Sanctions and Anti-Money Laundering Bill [Lords]

Bob Seely Excerpts

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

[Mr Bob Seely (Isle of Wight) (Con)]

It is a pleasure to follow the hon. Member for Nottingham North (Alex Norris), who spoke so eloquently. I welcome the Bill, but like so many other Members who have spoken this evening, I think we should be doing more.

It is not in our interests to have lax standards. It is in our interests to have the highest standards, which I know the Foreign Secretary and others are trying to achieve. The Bill is not just about finance; it is about power. Our finance system—the western finance system—is a source of power. Russian and Chinese oligarchs, and especially the Russians, use our finance system. That gives us influence over them. This is not just about terrorists, dodgy individuals or drug dealers. This is about changing and influencing state behaviour. I very much hope that Ministers will see it in that guise. With new forms of conflict in the world that we inhabit, financial power is a hard bit of soft power. The power to make rich people poor by freezing their assets should not be underestimated because it is a significant source of our influence.

Other Members, such as my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), have spoken eloquently about the lack of Magnitsky elements in the Bill, which concerns me. There are no visa bans in the Finance Bill amendments, and there is no presumption of action. I remind Members that Magnitsky was a Russian lawyer who worked for Bill Browder. He was tortured for several months and murdered, and his dead body was put on trial. That is remarkable, even by Russian standards. It would be nice if the Government had more ambition when it came to the Magnitsky elements of either the Finance Bill or this Bill.

The idea that weak or lax standards help the UK to compete in international money markets and international economies is deeply misguided. We are in danger of wagging our fingers at people like the Russians while allowing their state officials, people close to their regime and those on sanctions lists a free light to live here and use the western system.

EN+ was floated recently in the City. It has been reported that US security officials were concerned about the float and raised issues about it, as it may have been used to pay off loans to VTB, a Russian state-owned bank that is subject to sanctions. If that is the case, I would love Ministers to explain to me why it is a wise move effectively to turn a blind eye while the Russians play the sanctions process that we have put on them.

I will touch briefly on the offshore problem. I congratulate Private Eye on the work it has done in recent years to highlight the effects and the extent of offshore vehicles in the UK. When even in a place such as the Isle of Wight we have property owned by companies based in the British Virgin Islands, the Cayman Islands, Jersey, Guernsey, Luxembourg or Gibraltar, the system is flawed. Lax standards are corrupting for our country and our financial system and it is short-sighted to see it otherwise; I am sure Ministers will agree. When houses in Belgravia and Hampstead are used as glorified Rolexes for the international kleptocracy, we are getting something wrong.

I very much hope that the Minister will pledge to continue to make aspects of the Bill tighter, consider what can be done about the missing Magnitsky elements and make a commitment to having the highest standards in the Bill, rather than following others.

Sanctions and Anti-Money Laundering Bill [Lords]

Bob Seely Excerpts

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

[Dame Margaret Hodge]

I simply draw the attention of the hon. and learned Gentleman to what his Government stated in 2012 in the White Paper. In that White Paper, they set out the fact that they were jealously guarding their right to legislate as and when that became appropriate. That is what his Government said in 2012.

[Mr Bob Seely (Isle of Wight) (Con)]

On a point of record, I believe that that was in our previous two manifestos, so I am not quite sure why we, on the Government Benches, are arguing on this point.

[Dame Margaret Hodge]

I thank the hon. Gentleman for his intervention.

For the sake of clarity, let me just say that, in the past, Conservatives have used this power when they legislated to ensure that capital punishment was abolished in all our overseas territories. A Labour Government used the power to ensure that we brought to an end discrimination on the grounds of sexuality in our overseas territories. One of us—I never remember which—used the power to intervene in the Turks and Caicos when there were problems with the administration of governance.

--- Later in debate ---

[Sir Henry Bellingham]

My right hon. and learned Friend the Father of the House is, as ever, very wise. I want to proceed on a pragmatic, staged basis, and I think we could have come together on the Government’s compromise, had it been tabled in good time.

[Mr Seely]

Would not just waiting until everyone else moves show a lack of leadership on our part?

[Sir Henry Bellingham]

That is a fair point, and those of us who have been supporting the Government loyally on this and working with them accept that it is a weakness in the argument. If we set an example, we hope that other people will follow. I hope that when the Minister winds up he will say how we will try to influence other countries and jurisdictions to follow this example.

--- Later in debate ---

[Catherine West]

Indeed. And I hope that the challenge will be met to reduce inequality in housing in Scotland, because I know that a very small number of people own rather a lot of properties.

On the role of other facilitators of tax evasion and avoidance and the big four accountancy firms, many Members feel it is time that they were brought to book. My right hon. Friend the Member for Barking has done a lot of work on that. The next stage is to try to clean up the City of London more effectively and to see the closure of certain poor practices, such as Mossack Fonseca and others. Yes, it was a one hit wonder, but we did see the closure of a number of underperforming legal practices. The next step of this campaign is how to allow the pin-striped enforcers of tax evasion and avoidance to have a more honest and equal way of practising their profession.

That is all I want to say. It is so good to see consensus in the House today.

[Mr Seely]

It is a privilege to follow the hon. Member for Hornsey and Wood Green (Catherine West).

I believe that the fight to improve the integrity of our financial system and to do what we can to reduce money laundering is critical in the fight against not only corruption but the malign influence of authoritarian states. I very much welcome the work done by my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) and the right hon. Member for Barking (Dame Margaret Hodge). I felt very proud to agree to rebel against the Government— I am quite glad I did not have to—but nevertheless, I thank them for that amendment.

On the point about corruption and the malign influence of others, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), the hon. Member for Rhondda (Chris Bryant), the right hon. Member for Exeter (Mr Bradshaw), my hon. Friend the Member for Gravesham (Adam Holloway) and I have been shown documents that we believe relate to our national security and money laundering. They originate from Monaco’s Sûreté Publique, the police department that manages security and foreign residents in that area. They are based on the Sûreté Publique’s own information and on information provided by the French Direction de la Surveillance du Territoire—the DST—which at the time, was the French equivalent of MI5.

These documents are brief, terse, factual files, listing activities, associations and judicial actions. They have been authenticated by senior French intelligence sources and by British and American counterparts familiar with their contents. The documents link a noted individual in this country with Russian intelligence. These files are dated from 2005 and cover the period from the mid-1990s. The documents concern Christopher Chandler and his brother—Christopher Chandler is a public figure, owing to the Legatum Institute. In citing this evidence, I note the words of the right hon. Member for Exeter, who in November 2017 called for the House’s Intelligence and Security Committee to examine Mr Chandler.

According to the French security services, as recorded by their colleagues in Monaco—and clearly, I am confident that these documents are genuine—Mr Chandler is described as having been

“an object of interest to the DST since 2002 on suspicion of…working for the Russian intelligence services.”

I repeat:

“an object of interest to the DST since 2002 on suspicion of…working for the Russian intelligence services.”

[Mr Ben Bradshaw (Exeter) (Lab)]

As the hon. Gentleman rightly said, I first raised concerns about Legatum and Mr Chandler back in November. Does he agree that the information that he has just put in the public domain, combined with the growing concern about corruption, money laundering and the sale of passports in Malta, where Chandler has just acquired citizenship, demands urgent investigation by the UK authorities now?

[Mr Seely]

I am most grateful for that intervention. I am aware that the right hon. Gentleman has seen these documents and that he shares my concerns. I believe that the right hon. Member for Birmingham, Hodge Hill, should he have the privilege of being called to speak, will talk further on that point and make reference to these files.

Christopher Chandler’s personal file is marked “File code S”, a DST marker indicating, if I understand correctly, a high or higher level of threat to France. In France, the letter “S” is now used to designate radical Islam. In Monaco then, it was used to designate counter-espionage. As I have said, Mr Speaker, I believe that other Members, if you wish to call them, may cite further details—the right hon. Member for Birmingham, Hodge Hill, the hon. Member for Rhondda, the right hon. Member for Exeter or my hon. Friend the Member for Gravesham.

I wish to state explicitly that I make no criticism of the staff at Legatum, nor those people who have engaged with its charitable work, nor members of the public, nor, clearly, Members of this House who have dealt with this institution. I have thought long and hard before making this statement, but I have done so because I believe, and the five of us believe, that it is in the national interest to do so. If people like Mr Chandler are vulnerable to malign influence—maybe he is an innocent party in this, who knows?—especially if the information on them is covert, that matters to our democracy.

In November 2017, the Prime Minister highlighted the danger from Russia of subversion. I take my lead from her when she said that the Russian regime was trying to “undermine free societies”. I also read the excellent piece in The Sunday Times this weekend looking at how Russian bots may have manipulated elections. One of the problems in elections is that if they are manipulated successfully, the winning side does not want to know and the losers plead sour grapes, so the answer is to do what we can to strengthen our electoral system before it is too late.

[Chris Bryant]

I commend the hon. Gentleman for what he has said and fully concur with what he has argued—I have seen the papers as well and I have come to the same conclusion as him. Does he think that the Magnitsky clause will make a significant difference in our being able to tackle this kind of hidden pervasive influence in British society and British politics?

[Mr Seely]

Anything that helps us is important because we need to keep our society free of covert and malign influence. I was in the States last week, as the hon. Gentleman knows, and I am working with Congressmen there and in Canada, Australia and New Zealand, so that we can combine best practice. That is important because a counter-propaganda Bill is going through the United States Congress—do we need that here, etc.?

If I see information of this kind, I have a choice: I can disregard it and become complicit or, if it is genuine, I can put it in the public domain. It might be that Committees will wish to have access to this information, and I suspect that those who have it will provide it to any of the six Committees investigating Russia, if they wish to do so. It might be that Mr Chandler can provide a satisfactory explanation or argue that these relationships, if they existed, are now historical or have been misrepresented in the documents. I do not use privilege lightly, Mr Speaker. He might wish to offer evidence, written or oral, to any of those six Committees, whose work I am supporting, in a modest way, as secretary to the Russia steering group. I look forward to his response— I am quite sure there will be one.

I will be writing to the Prime Minister in the coming weeks to suggest further measures to strengthen our democracy and electoral system. The struggle of our generation is how we deal with authoritarian states and their actors, official or proxy, who use free and open societies to damage those free and open societies. We need to do something about it. Increasingly, Members now see that covert malign influence from authoritarian states, most commonly our friends in the Kremlin but also elsewhere, is a real and present danger to our nation, to our financial system—hence this debate—and to the transparency of our democracy and electoral system, not to mention the Kremlin’s ability to conduct acts of violence and murder on our soil. We have a duty to speak up and to use this House for the public good. That is what I am doing now.

[Several hon. Members rose—]