it’s better for us all to have an open system which everyone has access to, because the more eyes that look at this information the more accurate it will be.”

I simply say to the Minister that I really do agree, in this instance, with the former Prime Minister and I hope the current Government will listen carefully to his wise words.

[Dame Margaret Hodge]

I, too, have seen that survey. Any action that the Minister takes will be warmly welcomed by the public across the whole of the United Kingdom—by people of all ages and all genders. This is a really important bit of work, and I hope that the Minister will take it seriously.

I am concerned about the action taken so far. I am concerned that in December 2015 when we had the Overseas Territories Joint Ministerial Council, the Government failed to persuade those territories to implement public registers. I am concerned that, in March 2015, the Cayman Islands and the British Virgin Islands refused to meet Ministers from the Foreign Office and the Treasury. I am concerned that they failed to meet the Financial Secretary’s request that they adopt registers by November 2015. I am concerned that—as I understand it—they have ignored letters from UK Ministers. I am deeply concerned that tax is not even on the agenda for the forthcoming meeting of the Overseas Territories Joint Ministerial Council. I hope that the Minister can address that point. We do have the powers, and, as was mentioned in a previous intervention, we have used them before. The Government must act.

If the Minister could at least tell us that he will set a timeline, at the end of which, if matters cannot be resolved in a collective and collaborative way with the overseas territories and the Crown dependencies, the Government will use their power. That would go a long way to settling some of our concerns today. I hope that he can at least consider that as a possibility for taking the matter forward.

May I briefly comment on some of the other provisions in what is a warmly welcomed bit of legislation? On the unexplained wealth orders, it is particularly welcome that they will be applicable no matter where in the world the offence takes place. May I ask the Minister two questions? If the money comes from an overseas territory —a developing country, for example—will there be a notification to that country of the setting of an unexplained wealth order? Again, our enforcement agencies will be more capable than some others in pursuing laundered money.

[Mr Wallace]

I can get an exact answer to the right hon. Lady’s question. Just around that, though, we have started to sign memorandums of understanding with a number of countries—we signed one in August with Nigeria—to help them recover their assets, without barriers between here and there, and to assist them, both in their country and here, with tackling crime. Once they find their assets, we will get them back to them as soon as we can.

[Dame Margaret Hodge]

I am grateful to the Minister for providing that information. Will he explain why the orders do not apply to politically exposed people inside the European economic area? Will he look again at that issue, because there may occasionally be a relevant instance where that is important?

[Mr Wallace]

That is quite straightforward. We are unable under EU law to discriminate against different members of the EEA in relation to the UK citizen. What we do for the UK citizen we also have to do for other members of the EU.

[Dame Margaret Hodge]

I wish to raise two other issues. One arises from a debate held in the House on March 2012, initiated by the hon. Member for Esher and Walton (Mr Raab), on what is known as the Magnitsky-style amendment. The argument there arose from the horrific and brutal killing of Sergei Magnitsky—a Russian lawyer who was tortured and murdered because he uncovered a huge $230 million tax fraud in Russia. Allegedly, $30 million of that found its way laundered into the UK, according to evidence given to the Home Affairs Committee.

The hon. Gentleman proposed something similar to an amendment enacted in America—he and I would support such an amendment during the proceedings on the Bill—that would have ensured that foreign individuals involved in corruption and human rights abuses had their assets frozen, be denied right of entry to this country and be publicly named and shamed. Again, although that is slightly different to other provisions in the Bill, I think that there is strong cross-party support for introducing a Magnitsky-style amendment into UK legislation.

I hope that the Minister will look favourably on such an amendment. I have looked at the details, and a particularly disturbing aspect is how many UK banks were involved in laundering the alleged $30 million into the UK, according to evidence given to the Home Affairs Committee. They include Barclays, HSBC, NatWest, Bank of Scotland, RBS, Citibank, Bank of America, Lloyds TSB and the Bank of Tokyo. I hope that, from that horrific tragedy, we can introduce an important change in our legislation.

Finally, I want to talk about the corporate failure to prevent tax evasion, which other hon. Members have spoken about. I welcome the Bill as the first attempt to place responsibility for tax evasion not just on individuals but on corporations. However, this is a very small first step towards making those who are responsible for devising, advising and facilitating evasion and avoidance accountable for their actions.

Before we go over the top on saying what a great change the Bill represents, we should realise that it will apply only where a criminal offence has been successfully prosecuted against an individual or where an individual adviser has committed an offence when working for a corporation. It does not cover negligence by the corporation. It will not make the corporation responsible for the crimes of its staff. It does not cover aggressive tax avoidance. Unlike my Front-Bench colleague, I think that that is where the important bit of action must be taken if we are to ensure that we get the resources into coffers according to people’s wealth and their profits and incomes.

The Bill simply asks that reasonable procedures are in place, which is a risk-based and proportionate exercise, so it does not represent a fail-safe procedure. As I think through some of the instances we heard about during my time chairing the Public Accounts Committee, where we felt that corporations were misbehaving, I do not think that it would cover PricewaterhouseCoopers and all the stuff that it was doing in Luxembourg, where it was clearly selling schemes in an industrial way that had no other purpose than to avoid tax. We had a discussion earlier today about Heathrow. I do not think that it would cover Heathrow, which has managed to avoid paying a heck of a lot of tax on massive billion-pound profits that it has made. I do not think that it would cover Google. I do not think that it would cover—this is really important—the fact that when we interviewed advisers about the tax advice they give to corporations and individuals, they said that they would give advice so long as there was a 50% chance that it was not challenged by HMRC. The reverse of that is that there is a 50% chance that it will be challenged by HMRC, but given the size of the task and HMRC’s limited resources, it takes a long time to catch up with such schemes and does not have the resources that some of the big accountancy firms, advisers, banks and lawyers et al. have. That will be caught not by the first welcome but small measures that are being taken.

From all the work that we did in the PAC, the only thing that I can think would be caught is probably HSBC’s actions. The non-executive director, Rona Fairhead, gave evidence to us, sought to blame the whistleblower in that instance for being a thief—I thought that that was pretty awful—and blamed the front-line staff for doing what was obviously expected of them by the organisation for which they worked. She, as a non-executive director earning £500,000 a year at HSBC, felt that she did not have any responsibility to ensure corporate governance. The measure might catch that sort of instance, but it is very limited, and as we examine the Bill, I would welcome opportunities to extend that important first step in ensuring corporate liability as well as individual liability and accountability for actions that have been taken. I warmly welcome the Bill and I hope that the Minister can take the further steps that I have suggested.