Hong Kong

Debate between Helen Goodman and Alan Duncan

Tuesday 2nd July 2019 Commons Chamber

[Sir Alan Duncan]

I am grateful to my right hon. Friend for pointing out that I am answering questions that do not normally fall within my responsibility. My wingspan has stretched wider than I or any Member would normally expect.

My right hon. Friend is far more expert on this issue than I am, but the one point on which we can all agree is that a period of de-escalation and dialogue would be far preferable to any continuing tension and violence. I very much hope that all those who are involved in this issue can pause for thought and try to plot a way through this without further escalating any kind of conflict.

[Helen Goodman (Bishop Auckland) (Lab)]

The Hong Kong situation is spiralling out of control very fast now. It is unfortunate that, in the absence of a Minister with responsibility for the far east, the Foreign Secretary is not in his place. I agree with the remarks of the right hon. Member for Orkney and Shetland (Mr Carmichael). He set out well the events of yesterday. I want to concentrate on four questions for the Government. First, Hong Kongers have made it abundantly clear that they want the disastrous extradition laws to be abandoned for good. That is not an unreasonable request. Will the Government finally take the side of the Hong Kong people and call on Carrie Lam to scrap this legislation?

Secondly, I welcome and agree with the Foreign Secretary’s call for a public inquiry into the actions of the Hong Kong police force. Evidence has emerged that the order to fire tear gas on the protesters was given by Superintendent Justin Shave, a British expat now serving with the Hong Kong police, and that two other expat chief superintendents were two of the most senior officers in charge of crowd control on that day in June. What are Ministers doing to bring to book these British citizens who ordered the police brutality?

Thirdly, after firing rubber bullets on the protesters, the Hong Kong authorities accessed hospital data records in order to arrest them. That is random and unfair. Will the Minister join me in condemning this appalling behaviour? Clearly, yesterday the events in the Legislative Council were unacceptable, but the police tactics appeared to have been totally confused. Finally, the root cause of the chaos is the fundamental democratic deficit in Hong Kong. The rights enshrined in the Basic Law and the promises to move towards universal suffrage are being trampled on. When will the Government listen to the voices of the citizens of Hong Kong and put democratic reform back on the agenda?

Colombia Peace Process

Debate between Helen Goodman and Alan Duncan

Tuesday 18th June 2019 Westminster Hall

[Sir Alan Duncan]

I will acknowledge them very fulsomely. We particularly support the women’s network, which assists women who have been victims of sexual violence, which is often the most repulsive and hideous aspect of the violence that they suffer.

Returning to what we are doing, through our conflict, stability and security fund alone we have spent over £40 million since 2015 on projects and programmes that help to cement a lasting peace. President Duque’s visit this week has been an important opportunity to strengthen our relationship with the Colombian Government across the board— he has many Ministers with him for the two days of his visit. The Prime Minister expressed her full support for implementation of the peace accords in her meeting yesterday, as did the Foreign Secretary when he and I met the President earlier today.

Our discussions of course went much further than that, covering the full range of co-operation, from climate change and trade to security and human rights. It is a sign of how our relationship is evolving towards a genuine strategic partnership through which we will work together to address the shared challenges we face.

Later today, we will announce a memorandum of understanding for a sustainable growth partnership, through which both countries will commit to meeting ambitious targets on halting deforestation and environmental crime and to working together on the low-carbon transition. President Duque was clear at his Canning House lecture yesterday: deforestation in Colombia must stop. I am confident that our new sustainable growth partnership will be an important weapon in Colombia’s arsenal with which to fight deforestation and environmental crime.

It is worth noting the programmes that the UK undertakes in rural areas of Colombia, which directly benefit communities there and their environment. UK-funded programmes in Colombia work across the country, at national, regional and municipal level. Recovery of post-conflict rural communities is a priority focus for the cross-Government conflict security and stability fund programme that supports the peace process throughout the country. It directly supports 18 organisations working in rural parts of the country, while the cross-Government prosperity fund also works with six local rural partners. Our international climate finance programmes work with partner organisations in rural areas, and directly with farms and indigenous communities.

On the wider issue of business and the environment, honourable Members may wish to be aware of UK action in the extractive sector in Colombia. The UK has sought to address human rights risks in the Colombian mining industry by encouraging compliance with the OECD’s due diligence guidance and by fostering partnerships between the private sector and international organisations, local government and civil society to support responsible mining practices.

[Helen Goodman]

That is very important, because it is the new source of conflict in Colombia. I would like the Minister to consider that we perhaps need to have some sanctions on people who do not abide by the OECD guidance; I do not think there are any at the moment. Could he possibly take that away?

[Sir Alan Duncan]

I must say that I found the hon. Lady’s thesis about the importance of land very well thought through, very important and very significant. In terms of sanctions, as she well appreciates, from the legislation—

[Helen Goodman]

Not those kinds of sanctions—penalties.

[Sir Alan Duncan]

To complete my logic, at the moment we do actual sanctions with the European Union, although we will be able to do that soon, but I understand what the hon. Lady says about penalties; removing impunity for bad behaviour and bad conduct is, I think, what she is saying.

We funded a “train the trainer” project in the country on due diligence guidance for responsible supply chains. In addition, the UK has funded a project to support the engagement of the private sector with Colombia’s Truth Commission in its work as part of Colombia’s transitional justice process. The project developed methodologies, tools and recommendations aimed at addressing and promoting the role of the private sector in the transitional justice process.

Our £25 million prosperity fund programme also supports projects to help to develop Colombia’s national infrastructure and to build capacity in agritech and local government. This work will have important knock-on benefits for the Colombian economy and environment and for the peace process.

I also want to put on record, as has been mentioned today, our appreciation for Colombia’s generosity in hosting more than 1.5 million Venezuelans who have been forced to flee their home country. We are playing a part in the regional response by supporting it with an £8 million contribution to the global concessional financing facility.

We commend Colombia for the progress it has made following the peace accords, but we recognise that more needs to be done to implement them in full, to bring security and prosperity to all areas of the country and, crucially, to protect human rights. As an international partner and an old, long-standing friend of Colombia, the UK will continue to support the implementation of the peace agreement and to work with Colombia across a broad range of issues to promote prosperity and opportunity for all its people.

Russia (Sanctions) (EU Exit) Regulations 2019

Debate between Helen Goodman and Alan Duncan

Tuesday 14th May 2019 General Committees

[Sir Alan Duncan]

Thank you, Mr Hosie. You have rather stolen my first paragraph. It might not prevent the hon. Member for Bishop Auckland from deciding that she has not considered something that she has just considered, but we shall see whether she chooses to call a slightly fatuous Division. However, I apologise at the outset; she should have been written to and was not. I will investigate why that was not the case and will send her a subsequent letter, fully explaining the procedural hiccup.

If it is indeed her intention to try to vote down this statutory instrument, the consequences could be dire. We could end up with no Russian sanctions, which would be a very grave mistake.

[Helen Goodman]

The right hon. Gentleman knows that that is not the case. He knows perfectly well that, at the moment, the sanctions regime is covered by European law. He is not doing the Magnitsky part that we think he ought to be doing. He is making provision for a legal base for sanctions once the European Communities Act 1972 is no longer in force.

Because we debated it at length in the Bill Committee, he also knows that one of the problems with the Government doing so much through delegated legislation is that Her Majesty’s Opposition have no choice. We cannot amend this. All we can do is vote against it. If we win a vote, the Government can come back with a revised statutory instrument. But it is not in our gift to amend it, which obviously would be our preferred option; that is simply not open to us.

Russia (Sanctions) (EU-Exit) Regulations 2019

Debate between Helen Goodman and Alan Duncan

Tuesday 14th May 2019 General Committees

[Sir Alan Duncan]

Thank you, Mr Hosie. You have rather stolen my first paragraph. It might not prevent the hon. Member for Bishop Auckland from deciding that she has not considered something that she has just considered, but we shall see whether she chooses to call a slightly fatuous Division. However, I apologise at the outset; she should have been written to and was not. I will investigate why that was not the case and will send her a subsequent letter, fully explaining the procedural hiccup.

If it is indeed her intention to try to vote down this statutory instrument, the consequences could be dire. We could end up with no Russian sanctions, which would be a very grave mistake.

[Helen Goodman]

The right hon. Gentleman knows that that is not the case. He knows perfectly well that, at the moment, the sanctions regime is covered by European law. He is not doing the Magnitsky part that we think he ought to be doing. He is making provision for a legal base for sanctions once the European Communities Act 1972 is no longer in force.

Because we debated it at length in the Bill Committee, he also knows that one of the problems with the Government doing so much through delegated legislation is that Her Majesty’s Opposition have no choice. We cannot amend this. All we can do is vote against it. If we win a vote, the Government can come back with a revised statutory instrument. But it is not in our gift to amend it, which obviously would be our preferred option; that is simply not open to us.

Exiting the European Union (Sanctions)

Debate between Helen Goodman and Alan Duncan

Monday 29th April 2019 Commons Chamber

[Sir Alan Duncan]

I would genuinely like to thank all Members who have contributed to the debate. Many have done so from a position of significant expertise and knowledge of the countries mentioned in the framework sanctions regime we are discussing.

Madam Deputy Speaker, I am mindful of your stricture that we must not stray from the matters on the Order Paper, but inevitably some Members have been drawn into discussing the broader national issues around the framework law we are discussing. I am sure that the hon. Member for Bishop Auckland (Helen Goodman) will appreciate that it would be inappropriate for me to comment on an individual such as the niece of President Assad.

[Helen Goodman]

rose—

[Sir Alan Duncan]

The hon. Lady seems slightly indignant, and I am happy to give way.

[Helen Goodman]

Well, I am indignant. The convention in the House is surely that anything covered in an explanatory memorandum is reasonable to put to the Minister. I am extremely concerned that the niece of President Assad has been allowed to live and study in this country. Surely if the Minister looks at part 2 of the regulations on the designation of persons, he can see that she is a person who has supported or benefited from the Syrian regime and is a prominent person—she falls into the categories included in the documents, as does the question I raised about Daesh and about the white phosphorus incident in Indonesia. It may be inconvenient for the Minister to answer those questions, but it must surely be in order.

[Sir Alan Duncan]

I am afraid that the hon. Lady’s indignation is wrong on all counts. First, white phosphorus does not fall under the chemical weapons regime as it is a different sort of weapon, nor does Daesh, which falls under other regimes related to al-Qaeda and Daesh. I think it would be highly inappropriate for me to discuss an individual when we are looking at the framework within which the sort of designations the hon. Lady mentions can take place. These regulations put in place the law within which those designations can happen. We are not specifically looking at the designations themselves.

In respect of what we are able to transfer into the framework we are discussing, the sanctions relating to Belarus, for instance, were agreed in 2004. The EU sanctions regime currently imposes asset freezes and travel bans on four Belarus nationals with links to the Belarus Government who were implicated in the disappearance of two opposition politicians, a businessman and a journalist in 1999 and 2000. The hon. Lady also asked about changing the chemical weapons regime. We are mindful of our and others’ obligations under the chemical weapons convention and, through the regulations, we would have the flexibility to change sanctions should it be thought appropriate.

These regulations are necessary to enable the UK to implement our independent sanctions policy within the framework of the Sanctions and Anti-Money Laundering Act 2018 from the moment we leave the EU. Approving the regulations would in no way prevent the development of an autonomous human rights sanctions regime. The sanctions Act enables sanctions to be imposed for a variety of purposes, including responding to or deterring gross violations of human rights, or otherwise promoting compliance with human rights law or to respect human rights.

Sanctions are an integral part of our response to the most important foreign policy challenges we face. We must be ready to deliver sanctions independently as soon as the UK leaves the EU, and that is why these statutory instruments are so important. Transposing EU sanctions regimes in this way puts the UK on a solid footing to continue to protect our interests, defend our values and maintain the position of leadership that we have built on sanctions over so many years. I commend the regulations to the House.

Question put and agreed to.

Resolved,

That the Chemical Weapons (Sanctions) (EU Exit) Regulations 2019 (S.I., 2019, No. 618), which were laid before this House on 22 March, be approved.

Exiting the European Union (Sanctions) (Zimbabwe)

Resolved,

That the Zimbabwe (Sanctions) (EU Exit) Regulations 2019 (S.I., 2019, No. 604), which were laid before this House on 20 March, be approved.—(Sir Alan Duncan.)

Exiting the European Union (Sanctions) (Republic of Belarus)

Resolved,

That the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 (S.I., 2019, No. 600), which were laid before this House on 20 March, be approved.—(Sir Alan Duncan.)

Exiting the European Union (Sanctions) (Syria)

Resolved,

That the Syria (Sanctions) (EU Exit) Regulations 2019 (S.I., 2019, No. 792), which were laid before this House on 5 April, be approved.—(Sir Alan Duncan.)

Intelligence and Security Committee of Parliament

Resolved,

That Ian Blackford be removed from the Intelligence and Security Committee of Parliament under Schedule 1 to the Justice and Security Act 2013 and Stewart Hosie be appointed to that Committee under section 1 of that Act.—(Paul Maynard.)

Exiting the European Union (Sanctions)

Debate between Helen Goodman and Alan Duncan

Tuesday 9th April 2019 Commons Chamber

[Helen Goodman]

I am very grateful to you, Mr Deputy Speaker.

First, why was £80,000-worth of weapons material, which could be used for internal repression, authorised by the Government in 2016-17? That seems to be a breach of the current sanctions regime. [Interruption.] To Venezuela. Secondly, we do not believe that the oil sanctions that have been imposed by the Americans have been helpful in the current situation. This is precisely the point that hon. Members made earlier: the object of the sanctions should be to punish the politicians who are in charge of creating a bad situation and not the whole population.

I also want to ask the Minister about the gold that the Bank of England holds for the central bank of Venezuela. It was reported in November last year, before the Government had recognised Juan Guaidó as the leader of Venezuela, that the Bank of England had frozen 1,125 gold bars. I asked Her Majesty’s Treasury through a written parliamentary question what the legal basis for that was. It told me that it was a matter for the Bank of England, so I wrote to the Governor to ask what the legal basis for the decision was and his response was somewhat opaque. I have read suggestions in the press that the American Government put pressure on the British Government, who leant on the Bank of England directly not to release these gold bars when the bank of Venezuela requested them. I would like to know from the Minister whether that is true.

[Sir Alan Duncan]

I am grateful to the hon. Lady for giving way, because this deserves an immediate answer. The Foreign Office has not at any stage put any such pressure on the Bank of England. Any decision about whether or not to transfer gold that it holds is entirely a matter for the Bank of England, and it does so without political pressure from us.

[Helen Goodman]

I am interested to hear the Minister’s response, because if the Government wish to tighten the sanctions regime, he and the Foreign Office will have the opportunity to do so, and they might well succeed in that. However, what is not acceptable is pursuing a tighter policy without a clear legal base; I suggest that that would not do much for our reputation.

I want to pick up on the point that was made about Iran by the right hon. Member for Wokingham (John Redwood). EU sanctions were introduced in the case of Iran in 2011, in response to violent crackdowns against street protests. In view of the continued serious human rights abuses in Iran—notably, extensive use of the death penalty, including for juveniles; torture; the repression of women and lesbian, gay, bisexual, and transgender activists; and the detention of Nazanin Zaghari-Ratcliffe three years ago and the denial to her of access to medical treatment—we believe that these sanctions are justified. They cover in particular goods and technology used for repression, and we believe that that is right.

However, we believe that the American decision to lift the trade sanctions against Iran, which was taken as part of the international community’s joint comprehensive plan of action—JCPOA—nuclear deal, was also right. Sanctions have been an effective tool and they will continue to be effective if we impose them when things go badly and lift them when things go better. The Trump Administration’s decision to reimpose those trade sanctions and to withdraw from the JCPOA is mistaken. The JCPOA does not cover ballistic missiles or regional aggression—the arguments the Trump Administration put forward for reimposing sanctions. The decision further destabilises the region. That is a problem in foreign policy terms—it is unhelpful.

I would also be interested to know what the Government have done about the impact on European and British businesses and banks. Our businesses and banks are in an extremely difficult situation, whereby trade and investment under European law is completely legal, but under American law is completely illegal. There is an extraterritoriality effect of American law. I therefore have two questions for the Minister. First, will he hold to the current position in a post-Brexit scenario and not shift to the American position? Secondly, what has been, is and will be Government action to support British businesses and banks that wish to trade with and invest in Iran?

Finally, I come to Guinea-Bissau. The European Union imposed sanctions, which cover 20 individuals, in 2012 following an attempted coup. Guinea-Bissau is an extremely poor country with a lot of cocaine trafficked through it. There were some elections in March, and I ask the Minister what the Government are doing to improve governance in Guinea-Bissau. What are they doing to reduce drug trafficking via Guinea-Bissau? Does the Minister anticipate the UN Security Council changing its posture on sanctions?

Oral Answers to Questions

Debate between Helen Goodman and Alan Duncan

Tuesday 26th February 2019 Commons Chamber

[Sir Alan Duncan]

My understanding is that those talks are happening today, so it is not easy for me to comment on something that has not quite yet taken place. However, my skills of foresight are well recognised in this House, as I well appreciate. I hope that these conversations and discussions will lead to a more peaceful world and are as successful as we would wish.

[Helen Goodman (Bishop Auckland) (Lab)]

Yesterday, the International Court of Justice found that the UK’s control of the Chagos islands is illegal and wrong. This damning verdict deals a huge blow to the UK’s global reputation. Will the Government therefore heed the call of the ICJ to hand back the islands to Mauritius, or will they continue to pander to the United States military?

[Sir Alan Duncan]

The hon. Lady is labouring under a serious misapprehension: yesterday’s hearing provided an advisory opinion, not a judgment. We will of course consider the detail of the opinion carefully, but this is a bilateral dispute, and for the General Assembly to seek an advisory opinion by the ICJ was therefore a misuse of powers that sets a dangerous precedent for other bilateral disputes. The defence facilities in the British Indian Ocean Territory help to keep people in Britain and around the world safe, and we will continue to seek a bilateral solution to what is a bilateral dispute with Mauritius.

Rules of the Court of Judicature (Northern Ireland) (Amendment) (EU Exit) 2019 Civil Procedure (Amendment) (EU Exit) Rules 2019

Debate between Helen Goodman and Alan Duncan

Monday 25th February 2019 General Committees

[Sir Alan Duncan]

May I express my deep gratitude to the hon. Gentleman for his learned and well-timed intervention?

[Helen Goodman]

Does the Minister expect that the Government will make a habit of being bailed out by the Opposition?

[Sir Alan Duncan]

No, because at the last count there were not many of them left.

The statutory instruments lay down the procedure for sanctions designation appeals where cases go to court. The vast majority of those cases will be based on open source material, but, as with terrorism legislation, the statutory instruments provide for the closed process to be used where necessary. Most material will be open source, but, given that we are dealing with some pretty dodgy people, information from intelligence sources may have led to the decision to designate someone. Therefore, as with terrorism—the parallels may get quite close—the SIs provide for a closed process that allows that material to be discussed. I say to the hon. Lady and to all other hon. Members that there is nothing sinister about that. It replicates what happens elsewhere. It is tried and tested, and I would argue that it is very straightforward.

The hon. Member for Cardiff South and Penarth asked, “Why not Scotland?” The 2018 Act provides that Scotland will make its own rules of court. That follows the existing precedent in the Counter-Terrorism Act 2008 and the Terrorist Asset-Freezing etc. Act 2010. The Scottish Government have been consulted, and are aware of the need to do that.

The hon. Member for Bishop Auckland asked about special advocates. A special advocate is a specifically appointed lawyer, whose functions are set out under rule 79.19 of the Civil Procedure Rules. Their role is to consider sensitive material and to ensure that the proceedings are fair. They will represent the interests of the designated person.

I was asked whether there are closed proceedings in the EU. There are some similar, but not identical, processes in the EU. Owing to the need to safeguard sensitive member state evidence, those procedures have not been used regularly to date. The use of them for UK sanctions will appropriately safeguard our information.

I hope that I have answered the questions that were raised. The statutory instruments are straightforward. They broadly replicate what happens elsewhere in similar court proceedings, and I urge the Committee to accept them. I commend the rules to the Committee.

Question put and agreed to.

Civil Procedure (amendment) (EU Exit) Rules 2019

Resolved,

That the Committee has considered the Civil Procedure (Amendment) (EU Exit) Rules 2019 (S.I. 2019, No. 147).—(Sir Alan Duncan.)

Venezuela

Debate between Helen Goodman and Alan Duncan

Tuesday 29th January 2019 Westminster Hall

[Sir Alan Duncan]

As the hon. Lady will well appreciate, asylum is a semi-judicial process that is handled by the Home Office. I regret that I am unfamiliar with that case and she did not notify me of it in advance of the debate, so I did not ask the appropriate questions in advance.

In addition to what I have described, the UK stands with Spain, France, Germany and the Netherlands in demanding the announcement of urgent free and fair elections within six days, and in calling for a legitimate Government to be established. We stand with the Organisation of American States and the Lima Group, whose members last September referred the Venezuelan Government to the International Criminal Court for crimes against humanity. We stand shoulder to shoulder with the United States in saying that the National Assembly and its president, Juan Guaidó, are best placed to lead Venezuela to the restoration of its democracy, its economy and its freedom.

[Helen Goodman]

On that point, will the Minister give way?

[Sir Alan Duncan]

I have no more time, I am afraid. I have to leave the hon. Member for Hyndburn a couple of minutes at the end.

Today, we should all stand together against the tyranny of Nicolás Maduro and in support of the legitimate democratic forces in Venezuela. Venezuela can and must recover from the depths of its current despair. To do so, it needs an end to tyranny, an end to corruption and an urgent return to freedom, democracy and the rule of law.

Oral Answers to Questions

Debate between Helen Goodman and Alan Duncan

Tuesday 22nd January 2019 Commons Chamber

[Sir Alan Duncan]

We will stick by the timing, but I think that a lot of work has already been done so that they could perhaps be in place before that date. I am confident that progress is being made as we would wish.

[Helen Goodman (Bishop Auckland) (Lab)]

Over and over again the Government have let the overseas territories off the hook. Now the Government are saying that the territories do not need to have public registers of beneficial ownership until 2023—at a cost, incidentally, of £50 billion to the British taxpayer. The law we passed last May required the Government to act in 2020. Does that not take the Government’s contempt for Parliament to a new low?

[Sir Alan Duncan]

No. I share the hon. Lady’s view that overseas territories with financial centres should meet international standards on tax transparency and anti-money laundering, but most overseas territories are either being evaluated or due to be evaluated by the financial action taskforce and are working to deliver their commitments made to the European Commission to prevent them from being included on the EU’s list of non-co-operative tax jurisdictions.

Draft European Union (Definition Of Treaties) (Association Agreement) (Central America) Order 2018 Draft European Union (Definition Of Treaties) (Political Dialogue And Cooperation Agreement) (Cuba) Order 2018

Debate between Helen Goodman and Alan Duncan

Wednesday 11th July 2018 General Committees

[Helen Goodman]

The right hon. Gentleman is demonstrating what an excellent Foreign Office Minister he was, but I am directing my questions to the current Minister to see who is in charge of steering this through.

[Sir Alan Duncan]

Equally good, I would like to think.

[Helen Goodman]

We will find out whether the Minister is equally good at answering these questions, rather than seeing them deflected via Devon.

A related concern is the human rights of migrants from central America. This agreement contains a commitment to ensure the effective employment, protection and promotion of human rights for all migrants. I am interested to know from the Minister what representations have been made to the American Government with respect to the human rights of migrants from central America.

On the process, the Minister explained that if the association agreements are in force after our departure from the European Union, the United Kingdom will be bound by them during the implementation period. I want to ask him three questions about what happens once the implementation period comes to an end in December 2020, which is quite soon. These documents were drafted six years ago, and that date is only two years ahead of us. After the implementation period, if the association agreements are in place, is it the Minister’s intention to roll them over for what we might call the proper post-Brexit period? If it is not his intention simply to roll them over, what is his plan? What is his plan if they have not been implemented by December 2020?

The impact assessment provided to the Committee for this afternoon is outdated, as it was prepared in 2015. Is the Minister confident that there have been no significant changes in the intervening three years that might affect the assessment of the impact on British businesses? The explanatory memorandum says that the Government have committed to agreeing a transitional arrangement to ensure continuity in trade. Will he produce a new explanatory memorandum with a new impact assessment in 2019, once we have left the EU?

We are extremely pleased that Cuba is making progress in being integrated into the global economy. Again, the Cuba document was drafted and written some time ago. It would be helpful to know from the Minister how the outlook for trade with Cuba and the operation of this agreement are impacted by President Trump’s decision to reinstate restrictions on Americans travelling to Cuba and United States business dealings with Cuba. At the moment we have yet another rift between the policy approach of the European Union and that of the United States. What are the Ministers intentions with respect to continuing dialogue with Cuba alongside our European partners as we move forward?

This is a tricky issue. We have still not heard how the Government intend to co-ordinate common, foreign and security policy with the European Union post Brexit, which is highly relevant to what the rollover arrangements will be for both statutory instruments. It would be extremely welcome if the Minister updated us and gave some insight into that issue.

--- Later in debate ---

[Sir Alan Duncan]

I am grateful to the right hon. and hon. Members who have contributed this afternoon. As I outlined in my opening speech, these agreements will support our values and objectives long after we have left the European Union. By ratifying them, we are demonstrating our good will as a loyal and supportive partner of the European Union and to each of these countries seeking to expand their relations with the EU. These agreements do not detract in any way from our own prospects outside the EU. We are enhancing our co-operation with partners across Latin America as we leave the EU, in line with our ambitious vision to have a global Britain.

In response to the question from the hon. Member for Bishop Auckland about the financial benefits that we hope will ensue from these agreements, a figure of between £700 million and £1.1 billion was quoted. In answer to her question over what period, the trade benefits of the EU-central America association agreement are expected to be realised over a 10-year period. That is the calculation that has been applied, but that means by 2023, following the start of the provisional application of all this in 2013. That is set out in the impact assessment attached to the order. We are working to transfer the agreement to a UK-central America association agreement, which will result in our gaining equivalent benefits once we have left the EU.

I say to my right hon. Friend the Member for East Devon, a former Minister, that Cuba is very important. It is going through a significant transition and is a country with which we wish to develop a close association, to help it to transfer from being the preserve of the Castros into a country that looks more widely across the world and therefore serves the economic interests of its citizens. My right hon. Friend is absolutely right to say that one of the major obstacles to that is the constraint on dollar transactions that is applied to any kind of business in or around the country. That is a problem that we would like to see overcome, because a prosperous Cuba is more likely to be a free and co-operative Cuba. We hope that we can, in a benign way, without being over-didactic or instructive, help Cuba to move from the past into the future in a way that is of benefit to everybody.

As for what we have heard otherwise today, I hope, Sir Henry, that it is not inappropriate for me to point out that we are discussing a pair of very specific orders, rather than having a debate on the current affairs of the region, notwithstanding important issues in Guatemala, Nicaragua and, perhaps more than anywhere else, Venezuela, where many people are fleeing the country, because the President has basically destroyed its economy and people are being forced away for fear of being unable to buy the most basic goods, in a climate of hyper-inflation. This is not a debate about current events; it is a debate about these two orders. The agreements will do things such as enhance political dialogue and further co-operation in areas such as climate change, the environment, counter-narcotics, counter-terrorism, human rights and migration.

In the context of Cuba, which has been raised specifically, five annual dialogues are being established, on human rights, sustainable development, non-proliferation, the illicit trade in arms and unilateral coercive measures. The agreements are a framework within which good can be achieved, rather than a day-to-day narrative, which is more the preserve of the Foreign and Commonwealth Office and our diplomacy.

To conclude, I note that the hon. Member for North East Fife, the Scottish National party spokesperson, is absent. In a parallel Delegated Legislation Committee this morning, in which we considered three similar orders on EU-third country agreements, the SNP Member tried to vote no. When I inquired why, they said that they did so on the grounds that the devolved Administrations had not been consulted. I would like to put it on record that although the UK’s foreign affairs policy is totally a reserved matter, the devolved Administrations were consulted during the preliminary stages of consultation on each of these agreements. All the devolved Administrations confirmed that they did not anticipate any legislative changes as a result of the agreements, and no specific concerns were expressed, so the argument put by the SNP in relation to this morning’s Committee was utterly erroneous, specious and unmerited.

[Helen Goodman]

On the issue of Scotland, I notice that the trade section of the impact assessment for the order relating to central America shows that one of the benefits that will flow to us is that our geographical indications on Scotch whisky will be protected in central American markets. In return, there will be a reduction in the tariffs that they impose on Scotch whisky. I have already asked the Minister how the rollovers will operate, but it is not clear how geographical indications on food and drink will be preserved post Brexit. Will that not be an issue in this context, as well as more widely?

[Sir Alan Duncan]

May I apologise to the hon. Lady? I did not properly answer her point about process, although I meant to. We are content that the orders will come into force within the implementation period, so her concerns will not apply.

I am grateful to the hon. Lady for pointing out the strength of the logic that I have put to the Committee, because what we are proposing will benefit Scotland. It is ironic, not to say illogical and absurd, that the Scottish National party should consider voting against something such as this, when its primary industry of Scotch whisky is likely to benefit. We find that the SNP is anti-Scotch whisky exports and that, had it been here, it would have perhaps voted against these orders, as it tried to this morning, on the grounds that it was not consulted, when it has been. The irony of the SNP position, added to its absence today, will not be lost on either side of the Committee. I thank you again, Sir Henry, for presiding over our proceedings, and I commend the orders to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft European Union (Definition of Treaties) (Association Agreement) (Central America) Order 2018.

draft European Union (Definition of Treaties) (Political Dialogue and Cooperation Agreement) (Cuba) Order 2018

Resolved,

That the Committee has considered the draft European Union (Definition of Treaties) (Political Dialogue and Cooperation Agreement) (Cuba) Order 2018.—(Sir Alan Duncan.)

Oral Answers to Questions

Debate between Helen Goodman and Alan Duncan

Tuesday 26th June 2018 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

President Trump’s recent statement on the oceans did not mention sustainability, stewardship, ecosystems or climate. When he comes to London, will the Government challenge him on that, or do they think that it would, to coin a phrase, achieve absolutely nothing? If it is the latter, what is the point of the visit?

[Sir Alan Duncan]

Should I meet President Trump personally, I will look upwards, look him in the eye, and the first word on my lips will be “oceans”.

Sanctions and Anti-Money Laundering Bill [Lords]

Debate between Helen Goodman and Alan Duncan

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

[Sir Alan Duncan]

No, not for the moment.

We do not want to legislate directly for the overseas territories, nor do we want to risk damaging our long-standing constitutional arrangements, which respect their autonomy. However, we have listened to the strength of feeling in the House on this issue and accept that it is, without a doubt, the majority view of this House that the overseas territories should have public registers ahead of their becoming the international standard, as set by the Financial Action Task Force.

We will accordingly respect the will of the House and not vote against new clause 6. Unless my right hon. Friend the Member for Sutton Coldfield chooses not to press the new clause, we accept that it will become part of the Bill. In the same spirit, I would appreciate it if the hon. Member for Bishop Auckland chose not to press new clause 14, which would add the Crown dependencies to that stipulation.

Her Majesty’s Government are acutely conscious of the sensitivities in the overseas territories and of the response that new clause 6 may provoke. I therefore give the overseas territories the fullest possible assurance that we will work very closely with them in shaping and implementing the Order in Council that the Bill may require. To that end, we will offer the fullest possible legal and logistical support that they might ask of us. Alongside that, we retain our fullest respect for the overseas territories and their constitutional rights, and we will work with them to protect their interests.

[Helen Goodman (Bishop Auckland) (Lab)]

I am pleased to have the opportunity to take part in the debates on Report of this important Bill. I will follow the same order as the Minister in discussing the amendments.

I took the rather unusual step of signing the Government’s Magnitsky amendments, new clause 3 and amendments 10 to 13, so this House can present a united voice to the whole world in expressing our abhorrence for gross human rights abuses and our determination to tackle them together.

I thank the right hon. Member for Newbury (Richard Benyon) and my hon. Friends the Members for Rhondda (Chris Bryant) and for Dudley North (Ian Austin)—the latter is not in the Chamber at the moment—all of whom have campaigned on this issue for a long time. Her Majesty’s Opposition believe that human rights should be at the centre of foreign policy. The only way gross human rights abuses will stop is if those who perpetrate them, order them and facilitate them are brought personally to account. They must pay the price.

Sanctions against individuals for gross human rights abuses were originally conceived as a response to the terrible treatment of Sergei Magnitsky, but we believe there is a wider problem. We note, for example, that the United States has sanctioned Maung Maung Soe, one of the generals responsible for the ethnic cleansing of the Rohingya in Myanmar.

Last year, the Criminal Finances Act 2017 enabled the Government to freeze the assets of people responsible for such crimes, and this Bill will enable us to ban visas and prevent such people traveling here. The only question is why it took so long for the Government to come round to seeing the importance of this measure.

We introduced so-called Magnitsky amendments in Committee that would have given us the same ability as Canada and the United States to implement targeted sanctions. Unfortunately, the Government initially did all they could to reject our amendments. They rejected them in principle on Second Reading; they reordered the consideration of the Bill; they suspended the Committee; and then they downright voted against the amendments. After the Salisbury incident on 4 March, the Prime Minister announced a complete U-turn. We are pleased the Government have seen the light, but it is unfortunate that it took such a tragic event for them to change their mind.

I am pleased to offer the support of Her Majesty’s Opposition to new clause 6, tabled by my right hon. Friend the Member for Barking (Dame Margaret Hodge). I congratulate her on her long campaign, which began when she was Chairman of the Public Accounts Committee. She has stuck with it over many years, and we see in the Minister’s announcement today that the campaign was well worth while. I also congratulate the right hon. Member for Sutton Coldfield (Mr Mitchell) on putting together a fantastic coalition of support for this change.

We believe the time to act has come. In 2014, David Cameron wrote to the British overseas territories recommending that they introduce public registers—the UK introduced a public register in 2016—and new clause 6 sets out a timetable for them to do so by 2020. Money laundering through London is estimated by the National Crime Agency to total £90 billion, and it is facilitated by the secret ownership of companies allowed in tax havens. Unfortunately, the British overseas territories and Crown dependencies are major actors. They enable the corrupt to live in comfort on their ill-gotten gains and facilitate tax avoidance and evasion on a spectacular scale. The UK is estimated to lose £18.5 billion each year. I am only surprised that the Chancellor of the Exchequer did not also sign new clause 6.

The poorest countries in the world are estimated by the United Nations to lose £100 billion a year through these tax havens, which dwarfs any aid flows we supply. That is another reason why new clause 6 is very much to be welcomed.

The scope for hiding large funds facilitates serious international crimes: drug dealing, people trafficking, sanctions busting, illegal arms sales and terrorism. Over and again, the names of the British overseas territories and Crown dependencies come up when these crimes are finally uncovered.

--- Later in debate ---

[Sir Alan Duncan]

Yes, really.

[Helen Goodman]

Surely not!

[Sir Alan Duncan]

I salute them for all their efforts.

On what my hon. Friend the Member for Banbury (Victoria Prentis) said about the overseas territories, I am grateful that, in response to the point of order made by my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), Mr Speaker made it absolutely clear that procedurally the Government’s proposed amendments were in order. The compromise amendment was tabled rather late in the day, but it was not out of order for being late. We fully recognise that the Speaker has the discretion to select or not to select an amendment for debate. We were obviously disappointed that the compromise amendment was not selected, but we respect Mr Speaker’s decision.

[Sir Alan Duncan]

I am very short of time. Does the shadow Minister wish to speak?

[Helen Goodman]

indicated assent.

[Sir Alan Duncan]

She does; I shall therefore not take an intervention so that I can leave a couple of minutes for her.

I thank my right hon. and hon. Friends on the Government Benches who would have supported the compromise amendment. I apologise if I marched them up to the top of the hill only for them to find that the hill had disappeared. I put on record my thanks to all who have helped with the Bill and, indeed, my thanks to the Opposition Front-Bench team for their co-operation on Magnitsky. Out of courtesy and shortness of time, with apologies for leaving her so little of it, I leave the last couple of minutes to the shadow Minister.

Sanctions and Anti-Money Laundering Bill [ Lords ] (Fifth sitting)

Debate between Helen Goodman and Alan Duncan

Tuesday 6th March 2018 Public Bill Committees

[The Economic Secretary to the Treasury (John Glen)]

As the hon. Lady says, clause 44 fulfils a Government commitment made at an earlier stage of the Bill in response to a call for clarity on our intentions for the delivery of a separate anti-corruption policy. My noble Friend Lord Ahmad of Wimbledon committed us to reporting on progress made on our policy to create a register of beneficial owners of overseas entities that own or buy property in the UK or that participate in UK Government procurement. We are committed to the register being operational in 2021.

The clause requires the Secretary of State to publish and lay before Parliament three reports on the progress made towards putting the register in place, each of which will be due after the expiry of a 12-month reporting period. The first and second reports must set out

“the steps that are to be taken in the next reporting period towards putting the register in place, and…an assessment of when the register will be put in place.”

The third

“must include a statement setting out what further steps, if any, are to be taken towards putting the register in place.”

The obligation to report to the House on progress reinforces the commitments on our timetable that the Government have given elsewhere.

Question put and agreed to.

Clause 44 accordingly ordered to stand part of the Bill.

Clause 45

Crown application

Question proposed, That the clause stand part of the Bill.

[The Minister for Europe and the Americas (Sir Alan Duncan)]

Clause 45 allows sanctions regulations under clause 1 and regulations under clause 43 to make provision binding the Crown, but not to make the Crown criminally liable. It also stipulates:

“Nothing in this Act affects Her Majesty in Her private capacity”.

Both are common provisions in law. I commend the clause to the Committee.

Question put and agreed to.

Clause 45 accordingly ordered to stand part of the Bill.

Clause 46 ordered to stand part of the Bill.

Clause 47

Regulations: general

[Helen Goodman]

I beg to move amendment 39, in clause 47, page 34, line 33, leave out paragraph (a).

This amendment would remove paragraph 2(a) from Clause 47, which enables the appropriate Minister to amend, repeal or revoke enactments for regulations under section 1 or 43.

We return to the vexed issue of Henry VIII powers and the Government over-reaching themselves once again. I want to recount for the Committee what happened on this matter in the Lords. Lord Judge moved an amendment to leave out paragraph (a), because he was concerned that it was a Henry VIII provision. Our amendment covers the same issue. Lord Judge said that

“with Clause 44, there is no primary legislation at all...It just says, ‘Let’s give the Minister regulation-making powers for this, that and the other’...This is all being done on the basis of an unknown law, because the Minister has not yet brought the regulations into existence.”

One might say that clauses 47 and 48 are pure Henry VIII powers. They give Ministers the power to change this piece of legislation and other pieces of legislation in perpetuity before the regulations under the clauses have been made. This is perhaps slightly more difficult to understand than the problems with making new criminal offences by regulations, but it is wholly objectionable.

Lord Judge continued:

“In advance of the law being made by regulation, we are giving the Minister power to amend the regulations and to do away with statute. This is in a world where, as we discussed earlier, we already have the Terrorism Act, the Counter-Terrorism and Security Act, the Terrorism Asset-Freezing etc Act and the Proceeds of Crime Act…all of which bear on this Act, and all of which will be susceptible to amendment repeal at the Minister’s behest…the secondary will override the primary; and the Minister is in effect going to replace Parliament”.—[Official Report, House of Lords, 17 January 2018; Vol. 788, c. 718.]

It was not just the Cross-Bench peers who expressed concern about this. Viscount Hailsham, another Lord with a great deal of legal experience, also argued against it. He said:

“It could be used in amending, revoking or repealing existing legislation or to extend classes of offence to which the amended legislation applied. It could be used to increase penalties. It could be used to remove statutory defences. It could be used to amend the definition of criminal intent. Indeed, it could make absolute offences that presently require proof of a specific intent. Because it is an amending power, it could be used to give further powers to the investigating officials or to increase the penalties imposed by the courts.”—[Official Report, House of Lords, 17 January 2018; Vol. 788, c. 719.]

Lord Pannick, as everybody will recall, was the lawyer who ensured that article 50 was brought to Parliament rather than exercised through the royal prerogative, and he is a person with a strong commitment to this House. He argued that this excess of Henry VIII powers could lead to a point where,

“the courts are not prepared to accept them and are showing every sign that they will give them the narrowest possible interpretation because, as a matter of constitutional principle, they are objectionable”.—[Official Report, House of Lords, 17 January 2018; Vol. 788, c. 721.]

The Committee has gone over the argument about the problem with Henry VIII powers before, and we have debated it in the Chamber on the European Union (Withdrawal Bill.) People may begin to find it slightly boring, but we are debating it repeatedly because the Government have stuffed it into the Bill so many times. That is the problem, so we really need to persuade Ministers that it is excessive and we need to demonstrate how much they are going down that path.

Of course Ministers think, “When we write these regulations it will all be absolutely fine, because we are nice chaps. It will all be perfectly okay,” but they need to remember that they might not always be in power. Other Ministers might write regulations, about which the current Ministers might not be quite so enthusiastic. We need to be a lot more cautious. I do not understand why Minsters have structured the Bill in such a way. They should have put into primary legislation the overall structure for making regulations on both sanctions and anti-money laundering. Ministers are in an even weaker position on anti-money laundering than they are on sanctions.

There is a case for saying that individual sanctions must be made swiftly, and therefore having the negative resolution procedure for statutory instruments is common sense. We all understand that. However, I cannot fathom why Ministers have not said to the lawyers, “Can we please structure this so that we have the overall shape of the way these things work and the penalties in primary legislation?”, and Ministers could categorise them. They could say, “We will have a class A, a class B and a class C, and then we will name them quickly,” in the way that we do with drugs when people make new chemical formulae and we have to swiftly designate things. That would have got over the problem.

We started with clause 1(1), which states that Ministers may make sanctions regulations. Here we are, right at the end of the Bill, and the pattern is still the same. We still have the same problem.

[Sir Alan Duncan]

Amendment 39 would remove the power to make certain consequential modifications to existing primary and secondary legislation through regulations made under the Bill. Such power is not unusual. It is worth noting that the Delegated Powers and Regulatory Reform Committee made no comment on the inclusion of the delegated power in its report on the Bill. I recognise that concerns have been expressed—we have just heard them—about the breadth of the regulation-making powers conferred by the Bill. The consequential power is both appropriate and necessary, and I hope I can provide reassurance on that.

The power can be used only to make consequential provisions. It also enables other provisions that are supplemental, incidental or transitional, or that make savings to the sanctions or money-laundering regulations. It is important to note that it does not confer the power to make any changes to legislation that are independent of the sanctions and money-laundering power. For example, the power can be used to repeal frozen EU legislation saved by the European Union (Withdrawal) Bill, so when we use the powers in the Bill to replace a sanctions regime in frozen EU law with one in a statutory instrument, the power will enable the frozen EU law to be repealed even if all that has happened in practice is that the sanctions have been relabelled. Without the power we would be unable to do so without another Act of Parliament. I am sure hon. Members agree that that would not be a good use of parliamentary time and that it would be impractical.

The power simply provides a tool to make changes to ensure that the statute book works as a result of sanctions being imposed or anti-money laundering regulations created. It does not give the Government the ability to change swathes of legislation without regard to the purposes of sanctions and anti-money laundering.

I want to reassure hon. Members that any regulations made that use the power to amend, revoke or repeal any primary legislation would be required to use the draft affirmative procedure. That means both Houses would need to give their consent before the changes would come into effect, and it is fully in line with the standing advice of the Delegated Powers and Regulatory Reform Committee about the appropriate parliamentary procedure for such powers.

In other words, we know what these laws will be. They will be sanctions and anti-money laundering regimes of the types set out in the Bill and for the purposes listed in it. I hope that I have been clear that this power is appropriately limited to what is necessary, and that on that basis the hon. Lady will withdraw the amendment.

[Helen Goodman]

The Minister said that this power to amend primary legislation through regulations will apply only to sanctions and anti-money laundering; however, he did not and could not say, because it would not be true, that that will mean amendments only to this Bill. That is because sanctions and anti-money laundering offences are already covered by other pieces of legislation on the statute book. This will not be the one Act that says everything anybody ever dared to ask about sanctions and anti-money laundering. This is part of a large carpet, and it has been woven in, I feel, in a most unsatisfactory way. The principle is broken when Ministers take the power to make regulations that may amend primary legislation.

[Sir Alan Duncan]

May I point out that if there is an amendment to another Bill, it is because those offences would become out of date, and therefore these are consequential?

--- Later in debate ---

[Sir Alan Duncan]

The hon. Lady’s fears are utterly unfounded. I do not think there are any such examples. These are reserved matters, so changes are for this Parliament. The question of overriding the devolution settlement simply does not apply to this clause or to the Bill.

Question put and agreed to.

Clause 47, as amended, accordingly ordered to stand part of the Bill.

Clause 48

Parliamentary procedure for regulations

[Helen Goodman]

I beg to move amendment 40, in clause 48, page 36, line 1, leave out paragraph (d).

[Helen Goodman]

The clause relates to parliamentary procedure for regulations. Amendment 40 distinguishes between regulations relating to anti-money laundering and those relating solely to sanctions. As I have said in relation to other amendments and clauses, there is a question of whether it is appropriate, in the case of anti-money laundering measures, to use the swift regulatory approach, which does not give either House the opportunity to make changes to the regulations. Although it is proposed that the affirmative procedure be used at this point in the Bill, that does not give us the opportunity to amend. We feel that the Government have not made their case for going down this path. We think it would be better to use the super-affirmative procedure as a bare minimum. There was cross-party consensus on that in the Lords—it was not complete, obviously, which is why the proposal is still in the Bill.

New clause 7 would enable us to create a new Committee of the House. One of the problems with what the Government are doing in the Bill is that they are reducing the amount of scrutiny of regulations on sanctions. We have discussed that issue before. For UN sanctions, the same process—Delegated Legislation Committees and the negative resolution procedure—will be followed, but at the moment EU sanctions go to the European Scrutiny Committee and there is a scrutiny reserve. We will lose that part of the machinery. With this new clause, we seek not simply to replace but to enhance and strengthen that piece of the machinery.

In the European Union (Withdrawal) Bill, we agreed that there should be a sifting Committee of the House, which will decide, for any piece of delegated legislation, whether it is appropriate to use the negative procedure or the affirmative procedure. For sanctions, we all agree that we sometimes have to act quickly and use the negative procedure, so the affirmative procedure clearly would not be appropriate.

I am concerned about the use of Delegated Legislation Committees. I am sure that every member of the Committee will agree that they are the lowest form of parliamentary life; they are the weakest form of parliamentary scrutiny. They are pulled together, people often do not turn up to them, people do not read the papers and the papers are not given to the Opposition Front Bench spokesperson more than two days before. Again, there is no possibility of amending the substance of the measures being considered. Because every single Delegated Legislation Committee is a new Committee, no expertise is built up; there is no institutional memory.

One of the things that we kept being told during the referendum campaign was that we were going to take back control and have parliamentary sovereignty. Accepting the amendment would be a way of strengthening Parliament. It would provide a way for Parliament to structure things, to build up some expertise in this important policy area, to learn from experience and to bring the experience of one situation to the next situation.

It would also be sensible, obviously, for the new Committee to be the Committee that looks at the reviews that the Government have agreed to prepare annually for the House under clause 27. I take the Committee back to clause 27, which sets out that annual reviews will be carried out to consider the effectiveness of sanctions.

At the moment, there is not really a Select Committee that has an overarching view of sanctions policy. There is no Select Committee in this House that examines sanctions policy on a regular basis. That is partly because—

[Sir Alan Duncan]

There is the European Scrutiny Committee, which looks at every single sanction and every piece of legislation coming from the EU. There is a formalised procedure for that sort of thing.

[Helen Goodman]

First, we are going to lose that Committee under what Ministers are proposing. Secondly, the European Scrutiny Committee is not a Select Committee. Thirdly, that Committee does not look at the UN-based sanctions, which, as the Minister knows, make up half the sanctions we impose.

Sanctions encompass many things: foreign policy objectives, which is why the Minister for Europe and the Americas is leading for the Government on this Bill; financial measures, which is why we have a Treasury Minister on the Committee; trade measures; and travel bans. Because of that, many Departments are involved with sanctions and therefore many Select Committees have an interest in them, but at the moment we do not have a regular review of sanctions policy by everybody.

It might be possible to set up such a scrutiny Committee on a similar basis to the Committees on Arms Export Controls, which have people from a number of different Select Committees bringing their different expertise to a subject. However, I thought that that would be rather too complex and, in any case, it would not be something that one would legislate for in a Bill; it would be a matter for the Standing Orders of the House.

What we would do is to agree that we wanted to improve scrutiny—that is what the whole Brexit thing is all about—and improve the standing and the role of the House. Then, we could consider the detail as to whether we wanted the Committee to be free-standing or a sub-committee of other Committees when we came to amend the Standing Orders of the House.

Both the amendment and the new clause are designed to strengthen Parliament, to strengthen parliamentary sovereignty and to bring back control.

[Sir Alan Duncan]

Before I speak to the two amendments in this group, perhaps it would be helpful if I restated the Government’s case for the approach we are taking—the parliamentary procedures for secondary legislation under this Bill.

The Government recognise that it is important that Parliament scrutinises the use of sanctions and that this Bill allows for such scrutiny. A set of regulations dealing with UN sanctions regimes will be made under the negative procedure. Once sanctions are agreed at the UN Security Council, the UK has an obligation to implement them under the UN Charter. Not doing so would leave the UK in breach of international law.

A set of regulations that do not deal with UN sanctions regimes will be made under the made affirmative procedure. That will allow regimes to come into force immediately, while still allowing Parliament to debate the regulations. That will negate the risk that, before any restrictions take effect, assets are removed, individuals leave or enter the UK, or arms or other prohibited goods are exported to countries that they should not be. It negates that risk.

[Helen Goodman]

I do not think the Minister or the officials have understood what the new clause aims to do. It would not change the process or whether the negative, made affirmative or draft affirmative procedure was used for a statutory instrument; it would change the group of people who looked at it, so that we build up some expertise on the matter among parliamentarians across the House.

[Sir Alan Duncan]

Let me come to the detail of the amendments in a second. I am just outlining the principles behind the Bill and its context.

At present, anti-money laundering regulations are transposed into UK law through the negative procedure in section 2(2) of the European Communities Act 1972. Under the Bill, the vast majority of anti-money laundering regulations will be made using draft affirmative procedures, so parliamentary scrutiny will be increased in that regard. Both the Delegated Powers and Regulatory Reform Committee and the Constitution Committee accepted in their reports on the Bill that the use of delegated powers for sanctions is appropriate. The DPRRC thought that it is

“appropriate for this mechanism to operate through the exercise of delegated powers”.

The Constitution Committee confirmed that and thought that,

“In practice, a delegated powers model is inevitable, given the practical difficulties that would arise if Parliament had to legislate to create and amend individual sanctions regimes.”

Amendment 40 would delete subsection (5)(d) and so remove the reference to regulations made under clause 43 being made under the draft affirmative procedure, in all but narrowly defined circumstances. The effect of that—which I assume is not hon. Members’ intention—would be to reduce parliamentary scrutiny over future money-laundering regulations after the UK ceases to be a member of the EU.

Money-laundering regulations, most recently those that came into force last year, are typically made through the negative procedure. They do not usually require a debate or vote in this House or the other place before coming into force. To enhance scrutiny after the UK ceases to be a member of the EU, subsection (5)(d) provides that substantive changes to money-laundering regulations made under the Bill will be made through the draft affirmative procedure. That will require all such regulations to be debated and voted on by Parliament before coming into force.

The only exception is when the UK is updating the list of high-risk jurisdictions in connection with which enhanced due diligence measures are required. Changes to the list will be made via the made affirmative procedure, as set out in subsections (2) and (3). Again, that will enhance parliamentary scrutiny. Changes to the list are currently made at EU level. If accepted, the amendment would require most regulations under clause 43 instead to be made under the negative procedure, as is provided for clause 48(6). That would weaken parliamentary scrutiny under the Bill as drafted.

New clause 7 would require secondary legislation introduced under subsection (5) to receive the approval of a new House of Commons Committee before being laid before Parliament. I do not think that is necessary, because the new clause would apply to all regulations made using the draft affirmative procedure. Such regulations will be scrutinised directly by Parliament when they are made, as both Houses would need to give consent before they could come into force, thereby negating the need for a scrutiny Committee to look at any of them first.

Were parliamentarians to object, they could reject the regulations. That would force the Government to lay a new instrument, taking into account any concerns that had been expressed. The EU withdrawal Bill is an exception because of the very large volume of statutory instruments that will need to be passed under it in a very short space of time, ahead of the day the UK leaves the EU. That is why a Committee with such a sifting function is appropriate for the powers in that Bill. The same does not apply to the powers mentioned in the new clause. There will not be nearly as much secondary legislation to pass via the draft affirmative procedure. Given that, and together with the points I made on amendment 40, I ask the hon. Lady to withdraw her amendment.

[Helen Goodman]

I am grateful to the Minister for that explanation. Of course, improvements were made to the Bill in the other place in response to criticisms, and some processes were upgraded from the negative procedure in the original draft to the affirmative procedure in the Bill before the Committee. I do not wish to press amendment 40, but we will wish to press new clause 7 to the vote. I shall explain why, even though we are going to vote on it. First, it is for this House to decide on our processes. We would not dream of telling the other House how to run its affairs. What the Delegated Powers and Regulatory Reform Committee or Constitution Committee in the House of Lords say does not cover procedures in this House. They are our responsibility. The Minister said there would be far fewer statutory instruments under this Bill, but he has given us no estimate. Does he have any sense of the number of statutory instruments that might come forward? Perhaps he will benefit from inspiration before I sit down, so that he can intervene and tell me what he expects.

[Sir Alan Duncan]

Our estimate of the regimes that will have to be transferred at the moment is in the region of 33.

[Helen Goodman]

Thirty-three whole regimes is quite a chunky number, is it not? That is not 33 individuals; it is 33 regimes. Of course, I was extremely concerned about the way that the EU withdrawal Bill looked, as were many Members. However, in one respect the problem is greater in this Bill. This is a Bill with permanent powers; the EU withdrawal Bill is one with temporary powers. Therefore, when we come to the right moment, we will wish to put new clause 7 to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Helen Goodman]

Clause 54 defines the territorial extent of the Bill. I did not include an explanatory statement for amendments 41 to 44 because I thought their effect so obvious that it did not need further explanation.

In the sanctions part of the Bill, at the moment, Ministers may, by Order in Council, provide for any of the provisions to the Channel Islands, the Isle of Man and the British overseas territories, whereas the amendment would require an Order in Council to extend the provisions to the Channel Islands, the Isle of Man and any of the British overseas territories. We are obviously making the distinction that the Minister made earlier between Her Majesty in her personal role and Her Majesty as the Crown, which is the representative of the Executive. We think that it is appropriate to extend the sanctions part of the legislation in this way.

I am sure that Ministers have looked at the draft EU withdrawal document produced by the EU Commission last week, but in case not every member of the Committee has done so, I would like to draw their attention to article 3 on territorial scope:

“1. Unless otherwise provided in this Agreement or in Union law made applicable by this Agreement, any reference in this Agreement to the United Kingdom or its territory, shall be understood as referring to:

(a) the United Kingdom;

(b) the Channel Islands, the Isle of Man, Gibraltar and the Sovereign Base Areas of Akrotiri and Dhekelia in Cyprus to the extent that Union law was applicable to them before the date of entry into force of this Agreement;

(c) the overseas countries and territories listed in Annex II to the TFEU having special relations with the United Kingdom, where the provisions of this Agreement relate to the special arrangements for the association of the overseas countries and territories with the Union.

2. Unless otherwise provided in this Agreement or in Union law made applicable by this Agreement, any reference in this Agreement to Member States, or their territory, shall be understood as covering the territories of the Member States to which the Treaties apply as provided in Article 355 TFEU.”

Then there is a footnote to list the overseas countries and territories that have that special relation with the United Kingdom:

“Anguilla, Cayman Islands, Falkland Islands, South Georgia and the South Sandwich Islands, Montserrat, Pitcairn, Saint Helena and Dependencies, British Antarctic Territory, British Indian Ocean Territory, Turks and Caicos Islands, British Virgin Islands and Bermuda.”

This Bill is a Brexit Bill. We are trying to have new provisions that apply to the United Kingdom post-Brexit. It is absolutely clear that when we leave, the Channel Islands, the Isle of Man, Gibraltar and all the overseas territories will also be affected as set out in that draft agreement. Many things in the Commission’s draft were controversial and were challenged and questioned, but the territorial extent was not one of them. It seems reasonable to enable us to move from a situation where Union law applies in the existing way to the Crown dependencies and the overseas territories, and not to set up a situation where we have great big loopholes.

This raises a question for Ministers. At the moment, European law applies to the United Kingdom, the Channel Islands, the Isle of Man and Gibraltar. There is still a question mark over Ministers’ intentions with respect to the fifth anti-money laundering directive. Although my amendment applies to the sanctions part of the Bill, it raises the question of whether Ministers plan to accept the contents of the fifth anti-money laundering directive. The UK is ahead in some respects, but not in all, and clearly the Crown dependencies and the overseas territories are not ahead. I wish to tease that matter out with this series of amendments.

[Sir Alan Duncan]

I suppose the overarching point is that Brexit will change the UK’s relationship with the EU; it is not designed to change the UK’s relationship with its overseas territories and Crown dependencies. The starting point is that EU law applies to a certain extent to Crown dependencies and overseas territories, but not entirely. Currently, overseas territories are not bound to apply EU sanctions, but choose to do so to ensure alignment with the UK’s foreign policy.

Let me explain that in more detail. As I said last Tuesday, the UK is responsible for the foreign affairs and security of the Crown dependencies and overseas territories. That is the constitutional position. However, another important constitutional point is that our long-standing practice is that we do not generally legislate for these jurisdictions without their consent, except in exceptional circumstances. Sanctions are tools of foreign policy, or are used to protect our national security. We have been clear that the overseas territories and Crown dependencies must follow the UK Government’s foreign policy, including the sanctions that we apply.

Currently, there are two ways in which sanctions are implemented by the overseas territories and Crown dependencies. The UK legislates directly for the majority of these jurisdictions, with their consent, through Orders in Council. Other jurisdictions choose to legislate for themselves, but they follow precisely the sanctions implemented in the UK. That model is well established, and respects the rights of the jurisdictions. The Bill is drafted in a way that reflects that reality. It is consistent with the current implementation model for UN and EU sanctions, as well as measures under the Terrorist Asset-Freezing (Temporary Provisions) Act 2010. It allows those jurisdictions that choose to follow UK sanctions through their own legislation to continue to do so. It also allows the UK to legislate directly for certain overseas territories, where they choose.

I do not see the Bill as the right place to change those long-standing constitutional arrangements, nor do I see a compelling case for doing so at all. I am sure that hon. Members would not wish to jeopardise the achievements that friendly co-operation with these jurisdictions has already made, nor would they seek to disenfranchise those territories that have chosen to legislate for themselves. On that basis, I urge the hon. Member for Bishop Auckland to withdraw her amendment.

[Helen Goodman]

The Minister has set out the position in principle; he has not given any examples. Let me put it like this: if they always do what we want them to, why do we not just have an automatic system? What is the value of the divergence? That is the obvious rejoinder, but I feel that perhaps this is not the right way, and the right place, to deal with this matter, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 54 ordered to stand part of the Bill.

Clause 55

Commencement

--- Later in debate ---

[Helen Goodman]

I asked the Minister about commencement last week and he did not have a clear answer. I hope he has had time over the weekend to think about the issue and can now explain the Government’s plan to us. While it is perfectly acceptable, normal and understandable, when dealing with some real technicality, to rely on officials, commencement is something for which Ministers themselves are responsible—how the Bill’s commencement provisions will interrelate with our withdrawal from the European Union, and whether the intention is to implement the sanctions on 1 April 2019, to wait until 1 January 2020—the projected end of the transition period—or to implement them at some other time.

I am concerned that, in looking at the Bill, thinking about what they wanted to do, and considering how this interrelates with everything else in EU withdrawal, Ministers did not seem to have a clear plan—last week, at any rate. They do not appear to have thought through what they are trying to achieve with these negotiations. It is all very well to say, “It’ll all come out in the wash and we’ll find out in the end,” but that puts us very much in the position of being recipients of whatever the European Union, from on high, prefers to give. I would have thought that Ministers would have an objective, and how they wanted it to happen. We need more clarity from the Minister, not on subsection (1) which covers sections 44 to 56, but on the earlier parts of the Bill. What is his plan?

[Sir Alan Duncan]

This clause sets out when the Act will commence. It is not part of the negotiations we are currently having with the EU, which are, of course, still a matter of negotiation. I urge the hon. Member for Bishop Auckland to appreciate that what we debating here is the detail of this particular Bill.

Clauses 45 to 49 and 51 to 56 will come into force on the day on which the Bill becomes an Act of Parliament. Those clauses make up part 3 of the Bill, dealing with supplementary provisions, definitions and final provisions, with the exception of clause 50 which deals with consequential amendments and repeals. The remaining clauses will come into force on a day appointed by the Secretary of State, who may allow for clauses to commence on different days. That will enable the Secretary of State to commence the other clauses when required. With that flexibility—which I hope the hon. Lady appreciates— I urge that clause 55 stand part of the Bill.

[Helen Goodman]

The Minister has not given us a plan; he has not said how he sees this panning out, and he has not even made it clear whether the Secretary of State will implement chapters 1 to 5 on the same day, or on multiple days. I think we need to test the view of the Committee.

Question put, That the clause stand part of the Bill.

--- Later in debate ---

[Helen Goodman]

Yes, indeed. Our authorities can ask the BVI registry to check what is going on, which I understand has been quite helpful. However, unlike our register, the BVI registry is not public, which means that our authorities are not allowed to go on fishing expeditions; they need a reason to ask for information. The problem is that they cannot see the full pattern of ownership. That can make it very difficult to work out what is going on, because people involved in money laundering set up extremely complex structures and relationships. In other areas of organised crime, the NCA maps nodal interconnections, which helps it to find criminals, but a secret register makes that impossible.

Another relevant point is which EU list people are on—whether they are on the greylist, or whether they are not on the list, for lacking transparency. The BVI were given more time in order not to be on the greylist.

The situation in the Cayman Islands is similar. We have an exchange of beneficial ownership information—a central register—but it is done in secret. They are on the European Union’s greylist. The Turks and Caicos have a private register. Like the British Virgin Islands, they were given more time by the European Union because they were affected by the hurricanes. Bermuda has a private register and is on the European Union greylist. The legislation is in place for Montserrat, but no register has been set up. Mind you, Montserrat does not have any particular financial expertise, so it does not matter very much.

[Sir Alan Duncan]

The hon. Lady is trying to paint a picture of the OTs and we all understand what she is trying to do. She said a moment ago that progress in the Crown dependencies and Overseas Territories was “extremely limited”. However, I think it is undeniable—and I would ask her to confirm that she admits this—that progress in these areas is steps ahead of all the other G20 countries, except the UK. Can she put it on the record that she admits that that is the case?

[Helen Goodman]

I was going to come to that point at the end, because I anticipated that that was an argument. If the Minister will be a little patient, I will stick to the structure of my speech. In the case of Gibraltar, we have exchange of beneficial ownership information. Gibraltar is in a different situation because it is subject to European legislation. In Anguilla, we have exchange of beneficial ownership information. Like the BVI, it was given more time due to the hurricanes.

In the case of Jersey, Guernsey and the Isle of Man, there is exchange of beneficial ownership information legislation in place, but all three are, unfortunately, on the greylist. This is obviously a matter of regret and it is also extremely damaging to our reputation.

[Sir Alan Duncan]

It is very important that some of the basic facts are established as either true or false, and I hope the hon. Lady will not object to my pointing out another thing that she has got wrong. She spoke about the greylist. There is no greylist. The EU Council conclusions, which I could explain at length, set out the jurisdictions that have been cleared. She is wrong on the greylist in the way she explained it earlier.

[Helen Goodman]

I am interested that that is the Minister’s perception, but I think there might be a competing perception.

--- Later in debate ---

[Helen Goodman]

I am grateful to the Minister for that interpretation. I will come now to the counter-arguments. The first is the one the Minister put to me a few minutes ago, that the overseas territories are ahead of others and we should not focus on them.

The problem with that argument is twofold. First, everybody else will catch up soon: there is the EU anti-money-laundering directive, and other countries across the world are introducing public registers. Secondly, we are responsible for what happens, to some extent, and we can influence it. We can make a change if we want to. I will end by asking why Ministers are not making a change. Furthermore, these secret jurisdictions are the most used: the BVI was by far the most popular tax haven in the Panama papers and Bermuda ranked as number one on Oxfam’s list of worst corporate tax havens. So we are talking not about obscure little operations, but about the centre of this financial secrecy problem.

The next counter-argument is that we should wait until public registers of beneficial ownership become a global standard, and then expect swift change. I will not be able to speak as eloquently as the right hon. Member for Arundel and South Downs (Nick Herbert) did on Second Reading, but he put the kibosh on that argument very effectively. We do not say about other crime or problems that we are not going to deal with that thief over there until we have caught this one somewhere else. That is not a sensible way to run policy. The fact is that the UK is at the centre of this problem. Post-Brexit we could do so much to regain leadership on anti-corruption.

The third counter-argument is that the overseas territories’ economies are heavily reliant on financial services. There are a number of things to say about that, but first being that, were we to have more tax revenues, we would be able to support the overseas territories better in trying to shift their economies from where they are now to where we would like them to be. Examples of alternatives include tourism and the geothermal resources in Montserrat. There are a number of ways in which we could support a better and more balanced development of their economies.

Another reason is that, in the long run, people want to use financial services in jurisdictions that are trustworthy, have a high reputation and where the rule of law is enforced. The rule of law is one reason why London is such a successful financial services centre. Some of the overseas territories’ activities—for example, the insurance market—are perfectly legitimate and reasonable, and they can get an income from that. Leaders of large businesses are now calling for that, including at HSBC—notorious for its involvement in the Mexico problem.

We then have the argument that trying to intervene in the overseas territories is neo-colonialist. I think that is a problem of missing the wood for the trees, given that it cannot be neo-colonialist to want to ensure that African countries are not ripped off and lose their tax revenues and the value of their assets. That is not neo-colonialist; it is supportive of their development. That is why, for examples, the South Africans were very pleased with the information they got from the Panama papers, and they used it.

The next argument is that public beneficial ownership registers degrade the quality of information available to law enforcement. I am puzzled by that argument, as that does not seem to be the case, given that the more people are scrutinising something, the more likely it is that the quality of information will be improved.

Another argument is that such a policy threatens the privacy and security of people using the secrecy jurisdictions. There are two things to say about that: first, we seem to be extremely worried about the privacy and security of a very small number of rich people, but not at all worried about the massive and violent crimes inflicted on people who are suffering from human trafficking, drugs gangs or other kinds of violence. Even if we say that we need to address that, though, it is adequately addressed in the British regime; and we are suggesting that they run a similar publication regime. An analysis commissioned by the Government found that the UK register would actually save our law enforcement authorities £30 million a year; so I think that that argument is also extremely weak.

When David Cameron was in power we were making progress on this. I do not know what has changed or why this Government seem to be in a different place. Perhaps it is because there are too many people influencing the Government who keep their money in these offshore havens. For example, the hon. Member for North East Somerset (Mr Rees-Mogg) was referred to in the Paradise papers because of a $680,000 payment he received when the BVI-based investment firm he worked for was bought by a Canadian bank. Everybody knows that the hon. Gentleman is extremely rich and his finances are complex, but his stake in Somerset Capital is managed by subsidiaries in the tax havens of the Cayman Islands and Singapore. Or are we seeking to protect the interests of Philip May, who works for an investment management firm—

[Sir Alan Duncan]

On a point of order, Mr McCabe, I think these ad hominem attacks are highly inappropriate for this stage of the Committee, or indeed any stage in our Parliamentary proceedings.

[The Chair]

That is not strictly speaking a point of order. Perhaps we can stick with the detail of the new clause, though.

[Helen Goodman]

I know what the rules of the House are and I wrote to the hon. Member for North East Somerset yesterday, telling him I would be mentioning him in the Committee today. However, the rules and courtesies of the House do not apply to people who are not Members of the House. It is perfectly reasonable to tell the Committee that Philip May works for an investment management firm, Capital Group, which reportedly used offshore-registered funds to make investments in a Bermuda registered company.

[Sir Alan Duncan]

So what?

Sanctions and Anti-Money Laundering Bill [ Lords ] (Sixth sitting)

Debate between Helen Goodman and Alan Duncan

Tuesday 6th March 2018 Public Bill Committees

[Sir Alan Duncan]

I am not directly involved in this, but as I have said frequently, I am very happy to offer the expertise of officials to the hon. Lady so that she can fully get to grips with the intricate detail of the question she has asked.

Hon. Members will recall that the Criminal Finances Act 2017 provides for a review of the effectiveness of the bilateral arrangements. That report must be prepared before 1 July 2019, and it will then be published and laid before Parliament. The reviews will provide a clear understanding of how the jurisdictions are meeting their commitments. At that point, we will be in a better position to consider what more might need to be done. I stress once again that we will engage with the overseas territories and dependencies; we do so already and we will continue to do so on a regular basis, with the clear objectives in mind of wanting consistent and constant improvements in the way in which their finances are organised.

A key feature of the Government’s approach has been to maintain a level playing field between all the overseas territories with financial centres and the Crown dependencies. As I have described, we have robust review processes regarding the implementation of these arrangements. If these reviews demonstrate that the full implementation of the exchanges of notes is not taking place in any individual jurisdiction, it would be right for hon. Members to consider this issue further. For the time being, however, we should continue to focus on the full implementation of the existing bilateral arrangements. We are on a good and solid track; therefore, I urge hon. Members to withdraw the new clause.

[Helen Goodman]

It is nice to see you in the Chair, Dame Cheryl. I wish to remind members of the Committee of two things: first, the Government’s own statement in 2012 that, as a matter of constitutional law, the British Parliament can legislate for Crown dependencies and overseas territories. Secondly, the current approach, where the authorities in London have to ask individual questions, is not as effective in tracking down and deterring illegality as having a transparent approach. That was demonstrated by the fact that, when the Panama and Paradise papers were leaked, they were able to initiate more inquiries and take more action against people because, as I was trying to explain this morning, they were able to see the overall pattern.

I am disappointed in the Minister’s response—not surprised, but disappointed—because he has not shown any flexibility at all. However, I do not wish to put the hon. Member for Ochil and South Perthshire on the spot. I think we will come back to this on Report, so I do not wish to put the motion to a vote. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 2

Public register of beneficial ownership of UK property by companies and other legal entities registered outside the UK

“(1) In addition to the provisions made under paragraph 6 of Schedule 2, for the purpose of preventing money laundering in the UK property market and public procurement, the Secretary of State must create a public register of beneficial ownership information for companies and other legal entities registered outside of the UK that own or buy UK property, or bid for UK government contracts.

(2) The register must be implemented within 12 months of the day on which this Act is passed.”.—(Helen Goodman.)

This new clause would require the Secretary of State to create a public register of beneficial ownership information for companies and other legal entities registered outside of the UK that own or buy UK property, or bid for UK government contracts, within 12 months.

Brought up, and read the First time.

[Helen Goodman]

I beg to move, That the clause be read a Second time.

In 2015, David Cameron said:

“London is not a place to stash your dodgy cash.”

That is why he wanted to set up a register of the real owners of UK property owned by companies registered overseas. Unfortunately, the timetable for that has slipped. Following his announcement in 2015, the Government made an announcement shortly before Christmas saying that they now expected to set up the register in 2021. That is six years. In the other place, it was Tory peers who pressed for this to be speeded up. Our new clause does precisely the same thing.

Last week, the right hon. Member for Newbury mentioned unexplained wealth orders. Indeed, the Security Minister got an excellent splash on the implantation of this part of David Cameron’s package on 3 February. It was headed:

“Russians in Britain told to reveal their riches. McMafia-style crackdown on ‘corrupt’ oligarchs.”

It said:

“The government estimates that about £90 billion of illegal cash is laundered in Britain every year.”

The Minister said:

“McMafia is one of those things where you realise that fact is ahead of fiction…It’s a really good portrayal of sharp-suited wealthy individuals, but follow the money and it ends up with a young girl getting trafficked for sex.

What we know from the Laundromat exposé is that certainly there have been links to the [Russian] state. The government’s view is that we know what they are up to and we are not going to let it happen any more.”

He then explained that unexplained wealth orders were coming into effect.

I cannot understand why, given that those orders are coming into effect, a start has not been made on one with the purchase from the Ministry of Defence of Brompton Road tube station by a Ukrainian gas magnate. For colleagues who have not been following this long-running issue, Dmytro Firtash is a friend of ex-President Yanukovych and an associate of both President Putin and Paul Manafort. He was arrested in Vienna on corruption charges at the request of the FBI. Latterly, attempts have been made to extradite him to the United States, first on Magnitsky charges and later in relation to his alleged role in masterminding an international racket that aimed to sell titanium to Boeing.

Like all rich people, he operates indirectly. For example, his foundation, New Century Media, paid for the £800 ticket to a summer ball for the Minister here today—the right hon. Member for Rutland and Melton—according to the Minister’s entry in the Register of Members’ Financial Interests from 2010. He also gave £85,000 to the Conservative party centrally. I would have thought that he was a prime candidate to receive an unexplained wealth order, and I hope that Ministers will see if that can be pursued.

[Sir Alan Duncan]

Is the hon. Lady saying that New Century Media is owned by Mr Firtash?

[Helen Goodman]

Yes.

[Sir Alan Duncan]

It is owned by David Burnside—a former Member.

[Helen Goodman]

I think Mr Burnside is employed by Mr Firtash. That is the issue. These things are not exactly transparent.

Let us return to the question of whether the current state of the law is adequate. The Times also had a leading article which said:

“Three difficulties may blunt the effectiveness of the wealth orders. First, all the agencies involved in investigating and prosecuting those suspected of laundering dirty money in Britain are already over-stretched. They need experienced staff used to digging through multiple layers of shell companies and intricate business transactions, and they do not have enough of them.

Second, the orders freeze assets for an interim period and are only one early step in the process of bringing oligarchs to heel. The government has to be braced for legal marathons contested by the rich and corrupt. That requires political will.

Above all, the red carpet for crooks has to be rolled up. Too many people in the City of London, in the divorce and libel courts, in the art world and in high-end estate agencies have failed to look closely at the cash coming their way. An overdue step would be a public register revealing the true owners of overseas companies that own property in Britain.”

Until we have the public register, it is not going to be possible to identify who owns the properties and whether the wealth invested in them has been gained legitimately or illegitimately. In other words, are the wealth orders explained or unexplained? I am not quoting the Morning Star or the Daily Mirror—I am quoting The Times.

We think that this is all taking too long; it is a problem that it is taking too long. It is a problem because of its size, which I will describe. It is also a problem because Ministers are giving time to people to rearrange their affairs and to reorganise them in order to avoid the measures which are in train. A concrete example of that would be the use of trusts. That is why further we have tabled a new clause on trusts.

Global Witness and Transparency International believe that 86,397 properties in England and Wales are owned by companies registered in offshore secrecy jurisdictions; 87% of properties owned by foreign companies have owners in secret jurisdictions. Half of them are in London and half are in other parts of the country. The 10 most expensive properties owned by companies in tax havens are worth £1.5 billion. Furthermore, Transparency International believes that there are suspicions about £4.4 billion-worth of UK properties, over half of which—£2.36 billion—belongs to companies registered in the British Virgin Islands. They also say that these properties in secret jurisdictions account for 75% of all UK properties under investigation for corruption. If hon. Members or members of the public are interested in seeing what is going on, I recommend going to the Global Witness website where they can type in their postcode and see how many of those secretly owned properties with overseas owners are located on a map.

--- Later in debate ---

[Helen Goodman]

I beg to move, That the clause be read a Second time.

We now move to a slightly different aspect of the Bill—how decisions will be taken once we leave the European Union. The new clause would require that in negotiations with our European partners, we seek to maintain participation in the Political and Security Committee of the European Union, to align sanctions policy with the European Union, and would require the Government to report on those negotiations and on how they are going. As with the commencement plan, which I felt the Minister was vague and unclear about, so with this. How are we going to co-ordinate in the new world? How is this going to operate?

Sanctions will work if we co-operate and collaborate with other countries. We are all agreed that that is when they are most effective. They are effective in terms of putting pressure on those that are sanctioned, upholding the rule of international law and protecting national security. It is necessary for us to work with our European partners to make our international sanctions regime as effective as possible. One of the issues previously discussed —which Ministers bump up against all the time—is the difficulty of getting agreements in the UN Security Council. Obviously the sanctions that we had on Russia over the annexation of Crimea could not be agreed in the UN Security Council, and that stands to reason. We have been able to get effective sanctions at European level, however, and our security interests are obviously aligned with those of the European Union, objectively speaking, and therefore we are going to take a similar view. We propose that we need to carry on working through the Political and Security Committee. The withdrawal agreement produced by the Commission said some interesting things about decision making. On the subject of administrative co-operation in article 30, it says that,

“as of the date of entry into force of this Agreement, the United Kingdom shall have the status of observer in the Administrative Commission. It may, where the items on the agenda concern the United Kingdom, send a representative, to be present in an advisory capacity, to the meetings of the Administrative Commission and to the meetings of the Technical Commission”.

The section on institutions includes proposals on representatives of member states and the United Kingdom taking part in the work of the Union’s institutions. Chapter 4, article 104 states:

“Article 10…shall apply in the United Kingdom in respect of representatives of Member States and of the United Kingdom taking part in the work of the institutions, agencies, offices and bodies of the Union”

in so far as their participation in that work took place before the end of the transition period.

There is then a section on how the transition period should work, and that is in part 4 of the document produced by the European Commission.

Paragraph 2 of article 122 states:

“Should an agreement between the Union and the United Kingdom governing their future relationship in the area of the Common Foreign and Security Policy and the Common Security and Defence Policy become applicable during the transition period, Chapter 2 of Title V of the”

treaty on European Union

“and the acts adopted on the basis of those provisions shall cease to apply”.

We then have the UK’s obligations with respect to financing defence and security operations, and finally, in article 157 under “Institutional provisions,” it is proposed that, on the date that the withdrawal agreement comes into force:

“A joint committee is hereby established”.

I am not saying that what the Commission proposes is the right way to go, but we are concerned that we have no sense of what the Government think we should do. That is why we tabled the new clause, which suggests that, with respect to sanctions policy, we should retain our membership of the Political and Security Committee of the European Union.

[Sir Alan Duncan]

The new clause would require the Government to commit to negotiating the UK’s continued participation in the EU’s Political and Security Committee after Brexit and delay the commencement of the Bill until a report had been laid before Parliament setting out whether that had been achieved.

The first point I make is that the Bill is about powers, not policy. The UK’s legal powers to implement sanctions flow largely from the European Communities Act 1972. The Bill will replace those powers and, as is recognised on both sides of the House, is necessary to enable the UK to impose sanctions. We are, of course, looking at our sanctions policy and have described our desired future relationship with the EU in a range of places, but it is not appropriate to place that in the Bill.

Secondly, as we have set out, the Government have an unconditional commitment to European security, and we continue to share common threats, interests and values with our European partners. That makes close co-operation, including on sanctions, in both our interests. The exact nature of the UK’s future relationship with the EU on sanctions still needs to be determined, but the UK will remain a critical player in both the European context and the global context.

The UK’s influence on sanctions derives in part from our membership of the EU, but it is not dependent on continued participation in EU bodies. A lot of it derives from the pre-eminence of the City of London in controlling so many flows of money. Our influence also comes from our status as a permanent member of the UN Security Council and our membership of bodies such as the G7. That influence is underpinned by our strong economy and financial sector, and both public and private sanctions expertise. That makes the UK a key sanctions partner.

As the Prime Minister made clear at the Munich security conference a couple of weeks ago, our partnership with the EU should offer us the means and the choice to combine our efforts to the greatest effect where that is in our shared interest. That includes working closely with the EU on sanctions. My right hon. Friend the Foreign Secretary was clear on Second Reading that he hopes

“we can act in tandem”

with the EU on sanctions because we

“will always confront the same threats and defend the same values.”—[Official Report, 20 February 2018; Vol. 636, c. 78.]

That demonstrates our commitment to close co-operation with the EU and other international partners regardless of the institutional framework.

Finally, we do not seek to attend EU meetings on the same basis as EU members. It is worth noting that the PSC is not the primary body that deals with sanctions. Sanctions pass through a range of EU institutions before adoption, from working groups to Council meetings. Committing the Government to seek to join the PSC for sanctions would not make sense from a sanctions policy perspective, and does not make sense in relation to our broader approach to negotiations with the EU. Although the details are a matter for negotiation, in the area of foreign policy as a whole we envisage both formal and informal mechanisms to allow regular dialogue, co-operation and close co-ordination.

To tie our objectives to one model would be counterproductive and would remove the freedom to explore new and better ways of working together with the EU on sanctions once we have left the European Union. However, we do not need text in the Bill to underline our commitment to working closely with international partners on sanctions, because that is what we will do. Given that, I respectfully ask the hon. Lady to withdraw the motion.

Sanctions and Anti-Money Laundering Bill [Lords] (Sixth sitting)

Debate between Helen Goodman and Alan Duncan

Tuesday 6th March 2018 Public Bill Committees

[Sir Alan Duncan]

I am not directly involved in this, but as I have said frequently, I am very happy to offer the expertise of officials to the hon. Lady so that she can fully get to grips with the intricate detail of the question she has asked.

Hon. Members will recall that the Criminal Finances Act 2017 provides for a review of the effectiveness of the bilateral arrangements. That report must be prepared before 1 July 2019, and it will then be published and laid before Parliament. The reviews will provide a clear understanding of how the jurisdictions are meeting their commitments. At that point, we will be in a better position to consider what more might need to be done. I stress once again that we will engage with the overseas territories and dependencies; we do so already and we will continue to do so on a regular basis, with the clear objectives in mind of wanting consistent and constant improvements in the way in which their finances are organised.

A key feature of the Government’s approach has been to maintain a level playing field between all the overseas territories with financial centres and the Crown dependencies. As I have described, we have robust review processes regarding the implementation of these arrangements. If these reviews demonstrate that the full implementation of the exchanges of notes is not taking place in any individual jurisdiction, it would be right for hon. Members to consider this issue further. For the time being, however, we should continue to focus on the full implementation of the existing bilateral arrangements. We are on a good and solid track; therefore, I urge hon. Members to withdraw the new clause.

[Helen Goodman]

It is nice to see you in the Chair, Dame Cheryl. I wish to remind members of the Committee of two things: first, the Government’s own statement in 2012 that, as a matter of constitutional law, the British Parliament can legislate for Crown dependencies and overseas territories. Secondly, the current approach, where the authorities in London have to ask individual questions, is not as effective in tracking down and deterring illegality as having a transparent approach. That was demonstrated by the fact that, when the Panama and Paradise papers were leaked, they were able to initiate more inquiries and take more action against people because, as I was trying to explain this morning, they were able to see the overall pattern.

I am disappointed in the Minister’s response—not surprised, but disappointed—because he has not shown any flexibility at all. However, I do not wish to put the hon. Member for Ochil and South Perthshire on the spot. I think we will come back to this on Report, so I do not wish to put the motion to a vote. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 2

Public register of beneficial ownership of UK property by companies and other legal entities registered outside the UK

“(1) In addition to the provisions made under paragraph 6 of Schedule 2, for the purpose of preventing money laundering in the UK property market and public procurement, the Secretary of State must create a public register of beneficial ownership information for companies and other legal entities registered outside of the UK that own or buy UK property, or bid for UK government contracts.

(2) The register must be implemented within 12 months of the day on which this Act is passed.”.—(Helen Goodman.)

This new clause would require the Secretary of State to create a public register of beneficial ownership information for companies and other legal entities registered outside of the UK that own or buy UK property, or bid for UK government contracts, within 12 months.

Brought up, and read the First time.

[Helen Goodman]

I beg to move, That the clause be read a Second time.

In 2015, David Cameron said:

“London is not a place to stash your dodgy cash.”

That is why he wanted to set up a register of the real owners of UK property owned by companies registered overseas. Unfortunately, the timetable for that has slipped. Following his announcement in 2015, the Government made an announcement shortly before Christmas saying that they now expected to set up the register in 2021. That is six years. In the other place, it was Tory peers who pressed for this to be speeded up. Our new clause does precisely the same thing.

Last week, the right hon. Member for Newbury mentioned unexplained wealth orders. Indeed, the Security Minister got an excellent splash on the implantation of this part of David Cameron’s package on 3 February. It was headed:

“Russians in Britain told to reveal their riches. McMafia-style crackdown on ‘corrupt’ oligarchs.”

It said:

“The government estimates that about £90 billion of illegal cash is laundered in Britain every year.”

The Minister said:

“McMafia is one of those things where you realise that fact is ahead of fiction…It’s a really good portrayal of sharp-suited wealthy individuals, but follow the money and it ends up with a young girl getting trafficked for sex.

What we know from the Laundromat exposé is that certainly there have been links to the [Russian] state. The government’s view is that we know what they are up to and we are not going to let it happen any more.”

He then explained that unexplained wealth orders were coming into effect.

I cannot understand why, given that those orders are coming into effect, a start has not been made on one with the purchase from the Ministry of Defence of Brompton Road tube station by a Ukrainian gas magnate. For colleagues who have not been following this long-running issue, Dmytro Firtash is a friend of ex-President Yanukovych and an associate of both President Putin and Paul Manafort. He was arrested in Vienna on corruption charges at the request of the FBI. Latterly, attempts have been made to extradite him to the United States, first on Magnitsky charges and later in relation to his alleged role in masterminding an international racket that aimed to sell titanium to Boeing.

Like all rich people, he operates indirectly. For example, his foundation, New Century Media, paid for the £800 ticket to a summer ball for the Minister here today—the right hon. Member for Rutland and Melton—according to the Minister’s entry in the Register of Members’ Financial Interests from 2010. He also gave £85,000 to the Conservative party centrally. I would have thought that he was a prime candidate to receive an unexplained wealth order, and I hope that Ministers will see if that can be pursued.

[Sir Alan Duncan]

Is the hon. Lady saying that New Century Media is owned by Mr Firtash?

[Helen Goodman]

Yes.

[Sir Alan Duncan]

It is owned by David Burnside—a former Member.

[Helen Goodman]

I think Mr Burnside is employed by Mr Firtash. That is the issue. These things are not exactly transparent.

Let us return to the question of whether the current state of the law is adequate. The Times also had a leading article which said:

“Three difficulties may blunt the effectiveness of the wealth orders. First, all the agencies involved in investigating and prosecuting those suspected of laundering dirty money in Britain are already over-stretched. They need experienced staff used to digging through multiple layers of shell companies and intricate business transactions, and they do not have enough of them.

Second, the orders frieze assets for an interim period and are only one early step in the process of bringing oligarchs to heel. The government has to be braced for legal marathons contested by the rich and corrupt. That requires political will.

Above all, the red carpet for crooks has to be rolled up. Too many people in the City of London, in the divorce and libel courts, in the art world and in high-end estate agencies have failed to look closely at the cash coming their way. An overdue step would be a public register revealing the true owners of overseas companies that own property in Britain.”

Until we have the public register, it is not going to be possible to identify who owns the properties and whether or not the wealth invested in them has been gained legitimately or illegitimately. In other words, are the wealth orders explained or unexplained? I am not quoting the Morning Star or the Daily Mirror—I am quoting The Times.

We think that this is all taking too long; it is a problem that it is taking too long. It is a problem because of its size, which I will describe. It is also a problem because Ministers are giving time to people to rearrange their affairs and to reorganise them in order to avoid the measures which are in train. A concrete example of that would be the use of trusts. That is why further we have tabled a new clause on trusts.

Global Witness and Transparency International believe that 86,397 properties in England and Wales are owned by companies registered in offshore secrecy jurisdictions; 87% of companies owned by foreign company owners in secret jurisdictions. Half of them are in London and half are in other parts of the country. The 10 most expensive properties owned by companies in tax havens are worth £1.5 billion. Furthermore, Transparency International believes that there are suspicions about £4.4 billion-worth of UK properties, over half of which—£2.36 billion—belongs to companies registered in the British Virgin Islands. They also say that these properties in secret jurisdictions account for 75% of all UK properties under investigation for corruption. If hon. Members or members of the public are interested in seeing what is going on, I recommend going to the Global Witness website where they can type in their postcode and see how many of those secretly owned properties with overseas owners are located on a map.

--- Later in debate ---

[Helen Goodman]

I beg to move, That the clause be read a Second time.

We now move to a slightly different aspect of the Bill—how decisions will be taken once we leave the European Union. The new clause would require that in negotiations with our European partners, we seek to maintain participation in the Political and Security Committee of the European Union, to align sanctions policy with the European Union, and would require the Government to report on those negotiations and on how they are going. As with the commencement plan, which I felt the Minister was vague and unclear about, so with this. How are we going to co-ordinate in the new world? How is this going to operate?

Sanctions will work if we co-operate and collaborate with other countries. We are all agreed that that is when they are most effective. They are effective in terms of putting pressure on those that are sanctioned, upholding the rule of international law and protecting national security. It is necessary for us to work with our European partners to make our international sanctions regime as effective as possible. One of the issues previously discussed —which Ministers bump up against all the time—is the difficulty of getting agreements in the UN Security Council. Obviously the sanctions that we had on Russia over the annexation of Crimea could not be agreed in the UN Security Council, and that stands to reason. We have been able to get effective sanctions at European level, however, and our security interests are obviously aligned with those of the European Union, objectively speaking, and therefore we are going to take a similar view. We propose that we need to carry on working through the Political and Security Committee. The withdrawal agreement produced by the Commission said some interesting things about decision making. On the subject of administrative co-operation in article 30, it says that,

“as of the date of entry into force of this Agreement, the United Kingdom shall have the status of observer in the Administrative Commission. It may, where the items on the agenda concern the United Kingdom, send a representative, to be present in an advisory capacity, to the meetings of the Administrative Commission and to the meetings of the Technical Commission”.

The section on institutions includes proposals on representatives of member states and the United Kingdom taking part in the work of the Union’s institutions. Chapter 4, article 104 states:

“Article 10…shall apply in the United Kingdom in respect of representatives of Member States and of the United Kingdom taking part in the work of the institutions, agencies, offices and bodies of the Union”

in so far as their participation in that work took place before the end of the transition period.

There is then a section on how the transition period should work, and that is in part 4 of the document produced by the European Commission.

Paragraph 2 of article 122 states:

“Should an agreement between the Union and the United Kingdom governing their future relationship in the area of the Common Foreign and Security Policy and the Common Security and Defence Policy become applicable during the transition period, Chapter 2 of Title V of the”

treaty on European Union

“and the acts adopted on the basis of those provisions shall cease to apply”.

We then have the UK’s obligations with respect to financing defence and security operations, and finally, in article 157 under “Institutional provisions,” it is proposed that, on the date that the withdrawal agreement comes into force:

“A joint committee is hereby established”.

I am not saying that what the Commission proposes is the right way to go, but we are concerned that we have no sense of what the Government think we should do. That is why we tabled the new clause, which suggests that, with respect to sanctions policy, we should retain our membership of the Political and Security Committee of the European Union.

[Sir Alan Duncan]

The new clause would require the Government to commit to negotiating the UK’s continued participation in the EU’s Political and Security Committee after Brexit and delay the commencement of the Bill until a report had been laid before Parliament setting out whether that had been achieved.

The first point I make is that the Bill is about powers, not policy. The UK’s legal powers to implement sanctions flow largely from the European Communities Act 1972. The Bill will replace those powers and, as is recognised on both sides of the House, is necessary to enable the UK to impose sanctions. We are, of course, looking at our sanctions policy and have described our desired future relationship with the EU in a range of places, but it is not appropriate to place that in the Bill.

Secondly, as we have set out, the Government have an unconditional commitment to European security, and we continue to share common threats, interests and values with our European partners. That makes close co-operation, including on sanctions, in both our interests. The exact nature of the UK’s future relationship with the EU on sanctions still needs to be determined, but the UK will remain a critical player in both the European context and the global context.

The UK’s influence on sanctions derives in part from our membership of the EU, but it is not dependent on continued participation in EU bodies. A lot of it derives from the pre-eminence of the City of London in controlling so many flows of money. Our influence also comes from our status as a permanent member of the UN Security Council and our membership of bodies such as the G7. That influence is underpinned by our strong economy and financial sector, and both public and private sanctions expertise. That makes the UK a key sanctions partner.

As the Prime Minister made clear at the Munich security conference a couple of weeks ago, our partnership with the EU should offer us the means and the choice to combine our efforts to the greatest effect where that is in our shared interest. That includes working closely with the EU on sanctions. My right hon. Friend the Foreign Secretary was clear on Second Reading that he hopes

“we can act in tandem”

with the EU on sanctions because we

“will always confront the same threats and defend the same values.”—[Official Report, 20 February 2018; Vol. 636, c. 78.]

That demonstrates our commitment to close co-operation with the EU and other international partners regardless of the institutional framework.

Finally, we do not seek to attend EU meetings on the same basis as EU members. It is worth noting that the PSC is not the primary body that deals with sanctions. Sanctions pass through a range of EU institutions before adoption, from working groups to Council meetings. Committing the Government to seek to join the PSC for sanctions would not make sense from a sanctions policy perspective, and does not make sense in relation to our broader approach to negotiations with the EU. Although the details are a matter for negotiation, in the area of foreign policy as a whole we envisage both formal and informal mechanisms to allow regular dialogue, co-operation and close co-ordination.

To tie our objectives to one model would be counterproductive and would remove the freedom to explore new and better ways of working together with the EU on sanctions once we have left the European Union. However, we do not need text in the Bill to underline our commitment to working closely with international partners on sanctions, because that is what we will do. Given that, I respectfully ask the hon. Lady to withdraw the motion.

Sanctions and Anti-Money Laundering Bill [Lords] (Fourth sitting)

Debate between Helen Goodman and Alan Duncan

Thursday 1st March 2018 Public Bill Committees

[Helen Goodman]

Of course, sanctions also have an impact on British commercial and economic interests, and on British commercial and economic actors. I will give the Committee a couple of examples of that.

In a more recent example, from 2014, we decided to impose sanctions against Russia after the intervention in Ukraine and the annexation of Crimea. One of the things that the sanctions covered was technology for oil and gas, which is obviously a very big sector in the Russian economy. SMD, a specialist engineering firm in Newcastle, makes sophisticated robots that operate on the seabed, doing the job of deep-sea divers. Those robots were banned and the chief executive of SMD—Andrew Hodgson, who I have met—highlighted the damage to his business. He said:

“Imagine we’re a 500 employee business and 20% of your business doesn’t exist, that’s 100 jobs and obviously we’ve been working hard on the technology”,

which is very modern technology. Normally, the company would have exported £20 million worth of equipment, but that business was lost, straight away. Another reason for considering the impact of sanctions on British citizens and the cost to the British economy is the possibility of counter-sanctions imposed by the person or country we are sanctioning. Russia retaliated by banning imports of agricultural and other produce from both the European Union and the United States, including mackerel from Scotland. That was not great for Scottish fishermen.

Nissan was also extremely badly affected, because the effect of the sanctions on Russia was that the rouble plummeted. Nissan had been paid for its car exports in roubles and was not hedged sufficiently to deal with a big drop in the rouble. It halted all the orders because it could not afford to take the loss, which was significant, although not as bad as if it had sold the cars at a loss.

We are pleased that the Government inserted clause 27 and that they are taking a consensual approach to the Bill—

[The Minister for Europe and the Americas (Sir Alan Duncan)]

Yo!

[Helen Goodman]

The Minister is encouraging me to go for it—

[Sir Alan Duncan]

Consensus.

[Helen Goodman]

I will therefore ask for an extension to what is covered in the review. We have given an explanation as to how we think that should be done.

[Sir Alan Duncan]

The Government are well aware of the concerns in the House about the humanitarian impact of sanctions. We are committed to finding constructive solutions through close engagement with non-governmental organisations and other humanitarian actors.

As part of the process of considering when to apply sanctions, the Government already consider the humanitarian impact on the individual or entity being sanctioned and on the general population, if the sanctions are countrywide. That is kept under close review, and we will continue to ensure that NGOs and other humanitarian actors can access the licences and exemptions needed to carry out their work in countries that are subject to sanctions.

In 2016, the UK secured amendments to the EU’s sanctions regime on Syria to provide a specific exemption for fuel purchases by humanitarian organisations, which assisted them in carrying out their operations in Syria while ensuring that they were still compliant with sanctions. As part of the consultation on the Bill, we hold regular roundtable meetings with NGOs and we take into account their concerns about the humanitarian impact of sanctions. A variety of tools and guidance are available for assessing that humanitarian impact, of which the UN handbook, which the hon. Member for Bishop Auckland referred to, is just one.

We take a case-by-case approach to the assessment of the humanitarian impact of each sanctions regime. We work closely with Department for International Development, as I recall happening when I was a DFID Minister, and with staff from the Foreign and Commonwealth Office, who may be in the relevant country —I am now familiar with what the FCO does on this as well. That ensures that the humanitarian impact is minimised and that licences and exemptions can be made available to NGOs carrying out humanitarian work.

The design and implementation of sanctions has moved on considerably since the handbook was drafted more than 10 years ago. Sanctions are now more targeted and focused directly on people whose behaviour we are trying to change. To restrict the way in which we assess the humanitarian impact to the methodology laid out in the UN handbook would limit our flexibility in making that assessment. In any case, of course, handbooks can change.

The hon. Lady also mentioned Iraq, where sanctions were imposed almost 30 years ago. Those were blanket sanctions. Modern sanctions practice is very different: sanctions are precise and targeted, and the humanitarian implications are much better taken into account. We have learned lessons from historical sanctions regimes. The example of Iraq is useful because it shows exactly the journey that we have been on to make sanctions more precise and effective.

The Government recognise the risks of unintended effects of sanctions on British citizens, as mentioned in the amendment, and on other individuals and entities. A thorough consideration of the possible unintended effects of sanctions is already part of the process of designing and implementing sanctions regimes, and it will continue to be in future. Given that sanctions have an international dimension, it is important that we do not just look at British citizens, but have safeguards for anybody who is unintentionally affected by a sanctions regime. Our concern for justice should not be confined to British citizens.

I assure the Committee that our review, which we will report annually to Parliament under clause 27, will assess the humanitarian impact of each sanctions regime; our approach to mitigating the risks of unintended effects; and our approach to humanitarian licences and exemptions that allow non-governmental organisations to continue their work in countries affected by sanctions.

I hope that that explanation has reassured the Committee sufficiently for the hon. Member for Bishop Auckland to withdraw her amendment.

--- Later in debate ---

[Richard Benyon (Newbury) (Con)]

The hon. Lady is right that this is a key part of the Magnitsky elements of the Bill. There may be a more elegant way of landing this and I am looking forward to hearing what the Minister says about it.

The review aspects are fundamental to achieving what I was talking about earlier: consistency with other jurisdictions. I know the Government are keen to work with us. It may be that that happens in the coming weeks and we find some mechanism by Report stage. Again, the Minister has this in his gift. There are those who say that what we propose would somehow be more than other countries have adopted as part of their Magnitsky legislation, but the US, for example, has a far more onerous oversight provision. It allows certain members of Congress the right to demand that the Government consider sanctioning certain individuals, and the Government have to respond within 120 days to give the reasons why they did or did not. That is called the congressional trigger, and there are other mechanisms in other jurisdictions elsewhere.

What we would like to achieve is that as soon as practicable after six months have elapsed, beginning with the day the Act is passed, and every 12 months thereafter, the Secretary of State prepares a report about the exercise of the powers conferred by the Act and lays that report before Parliament. Subject to issues of clear confidentiality—I absolutely accept that is a requirement—that report should include a summary of any representations made in relation to the exercise or proposed exercise of powers and the response of the appropriate Minister to do the same.

I think there may be some work to be done on the question of who the independent reviewer should be. I note the form of words, which I was initially attracted to by the hon. Member for Bishop Auckland. There may be machinery of Government issues, which mean that that is not the right place for the independent reviewer to reside, but I think there are many ways of skinning this particular cat. The review element is fundamental, because it is important that those organisations that are taking forward evidence are able to have that evidence independently verified and Government held accountable.

On a related issue, which is not specific to this Bill but that makes my point, campaigners—with very good evidence—have brought cases about people connected to serious organised crime from overseas who operate in this country. They have taken that to agencies such as the Serious Fraud Office, the National Crime Agency and others, but it has not been taken up. When they have done that in other countries, assets have been frozen, people have been subject to visa denials and other measures have been taken. Somehow, people slip between the cracks in our system, and this is an opportunity to close that gap.

On where that independent reviewer resides, I am open to suggestions from my right hon. Friend the Minister or anyone. I am glad that the hon. Member for Bishop Auckland has given us a bit of breathing room to resolve this. By Report, we really need to have a review process that is independent and comprehensive; that addresses the measures that we require to allow people who have access to information to bring it forward; and that holds Government accountable for how they deal with that kind of information.

[Sir Alan Duncan]

The amendment is important because it overlaps with our earlier discussions about the broader Magnitsky issue. It also introduces two other elements, so it has three distinct elements.

The first element is the issue of adopting sanctions on a multilateral basis, which is what sanctions are really for. It is quite rare for sanctions to be adopted by only one country. Their whole effectiveness depends on multilateral co-operation. UN sanctions, which we are obliged to implement, are multilateral by their very nature. All the other sanctions that we have imposed in the past have also been multilateral, because we have imposed them as part of the EU. Although our departure from the EU necessitates our having an autonomous sanctions regime, we envisage that its operation will almost inevitably be multilateral. We agree that sanctions are more effective when they are adopted by a greater number of countries.

The UK plays a leading role as a permanent member of the UN Security Council in negotiating sanctions measures that build on the entire international community. We also work closely with the EU and other international partners in a range of groupings, such as the G7, and we will continue to work hard internationally to gain the widest possible support for sanctions measures.

In the second element of the amendment, the hon. Member for Bishop Auckland asks us to show our hand at all stages and to show the manner in which we piece sanctions together. However, to publicly reveal our discussions and the steps that we take to work with international partners could be damaging to those efforts. We would not wish to embarrass partners who, for their own reasons, decline to align with our sanctions policy or to risk the targets of sanctions understanding too much about which country was in which position on any given sanctions regime.

A related issue is whether an individual can nominate someone to be sanctioned, which they can. Any person can write to the Government and the Government will respond. Individuals may request that the Government apply new or additional sanctions regimes, and we will of course consider that.

[Helen Goodman]

How often does that happen in the real world? Does the Minister get a long letter from Amnesty International every week or every month that says, “We’ve seen this person and this person, and we think there is a problem”? I give that as an example, because one might imagine that it happened in that kind of way.

--- Later in debate ---

[Sir Alan Duncan]

I both thank and congratulate my right hon. Friend for the elegance with which he has made his point, and I can say in clear and simple language, “Message received.”

Perhaps I can also take this opportunity to inform the Committee, in a little more detail, our feeling and understanding of what we know are the independent oversight powers in the Bill, because they are a central part of the broader picture of oversight.

We think the Bill finds the right balance of powers and independent oversight of those powers, because—rightly—the powers to impose sanctions are placed in the hands of the Executive. As such, the Government will decide whether or not to impose sanctions and on whom. Likewise, in the first instance the Government will decide when to lift sanctions. That is in line with the standard practice of the Executive deciding foreign policy and is consistent with international practice.

However, the role of the courts—as the independent arbiter and judicial authority overseeing the powers in the Bill—is significant. The courts can look at decisions made by the Government under the Bill and judge whether those decisions were correct. If not, the courts’ judgment will of course be binding on the Government. Furthermore, the Bill has significant transparency requirements and the Minister has numerous reporting obligations to Parliament. The reports will all be laid before and scrutinised by Parliament. As is the case now, parliamentary Committees can produce their own independent reports and can take evidence and make recommendations. That will continue. There is far more scope for such independent oversight by Parliament than there is now, where decisions are taken in Brussels and there are limited reporting requirements to the UK Parliament. As such, we believe that the Bill finds the right balance of Executive decision making, independent judicial arbitration by the courts and independent political oversight and scrutiny by Parliament.

[Helen Goodman]

We have had another interesting exchange. We are extremely grateful to the right hon. Member for Newbury, who knows about the issues in great detail. When it was first suggested to me that we involve the independent reviewer for terrorism, I was a bit taken aback as well. At first blush, one thinks that sanctions and terrorism are not quite the same thing. However, that person is looking at assets frozen under terrorism legislation as well, so it is appropriate, and I do not think that the job description-type points that the Minister made quite hit the nail on the head.

Had the Minister said to us, “No, we have thought about this, but the independent reviewer for terrorism is not the right person—we would propose that it would be X,Y or Z,” that would have been a good response. Then, we would have had more confidence in the Minister’s willingness to engage in the consensus-building process that we are all, across the House, looking for on the Bill. It seems to me that the Minister is being extremely cautious, to the point of not acknowledging that some changes will have to be made if the Government are to get the Bill on to the statute book. The Minister would have done well to have thought about that between 20 February and today, and he would do well to be more flexible now than he has been.

The suggestion that we rely on the courts is not very practical. That means, in effect, that people have to take the Government to court using the judicial review processes. It is incredibly ad hoc and unsystematic. It will mean that somebody with a lot of money who is critical of the Government’s actions can go to court and get their justice. This is not a place where we are about to have legal aid, is it?

[Sir Alan Duncan]

There are many stages to be gone through before it ever needs to go to court. One of the provisions that I really pressed hard for in the preparation of the Bill was that there could be swift and direct redress for someone caught up in sanctions unfairly—as they might see it—who needs to defend themselves but does not have money. That is why there is a process for being able to submit arguments that say they have been wrongly caught up. If they are justified, those issues can hopefully be resolved before there is any need to go to court. The hon. Lady is making a very valid point, and, if it were the case, that is addressed in the Bill.

[Helen Goodman]

I am sorry, but I think we are now conflating two things. The Minister is conflating the arguments that were had in the other place on designated persons, and the arguments here. The changes that were made with respect to designated persons were completely reasonable. I would go further than that: I would say that the Minister in the other place, Lord Ahmad, was right to resist the blandishments of Lord Pannick, who wanted to provide a court process for UN sanctions as well as non-UN sanctions, but that is not what we are talking about here. I am disappointed that the Minister has not shown a more flexible posture, and indicated more clearly that he is prepared to think again. His intervention was really a defence of the Bill. He did not indicate that he was prepared to go some way, but not to have this precise wording. That being the case, I think we do want to test the will of the Committee.

[Helen Goodman]

I am grateful to the right hon. Gentleman. I do not know whether the Minister would like to intervene again in the light of that, or whether he is content with what he has said.

[Sir Alan Duncan]

Content.

[Helen Goodman]

Okay. In the light of the intervention from the right hon. Member for Newbury, I will stick with what I had first thought to do, and will not press the amendment. However, the Minister needs to understand that we will have to come back to this matter on Report. From his point of view, it would be best if he took the initiative. He has not taken any initiative so far. If he does not, we will. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Sir Alan Duncan]

I will explain the clause, and I hope answer the hon. Lady’s questions. As part of our membership of the UN and the European Union, we currently impose sanctions on more than 2,000 people and organisations. Upon our departure from the EU, it may be that there has been insufficient parliamentary time or civil service capacity to comprehensively review all EU sanctions listings, and to prepare and pass appropriate statutory instruments to incorporate them under the regular powers conveyed by the Bill.

In those circumstances, to ensure that we meet our international obligations and do not become a route through which sanctioned individuals can move their assets, it may be necessary to retain some lists of persons sanctioned by the EU, as frozen EU laws under the European Union (Withdrawal) Bill. The freezing of existing EU sanctions via the withdrawal agreement is a safeguard measure to make completely sure that there are no gaps in our sanctions regimes as a result of leaving the EU. If that proves necessary, Ministers will need powers to amend those lists by adding or removing individuals from them, and the clause provides that power. It is a backstop measure, operable only for a maximum period of two years after the date of departure. All it does is allow Ministers to amend the list of designated persons. It does not allow new regimes to be set up, or substantive changes to be made to retained regimes, such as setting up a new arms embargo. That would require action under clause 1.

[Helen Goodman]

We can debate the matter when we come to clause 55, if the Minister has been better briefed by then, but when does he picture Ministers starting to use the powers? Is it on 1 April 2019 or 1 January 2021? If it is not until 1 January 2021, what will happen during the intervening period? Is he satisfied that simply using the lists will work if we are in a period when we do not have integration on borders, criminal justice and so on?

[Sir Alan Duncan]

The clause enables us to exercise those powers, but we cannot at this stage provide the date specificity that the hon. Lady is seeking, because that is a matter of negotiation.

Question put and agreed to.

Clause 29 accordingly ordered to stand part of the Bill.

Clauses 30 to 33 ordered to stand part of the Bill.

Clause 34

court reviews: further provision

Question proposed, That the clause stand part of the Bill.

[Sir Alan Duncan]

The purpose of the clause is to ensure that those acting in good faith and in compliance with this legislation are properly protected from damages being awarded against them. The clause will not protect individuals if they are found to have been negligent or to have acted in bad faith. The measure is aligned with existing EU law and is necessary to ensure, for example, that enforcement officers acting under the law may perform their duties without fear of destitution.

The clause also restricts the circumstances in which the court may award damages against the state. Sanctions are imposed to counter unacceptable behaviour. They may need to be applied quickly and in situations in which there is incomplete information. However, the clause will still allow damages awards where there is evidence of negligence or of acts in bad faith. In practice, therefore, the clause restricts damages awards only in cases where the Government act in accordance with the information available to them and lawfully apply a sanction on the basis of sufficient evidence.

If damages awards were allowed in those circumstances, applying sanctions would carry a very significant risk to the public purse. Indeed, it is likely that the larger and more important the sanction target, the higher the financial risk to the taxpayer. It is therefore important to allow the Government to respond swiftly to developing situations and to protect the taxpayer to restrict the availability of damages as a remedy in the specific circumstances of negligence or acts of bad faith.

There was consultation before the Bill. As a piece of legislation that covers the whole of the UK, we believe that the powers should be as consistent as possible.

Question put and agreed to.

Clause 34 accordingly ordered to stand part of the Bill.

Clauses 35 and 36 ordered to stand part of the Bill.

Clause 37

Guidance about regulations under section 1

[Helen Goodman]

I beg to move amendment 28, in clause 37, page 29, line 39, at end insert—

‘(d) reporting obligations;

(e) licensing requirement provisions.

(3) Where civilian payments and humanitarian activity are exempt from any prohibitions and requirements imposed by the regulations, the appropriate Minister must issue guidance.

(4) The guidance under subsection (3) must include—

(a) best practice for complying with the processing of civilian and humanitarian activities to reduce the risk of funds benefiting designated individuals, entities or organisations;

(b) mechanisms to limit the impact of prohibitions and requirements on a permissible civilian and humanitarian activity;

(c) circumstances where the prohibitions and requirements may be relevant in the context of the otherwise permissible delivery of a humanitarian activity; and

(d) options setting out effective banking and payment corridors for the processing of payments in support of a civilian and humanitarian activity which is not subject to any prohibitions or requirements.’

This amendment would require that the guidance issued about regulations under section 1 includes guidance on reporting obligations and licensing requirements. It would also require the Government to issue guidance on civilian payments and humanitarian activity exempt from prohibitions and requirements imposed by regulations.

Sanctions and Anti-Money Laundering Bill [ Lords ] (Third sitting)

Debate between Helen Goodman and Alan Duncan

Thursday 1st March 2018 Public Bill Committees

[Sir Alan Duncan]

I can certainly say to my right hon. Friend that we will endeavour to work towards that destination. He will appreciate that in Government, agreement to certain processes requires collective responsibility. I want to see what we can do to head in the direction that he has campaigned for, but we will have to wait until the days leading up to Report to get to the point when I can say so for certain. I hope the hon. Lady will withdraw amendment 1.

[Helen Goodman]

That was a very interesting exchange. I wish to thank and commend the right hon. Member for Newbury for what he has said and for the thought that he has put into this matter. Obviously, we all want legislation to be good, and we do not wish to create a fest for lawyers. That is not the purpose here. The Government might have done the more reasonable thing and accepted amendments 1 and 2 and said, “By the way, they are not absolutely perfect, so parliamentary counsel will have to dot the i’s and cross the t’s and get the drafting absolutely perfect.” The Minister has not done that. In the spirit of compromise and consensus building, in which the Minister has said consistently that he is interested, I would like to draw a distinction between amendment 1 and amendment 2. Questions about the drafting seem to relate to amendment 2, but everybody who has spoken seems to agree with amendment 1. For that reason, I will press amendment 1 to a vote.

[Sir Alan Duncan]

In my everlasting search for consensus, may I put this logical argument to the hon. Lady? Those who feel fervently about this issue see the two amendments as part of a package. If we were to take one without the other, it would deny us the opportunity to have a broader debate in the whole House on the entire issue known as the Magnitsky Act. Cutting off one from the other would not necessarily please the campaigners, so it would be advantageous to put this matter to the whole House, should it get that far.

[Helen Goodman]

Our objective is not to satisfy campaigners in this House, but to get the law right.

--- Later in debate ---

[Richard Benyon]

I am confused by this one. I may be a member of the Intelligence and Security Committee, and I would not want anyone in this Committee to think that I have gone native and that somehow we want everything hushed up. I am entirely in favour of transparency of strategy, because that is the easiest way for Parliament to hold the Government of the day to account. But it seems to me that elements of this amendment would make it unworkable. It would favour the kind of state that we might seek to sanction, by laying bare before the world a strategy that, at times, it is worth while keeping within the corridors of power. I am sure some people will accuse me of being part of some sort of elite or believing in closed government, but it is absolutely not true.

The amendment calls for a memorandum that would show

“clear objectives for the relevant sanctions, including well-defined and realistic demands against which compliance can be judged…a coherent overarching diplomatic strategy”.

That is available, to an extent, and is discussed. It is part of our national security strategy. But to communicate in a way that would be helpful to—the actual words used in this amendment—“targeted countries,” would burden future Governments and that of today in a way that concerns me. I hope we may get some clarification on this, either from my right hon. Friend the Minister or the hon. Member for Bishop Auckland.

[Sir Alan Duncan]

I can confidently say that if anyone has a hot water bottle, I am prepared to offer them very good money for it. I have not got quite as many layers on as some others in the Committee. I will respond to the points made about this amendment and in large part concur with the comments made by my right hon. Friend the Member for Newbury.

The Bill as drafted already requires a Minister to lay before Parliament a report alongside the introduction of any sanctions regulation. Amendment 14 appears to duplicate that duty, setting out a number of specific factors to be included in such a report. I have some sympathy with the aim of the amendment. Given the potential effects of sanctions, they should only be used where it is appropriate and where the Government have thought through all of the consequences. It is right and proper that the Government can and should be held to account over the use of this power. As I have said, clause 2 already requires the Government to lay a report before Parliament alongside the introduction of any sanctions regulation.

The report would set out why a Minister considered the sanctions regulations to be consistent with the purposes outlined in the Bill, and why they were a reasonable course of action. I assure hon. Members that it will clearly state the objectives of the sanctions, their place within a broader diplomatic and foreign policy strategy and, if appropriate, the conditions under which they might be lifted—for example through the resolution of an armed conflict to which they were designed to apply.

In addition, the Government have committed to publishing an annual review of each of the sanctions regimes, which will be laid before Parliament as set out in clause 27. That report will explain why the sanctions regimes continue to be appropriate and how they meet the objectives set out in the original report.

[Helen Goodman]

Which clause is the Minister referring to?

[Sir Alan Duncan]

Clause 27. I hope that helps the hon. Lady.

The requirements in the Bill demonstrate that we are committed to being open before Parliament about the objectives of our sanctions regimes. To that extent, I do not disagree with the principle behind the amendment; rather, it is our view that the provisions are already sufficiently covered by clause 2 and the annual report under clause 27.

I want to make it clear that the Government will ensure that we have a coherent diplomatic strategy in place as part of the process by which we consider whether sanctions are appropriate; but to set that out publicly on the introduction of the regime, as would be required under new subsection (3A)(c), which the amendment would add to the clause, would, as my right hon. Friend the Member for Newbury has said, risk exposing our hand in sensitive areas and at inopportune times. It could be counterproductive and result, therefore, in less effective sanctions and foreign policy overall.

That is also the case with setting out an exit strategy at the start. Sometimes an exit strategy is clear from the purpose of the regime—for example, as I have said, promoting the resolution of an armed conflict. However, it might be inadvisable to oblige the Government to be so explicit in advance, especially where doing so might prejudice sensitive negotiations or affect our work with international partners.

The same is true for the amendment’s new subsection (3A)(e), which would oblige the Government to take the steps that we are taking with our international partners to promote co-operation on our individual sanctions regimes. As we have said many times, sanctions are most effective when they are implemented multilaterally, and we are committed to working closely with our partners to ensure that sanctions are implemented by the widest possible groupings. Setting that out in Parliament in advance risks undermining those discussions, which, by their nature, are private and sensitive. Therefore, while we respect the intentions behind the amendment, I urge the hon. Lady to withdraw it, on the basis of the detailed explanation I have given.

[Helen Goodman]

I was interested to hear what the Minister said. In the previous debate, on Magnitsky, he prayed in aid of his position paragraphs (f), (g) and (h) of clause 1(2), which were of course tabled by Labour Lords and added to the Bill in the other place. I notice that he has just done the same thing again: he prayed in aid clause 27, which was also added.

I take seriously the points about not being foolhardy in being open. It is a difficult, tricky balance, but in view of the arguments made by the right hon. Member for Newbury and the Minister, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Sir Alan Duncan]

Dame Cheryl, the clause gives the Government the ability to create sanctions regulations and to ensure that we can do so in order to continue to comply with our international obligations, such as UN Security Council resolutions, after we leave the European Union. Alongside allowing us to meet our international obligations, it will ensure that we can continue to use sanctions to meet our foreign policy and national security goals.

As a result of the amendment in the other place, the clause now specifies a range of other purposes for which sanctions can be imposed, including to promote compliance with international humanitarian law and international human rights law and to promote respect for human rights, democracy, the rule of law and good governance. That list shows that we can continue to implement sanctions for the purposes for which they are currently used. I reassure colleagues that the UK will also be able to implement measures in the same sectors as currently—financial, migration, trade, aviation and maritime. The clause is the foundation of the legislation, so I ask that it stand part of the Bill.

[Helen Goodman]

This is the most important clause in the Bill, and it was much improved in the Lords. I am slightly disappointed that we have not been able to make more progress, but it was clear from the debate that the right hon. Member for Newbury felt that he had been given assurances that progress will be made between now and Report. We hope very much that that progress is made. We take the Minister at his word on that, and we will undoubtedly come back and look at these issues on Report. For now, we are completely happy for the clause to stand part of the Bill.

Question put and agreed to.

Clause 1, as amended, accordingly ordered to stand part of the Bill.

Clauses 19 and 20 ordered to stand part of the Bill.

Clause 21

Periodic review of certain designations

--- Later in debate ---

[Sir Alan Duncan]

We do things as part of the EU, so it is not possible to segregate the cost in the way the hon. Lady asks. What we are doing is setting up an autonomous regime instead of being part of a collective regime.

I hope that the arguments that I have put to the Committee have persuaded the hon. Member for Bishop Auckland to withdraw her amendment.

[Helen Goodman]

I think the Minister has noticed some scepticism towards the points he made. We will press the matter to a vote.

Question put, That the amendment be made.

Sanctions and Anti-Money Laundering Bill [ Lords ] (Second sitting)

Debate between Helen Goodman and Alan Duncan

Tuesday 27th February 2018 Public Bill Committees

[Helen Goodman]

I beg to move amendment 22, in clause 18, page 17, line 7, leave out subsection (4) and insert—

“(4) For the purposes of subsection (2)(b), a body incorporated or constituted under the law of any part of the United Kingdom includes a body incorporated or constituted under the law of the following—

(a) any of the Channel Islands;

(b) the Isle of Man;

(c) any of the British Overseas Territories.”

This amendment would require the Government to include any of the Channel Islands, the Isle of Man and any of the British Overseas Territories in the definition of “United Kingdom person” under subsection(2).

Clause 18 was not much discussed in the other place, but the Opposition tabled amendment 22 because we think it important that part 1, which relates to sanctions, be extended automatically to the Channel Islands, the Isle of Man and the British overseas territories. We will be able to revisit the subject at the very end of our deliberations when we consider clauses 54 and 55, but I thought we should take the opportunity to consider it now.

As a matter of constitutional law, the UK Parliament has unlimited power to legislate for the overseas territories. Some overseas territories and Crown dependencies have their own legislatures, but they legislate on domestic matters, whereas sanctions are a lever in foreign policy—a Foreign Minister is leading the Bill, and the Foreign and Commonwealth Office is very much in the lead when it comes to driving sanctions policy. It cannot be argued that legislation on sanctions policy is domestic or in the normal purview of Crown dependencies and overseas territories, so the amendment seems logical.

There is a further reason for extending the definition automatically. There is a lot of controversy about the secrecy in how some Crown dependencies and overseas territories run their financial services, which gives them scope to be part of sanctions busting, whether deliberately—which I doubt—or inadvertently. That brings us back to the question of North Korea. The US Department of Justice alleges that companies based in the British Virgin Islands and Anguilla are linked to a North Korean bank. The Guardian reported on 20 February:

“The China-based Dandong Hongxiang Industrial Development Company was placed under US sanctions in 2016.”

I am sure the Minister is familiar with the Dandong Hongxiang Industrial Development Company. It was sanctioned after it was

“accused of operating on behalf of the Korean Kwangson Banking Corporation, which was itself sanctioned in 2009 over alleged links to North Korean weapons development. The shell companies, some of which appear in the Panama Papers, were part of a network of offshore entities used to obscure the acquisition of millions of dollars of fertiliser, coal and other commodities, according to the complaint.”

The report continued:

“US sanctions prevent North Korean financial institutions from dealing in US dollars. However, because some commodities vendors require sales to be conducted in dollars, North Korea needs to be able to access the currency in order to obtain goods and services that are unavailable domestically.

The criminal complaint, filed in 2016, alleges that KKBC used DHID to obtain access to US dollars, in part by establishing a network of 22 different shell companies in various jurisdictions that would obscure its role in the commodity transactions.”

I think I have made it clear that there is a case for applying sanctions in a straightforward and automatic way to the Crown dependencies and the overseas territories. It is clear, as the Government stated in 2012:

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

Given that is the case, I am sure Ministers will be keen to accept amendment 22.

[The Minister for Europe and the Americas (Sir Alan Duncan)]

The UK is responsible for the foreign affairs and security of the Crown dependencies and overseas territories. That is the constitutional position. However, there is another important constitutional point, which is that our long-standing practice is not generally to legislate for those jurisdictions without their consent.

Sanctions are a tool of foreign policy or are used to protect our national security. We have been clear that the overseas territories and Crown dependencies must follow the UK Government’s foreign policy, including the sanctions we apply. The Foreign Office has discussed that with the overseas territories and Crown dependencies, and they also accept that point of principle.

The hon. Lady referred to the current distinction. There are two ways in which sanctions are implemented by the overseas territories and Crown dependencies. The UK legislates directly for the majority of the jurisdictions with their consent through Orders in Council. Other jurisdictions choose to legislate for themselves but follow precisely the sanctions implemented in the UK. That model is well established and respects the rights of those different jurisdictions.

The Bill is drafted to reflect that reality. It is consistent with the current implementation model for UN and EU sanctions, as well as measures under the Terrorist Asset-Freezing etc. Act 2010. It allows those jurisdictions that choose to follow UK sanctions through their own legislation to continue to do so. It also allows the UK to legislate directly for certain overseas territories.

The amendment would drive a coach and horses through that well established model by deeming legal entities formed or incorporated in the overseas territories or Crown dependencies to be UK persons. At a stroke, it would bring those legal entities within the ambit of UK sanctions confined to the territory of the UK and subject to UK courts. It would disenfranchise those overseas territories or Crown dependencies by legislating for their legal entities without their consent. It would also give rise to the unusual situation in which a legal entity incorporated in an overseas territory is bound by UK sanctions, but those UK sanctions do not extend to the overseas territory in question and so do not bite on the entity’s activities in that territory. The amendment in such a case would not seem, therefore, to have any practical purpose.

I do not see the Bill as the right place to change these long-standing constitutional arrangements, nor do I see a compelling case for needing to do so. I am sure Members would not wish to jeopardise the achievements that friendly co-operation with these jurisdictions has already made. Nor would they seek to disenfranchise those territories that have chosen to legislate for themselves. For those reasons, I ask the hon. Lady to withdraw the amendment.

[Helen Goodman]

I accept that the Government are right to proceed through mutual agreement with the Crown dependencies and the overseas territories. I can also see, from what the Minister said, that there is a more elegant way of achieving what I wish to achieve with the amendment later in our proceedings. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 ordered to stand part of the Bill.

Motion made, and Question proposed, That further consideration be now adjourned.—(Mike Freer.)

Sanctions and Anti-Money Laundering Bill [ Lords ] (First sitting)

Debate between Helen Goodman and Alan Duncan

Tuesday 27th February 2018 Public Bill Committees

[Helen Goodman]

May I say what a pleasure it is to see you in the Chair on this bright and sunny, if cold, morning, Mr McCabe? I will not press the amendments, as they are simply a vehicle enabling me to ask a question: on trade sanctions, is there a loophole in relation to the Isle of Man?

[Sir Alan Duncan]

I thank the hon. Lady for her question. It is never unhelpful to be able to clarify a point of detail of this sort, and I hope I can now do that to her satisfaction.

Amendments 29 to 31 would cause the Bill to deviate from the established practice in export controls and customs matters where transfers of goods to the Isle of Man are not classified as exports and imports. The Isle of Man is part of a joint customs and indirect tax area within the United Kingdom, and across all customs matters goods transferred to the Isle of Man are not said to be exported from the United Kingdom, and goods transferred from the Isle of Man are not said to be imported into the United Kingdom. That is a long-standing customs arrangement and has been reflected in legislation as well as in custom and practice.

The Isle of Man is integrated into HM Revenue and Customs’ CHIEF—customs handling of import and export of freight—computer system, which enables it to operate UK customs. The Isle of Man mirrors UK export control and sanctions legislation and makes licensing decisions on exactly the same basis as the UK. The amendment, if it were carried, would put sanctions policy out of step with export control and customs. Only goods covered by sanctions legislation would be affected by this change and would in essence be subject to the same export controls twice. If a good were travelling to a sanctioned destination, via the Isle of Man under a licence, it would require one licence from the UK and another from the Isle of Man. The amendment would cause procedural and legal difficulties and increase administrative burdens for business and Her Majesty’s Government, and all for no observable benefit

I hope that I have persuaded the hon. Lady and given a satisfactory explanation in response to the amendment, which in any event she does not intend to press.

[Helen Goodman]

That is absolutely fine.

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

Like my hon. Friend, I am grateful to you for chairing the Committee, Mr McCabe.

I am also grateful to the Minister for his explanation. Very briefly, he referred to the Isle of Man’s treatment under the CHIEF system, but we are moving to the contractual disclosure system—CDS—for customs policies. That should have happened by last year, but it has been delayed and there are many concerns about it. Will the Minister assure me that the Isle of Man will be treated properly in any new customs arrangements, and that is the Government’s understanding of the situation?

[Sir Alan Duncan]

Although I am not familiar with the exact details of the system the hon. Lady mentions, I think I can say confidently that the Isle of Man will be treated in the way that I described in my previous remarks.

[Helen Goodman]

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 agreed to.

Clause 6

Aircraft sanctions

--- Later in debate ---

[Helen Goodman]

Will the Minister give way?

[Sir Alan Duncan]

I will just take this through to the logical conclusion, and then of course I will give way. I am sure the hon. Lady can understand the difficulty that the situation I described would pose in respect of a person on a ship or aircraft making such a claim.

[Helen Goodman]

I understand the Minister’s point, but since he accepts the humanitarian case we are making, why did he not put down his own amendments to cover those asylum seekers, as well as refugees?

[Sir Alan Duncan]

Because the provision is already in the Bill. I would argue that it is in the Bill to the satisfaction of the hon. Lady, because the system of licences and exceptions in the Bill offers the best way to maintain the integrity of sanctions, while ensuring that NGOs can provide humanitarian support to refugees, asylum seekers and displaced persons. It is often the displaced persons who are greatest in number.

That is not a difference of principle; that is simply our interpretation of why this proposal would not work in practice and why the Bill does work in practice and achieves the objectives of the amendments that the hon. Lady has tabled. On that basis, I ask her not to press her amendments, because provision is in the Bill to meet the demands that she seeks.

--- Later in debate ---

[Sir Alan Duncan]

It might be helpful, given the debate we have had, to rehearse the arguments for why we think clause 6 deservedly stands as it does without amendment. Clause 6 introduces provisions to ensure that the Secretary of State has the power to impose sanctions in respect of aircraft, most notably disqualified aircraft. Sanctions on transport form an important part of the suite of measures available to the UK. As a permanent member of the United Nations Security Council, the UK fully supports the imposing of transport sanctions on prescribed countries.

These powers would allow prohibitions and requirements to be introduced and directions to be issued to control the movement of disqualified aircraft as defined in subsection (6). Directions include preventing disqualified aircraft from entering UK airspace or, if they have already done so, detaining them in a UK airport or compelling them to leave UK airspace. More generally, where a designated person has a prescribed interest in an aircraft, the UK will ensure that this aircraft cannot be registered on the UK register. The UK will also have the power to remove such aircraft from the register. This clause also enables the UK to prevent aircraft from being registered in the prescribed country. Finally, the provisions would enable the UK to prevent British-controlled aircraft from overflying or landing in a prescribed country.

These clauses, therefore, will allow the UK to prevent the use of aircraft—where transport sanctions apply—by people connected to sanctioned countries such as North Korea. The powers in this clause are necessary for the UK to be able to develop and enforce transport sanctions and meet its international obligations. The implementation and enforcement of transport sanctions are a crucial element of the UK’s future foreign policy, and I believe this clause should stand part of the Bill.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clauses 7 to 14 ordered to stand part of the Bill.

Clause 15

Exceptions and licences

[Helen Goodman]

I beg to move amendment 18, in clause 15, page 14, line 41, at end insert—

“(3A) Regulations must include provision for the establishment of a fast-track process for dealing with requests for exceptions and licences for humanitarian purposes.”

This amendment would mean that regulations have to provide a fast-track process for dealing with any requests for exceptions and licences for humanitarian purposes.

--- Later in debate ---

[Sir Alan Duncan]

2014.

[Helen Goodman]

Right. The situation has left responsibility for the due diligence required for funds transfers with humanitarian NGOs operating in high-risk zones.

Banks and NGOs must cultivate relationships, with the support of the Charity Commission, that allow for reciprocal education with respect to compliance expectations, operating risks and mitigation steps. The Government therefore have a challenge in this situation. They need to provide guidance and clear messaging where there is ambiguity at the moment with respect to sanctions and counter-terrorism legislation.

I want to give the explanation for the fast-track process. We have a serious situation in Syria. Everyone knows that 400,000 people have died; 5 million have sought refuge overseas; 6 million have been displaced internally; and half a million people are in besieged areas. Yet this is what is going on. Saleh Saeed, the then chief executive of the Disasters Emergency Committee, said a couple of years ago about Syria:

“The DEC is concerned that the current regulatory regime is significantly slowing and seriously complicating legitimate transfers of much needed funds to pay for humanitarian aid operations inside Syria.”

The lengthy process for getting the money means that on one occasion a programme supporting 10,000 people simply had to close in 2013.

Emanuela Rizzo, who works for what I think is a French organisation, Terre des Hommes, is quoted as saying:

“Receiving money from Europe to Syria is a disaster,”.

The report states that the organisation made a request and waited:

“After 15 days of delay, it contacted the bank in Italy, which informed the NGO that the transfer had been rejected…The bank required a long list of documents, including the NGO’s agreement with the UN Office for Coordination of Humanitarian Affairs, its memorandum of understanding with the Syrian Arab Red Crescent, a letter vowing not to fund ‘terrorist’ groups, and a list of implementing partners.

After two months and a 200 euro…fee, TDH was able to get the money transferred through a different Italian bank with an affiliate in Syria. ‘But it’s becoming incredibly difficult’”.

The report states:

“Other aid agencies struggling to transfer money have resorted to wiring money to banks in Lebanon and physically driving across the border to pick it up. Aid coming in via social solidarity networks has had to do the same.

Since the beginning of the Syrian crisis in 2011, the USA, European Union, Turkey and the League of Arab States…have imposed a series of sanctions on Syria’s arms, banking, energy and oil sectors”—

all for perfectly good reasons—

“as well as on specific individuals, with the stated aim of stopping state repression of protests, initially, and later, of weakening the government.”

However, the sanctions regime has had significant unintended repercussions and second-order effects.

About 15 months ago, when I was on the Treasury Committee, we took evidence from the Charities Aid Foundation and UK Finance. We had some interesting exchanges, so I asked the Charities Aid Foundation what representations it had made. The witness said:

“We worked, for example, in changing proposition 8 in the FATF arrangements, which has a presumption that charities are high risk. We have now had that changed to a risk-based approach”.

However, that

“has created terrible distortions in the assessment of charities.”

The witness added:

“The best example that I could give you is in Egypt, which is scored very highly by FATF because it follows explicit rules in the treatment of charities. Yet all we have seen is a closing of civil society space in Egypt, where charities are simply closed down. That produces the best result, as far as FATF is concerned, because there is then no risk, since they are inherently high risk. Many of these charities are the ones that criticise the Government, so there is a real adverse effect coming through from some of these actions.”

On the question of compliance costs, I asked about the Financial Conduct Authority’s report, which had said that one large, well-known

“charity required £40k of advice on sanctions regimes in order to maintain operations in a number of jurisdictions.”

The Charities Aid Foundation witness said:

“The large international NGOs are spending significant amounts of money on compliance...DFID’s own recommendations in terms of the funding that it provides is that 7% of the cost of any grant that it gives may be used on compliance costs.”

In practice, he said, it is often twice that: between 7% and 14%. It is underwhelming for people who write their cheque for £100 to the Red Cross to know that only £86 of it gets through because the other £14 is spent on lawyers in the UK.

The Charities Aid Foundation would also like more guidance about acceptable risk. Its witness said:

“You could have Treasury-approved guidance, developed along the lines of the guidance that is available from the Joint Money Laundering Intelligence Taskforce for other areas of activity.”

There is a question as to whether we want general exemptions for large, well-known organisations such as the Red Cross or UNICEF, or particular, small licences. Our view is that there is a lot of confusion, and that the individual licences system is not working that well. It is not only non-governmental organisations that agree with that, but the banks too.

UK Finance says it is

“imperative that the UK legislative architecture clearly defines how new legislation will be applied…Our members are clear that the UK’s departure from the EU offers a timely opportunity to create a domestic licensing regime”.

It is asking for a consultation, because that is a complex matter. It is not something that we can sort out in five minutes or in a Bill Committee of amateurs—albeit well-intentioned ones—such as ourselves. It needs expertise.

Alongside the legislation, UK Finance is asking for consideration through

“a wider dialogue on longer-term sanctions implementation.”

It says that

“the impending UK legal sanctions framework will…introduce a new and extremely important dynamic…This will result in an increased scrutiny among globally operating corporate and financial institutions on the approach that will be taken by the UK towards pursing unilateral sanctions and extra-territorial enforcement activity…we would not wish either EU or overseas business to withdraw from the UK due to legal uncertainty, or for it to impede business reacting to potential future relaxation of sanctions”.

The situation is complex. UK Finance does not want people to not use British banks because we have a different and unclear set of rules that might bang up against the risk rules run by the Europeans or the Americans.

To summarise, UK Finance says that banks and international NGOs,

“have increasingly articulated that the current framework permitting humanitarian transactions into sanctioned and conflict environments needs re-thinking and an update.”

It proposes that,

“a new equilibrium be found that recognises the strategic importance of facilitating both humanitarian aid and permissible civilian transactions to higher risk jurisdictions subject to economic sanctions, whilst balancing expectations of appropriate sanctions compliance and counter terrorist controls”

that are required to make such movements of funds.

At the moment, banks and charities are,

“required to navigate a combination of complex multi-jurisdictional regulatory guidance and an inconsistent licensing regime which has led to a significant impact on the funding of humanitarian projects into certain conflict zones”

and other high-risk countries. The banks would like

“mutual recognition for humanitarian licences issued by ‘like minded’ competent authorities”

and

“general exemptions for certain mission critical activities”.

They, too, are interested in having a consultation.

Sanctions and Anti-Money Laundering Bill [Lords]

Debate between Helen Goodman and Alan Duncan

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

[Helen Goodman]

I am afraid that I do not think the Bill makes that clear. First, it does not include the phrase, “gross human rights abuses”, which the Foreign Secretary just used, and furthermore, it does not refer to public officials. This is a matter that we can debate upstairs in Committee, and I will be happy to do so with the Minister.

Another key area that the Government have failed to address properly is the position of refugees and victims of human trafficking. Last month, the House unanimously resolved:

“That…conflict resolution…and the protection of human rights should be at the heart of UK foreign policy and that effective action should be taken to alleviate the refugee crisis”.

There are now 66 million refugees—more than there have ever been and more than the population of the United Kingdom. The flow of desperate people across the Mediterranean and through Turkey is continuing. Yet the Bill gives no impression that Ministers have given any thought whatsoever to the plight of these people, who are seeking refuge from desperate and protracted conflicts around the world.

[The Minister for Europe and the Americas (Sir Alan Duncan)]

May I draw the hon. Lady’s attention again to clause 1(2)? Paragraph (e) mentions exactly what she is talking about—promoting

“the resolution of armed conflicts or the protection of civilians in conflict zones”.

Paragraphs (f), (g) and (h) refer exactly to the human rights abuses that my right hon. Friend the Foreign Secretary mentioned in response to her earlier comments.

[Helen Goodman]

That is absolutely true, but if the Minister reads a little further into the Bill and looks at clauses 6 and 7 on aircraft and shipping, he will see that there are some problems at that point. Again, we can come back to this in Committee.

The Bill states that prohibitions can be applied to UK nationals and companies based in the United Kingdom, but not against companies based or incorporated in the British overseas territories. Recent reports from UN monitors implicate territories such as the British Virgin Islands in the setting up of front companies that helped North Korea to evade the sanctions imposed on it. The problem of sanctions avoidance is very serious. Last week, I was told in answer to a written parliamentary question that the total cost of financial sanctions reported as having been breached last year was £170 million. This afternoon, I received a letter from the Treasury, which has looked at the numbers again and says that the number is £1.4 billion. We need to look at this in more detail in Committee.

I now turn to the anti-money laundering provisions—what one might call the McMafia section of the Bill. To set this in context, the Home Affairs Committee report of June 2016 found:

“Money laundering is undoubtedly a problem in the UK…It is disgraceful that at least a hundred billion pounds is being laundered through the UK every year. If the UK is to remain the centre of global finance, this must be addressed.”

It pointed out that

“money laundering takes many…forms…from complex financial vehicles and tax havens around the world through to property investments in London…and high value jewellery. It is astonishing that just 335 out of some 1.2 million property transactions…were deemed to be suspicious. This suggests to us that supervision of the property market is totally inadequate”.

At the moment, it is far too easy—

--- Later in debate ---

[The Minister for Europe and the Americas (Sir Alan Duncan)]

As my right hon. Friend the Foreign Secretary said in his opening speech, this Bill is necessary to ensure that we can continue to use sanctions and anti-money laundering regulations to support our foreign policy and national security goals as we leave the European Union. We have had a lively and passionate Second Reading debate, but I sense that the setting up of a UK sanctions regime on our departure from the EU would appear to enjoy the broad support of this House.

It is often invidious in winding up a debate to pick out some speeches but not all, but forgive me, Mr Speaker, if I do that this evening, because I think the two strongest and most remarkable speeches were those of the right hon. Member for Barking (Dame Margaret Hodge) and my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), with whom I worked very closely as his deputy in DFID. I appreciate the passion of the right hon. Lady; we will no doubt debate these matters at great length in Committee and on Report, and we will take on board the strength of the arguments we have heard tonight, and which, of course, we have heard before. Likewise, my right hon. Friend made an impassioned plea for humanitarian agencies to be fully considered, and I will come to that shortly. He also spoke of Magnitsky, as did many Members; I will go into more detail later, but for now I will say that this Bill has wide-ranging powers to sanction people for human rights abuse. On open registers, we share my right hon. Friend’s view on wanting to bear down on illicit money flows; as he said, the registers are open to instant access by regulatory authorities, but I quite understand his view that such action alone does not suffice.

I have a small point to make to my hon. Friend the Member for Huntingdon (Mr Djanogly), who asked if we could publish the anti-corruption strategy; we did so in December of last year. The hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) asked why nobody has been prosecuted for export control offences; in fact, there have been 23 not just prosecutions, but convictions, for export control offences in the 10 years from 2006 to 2016, and a number of these prosecutions relate to exports to countries covered by UN and EU sanctions regimes.

This being a Second Reading debate, I want to dwell on a few key principles contained in the legislation, as I have no doubt that we will discuss the closer detail further in Committee. The first such issue is that of delegated powers. They are rightly coming under scrutiny in this place today. However, it is important to recognise that Ministers implement sanctions and anti-money laundering regulations by using delegated powers now, through secondary legislation under the European Communities Act 1972, and this Bill will not change that approach. In fact, in the future Parliament will have greater oversight of sanctions than it currently does, with votes needed in both Houses when the UK acts outside the requirements of the UN, and given the need to respond quickly to global events, the Government believe that regulations remain the best mechanism for implementing and amending sanctions and anti-money laundering regimes.

There is, however, the question of creating criminal offences, as referred to by the hon. Member for Glasgow Central (Alison Thewliss), and I am confident this will be addressed before Report. We have listened to these concerns and we are working on a solution that we hope will be accepted by those who expressed them in another place. Indeed, Lord Judge, whom we have been talking to, and his colleagues did not disagree that breaches of sanctions should be criminal offences, and we will introduce amendments to fix this and address their concerns in due course.

On procedure, we believe we have the right balance of affirmative and negative resolutions. Regulations that implement UN regimes will be made under the negative procedure; regulations that do not implement UN sanctions regimes will be made under the made-affirmative procedure.

The hon. Member for Glasgow Central talked about the ability to amend devolved legislation as being “monstrous”. I think she slightly misunderstands the process here. Sanctions are a matter of foreign policy.

[Helen Goodman]

On negative and affirmative resolutions, the Minister is choosing to draw a distinction based on the origin of the sanctions—whether they are from the UN or the EU—but would there not be a greater logic in drawing a distinction between individual sanctions on people, which obviously have to be done quickly, and the rules of the game for the regimes, where the House would be reasonable in seeking to be consulted before they are introduced?

[Sir Alan Duncan]

The reason that we have made this distinction in terms of procedure is that we are obliged in law to implement UN sanctions. Once the sanctions have been agreed at the UN Security Council, the UK has an obligation to implement them under the UN charter. Not to do so would leave the UK in breach of international law—hence the distinction in the procedure that we are using.

Returning to what the hon. Member for Glasgow Central described as “monstrous”, I say again that sanctions are a matter of foreign policy and so are reserved to this Parliament.

Oral Answers to Questions

Debate between Helen Goodman and Alan Duncan

Tuesday 21st November 2017 Commons Chamber

[Sir Alan Duncan]

I am very happy to put that on our agenda, but may I also reassure my hon. Friend that the UK is a co-proponent of the proposal to establish a marine protected area in the Weddell sea, and that is being developed by the European Union and its member states? British scientists are taking a leading role in preparing a final MPA proposal, which is to be presented to the Commission for the Conservation of Antarctic Marine Living Resources in October next year.

[Helen Goodman (Bishop Auckland) (Lab)]

The hon. Member for North Wiltshire (James Gray) mentioned “Blue Planet II”, and 12 million people watched it on Sunday. We want to know what the Government are going to do to protect the beautiful environment around South Georgia and the South Sandwich Islands. Will the Government now commit to establishing a marine sanctuary around this British overseas territory?

[Sir Alan Duncan]

This issue has been championed very much by my right hon. Friend the Member for Newbury (Richard Benyon). Indeed, it is not just in the Antarctic that the UK is championing marine protection. The UK is on track to deliver our Blue Belt manifesto commitment around the overseas territories. We will have protected 4 million sq km of ocean by 2020, and the South Georgia and the South Sandwich Islands were designated in 2012 as a sustainable use MPA covering 1 million sq km. The first formal review of that will take place next year.

Exiting the European Union: Sanctions

Debate between Helen Goodman and Alan Duncan

Wednesday 19th July 2017 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

Sanctions are obviously an extremely important policy lever. People often think of sanctions as a modern policy instrument, but Thucydides mentions them as one of the instruments used against Megara in 432. Unfortunately, on that occasion they did not succeed in averting the Peloponnesian war. Sanctions are crucial nowadays, and it is vital that Ministers have the legal powers to implement sanctions policy in line with foreign policy objectives and responsibilities.

As the Minister has just said, the Government produced a consultation document on 21 April, and the deadline for people to respond was 23 June. The plan was originally that we would have a Bill before the summer recess, and I ask the Minister who will respond at the end of the debate: where is the Bill, and why have we not got it?

[The Minister for Europe and the Americas (Sir Alan Duncan)]

I may be able to help the hon. Lady. There was something called a general election that came along, and these things cannot be announced during purdah, so to have a proper response to the consultation, it is appropriate that we should prepare it during the coming few weeks and months. It would have been improper to have done so earlier.

[Helen Goodman]

I am not of course suggesting that the Bill should have been produced in the middle of the general election campaign, but it is quite clear that consultation responses were coming in during that period. As the Under-Secretary of State for Exiting the European Union said, officials have been looking at the responses. This is another example of the chaos and confusion that is evident on the part of the Government in the whole Brexit process. We had another example of that on Monday, when, without any explanation, Ministers withdrew the motion on a unified patent court. Across the board, policy is not being processed sensibly. These are not pieces on a chess board, but important areas of policy responsibility.

The consultation paper said that the legal powers we need to maintain sanctions will be put in the Bill, but it will not look at the policy goals or at how we will align future UK sanctions with those imposed by the European Union. I can understand the first part, but I really want to learn from Ministers whether the second part can be true. For sanctions to be effective, they must obviously be co-ordinated with our partners. Surely the way we make decisions to initiate and review sanctions must be explicitly linked with the processes of our partners in the UN and the European Union.

Hitherto in the EU, sanctions have often related to upholding values set out in the common foreign and security policy, including human rights, democracy, good governance and the rule of law. These should continue to be the cornerstones of our policy post-Brexit. I would be grateful to the Minister for Europe and the Americas if he confirmed that. The European Council has hitherto adopted decisions, together with any necessary regulations, and set out the elements of each individual sanctions regime. A number of UK Departments—principally, the Home Office, the Treasury and the Department for International Trade—have then taken on the responsibility for implementation. Will Ministers explain which Department will take the lead in co-ordinating other Departments on future sanctions?

In 1998, the Labour Government carried out a wide-ranging review of UK sanctions policy. When reporting to Parliament on the outcome of that review, the then Government outlined the core principles of sanctions policy: sanctions should be targeted to hit the regime, rather than ordinary people; they should include exemptions to minimise the humanitarian impact on innocent civilians; they should have clear objectives, including well defined and realistic demands against which compliance can be judged, with a clear exit strategy; there should be effective arrangements for implementation and enforcement by all states, especially neighbouring countries; and sanctions should avoid unnecessary adverse impacts on UK economic and commercial interests. We believe that these principles remain appropriate, and I would like an assurance from Ministers that they take the same view.

In the consultation paper, the Government state:

“Primary legislation will create a framework containing powers to impose sanctions regimes, the details of which will be laid out in the secondary legislation”.

That is somewhat vague. We seem to be being presented with a number of Henry VIII powers. We would be grateful if Ministers could tell us what the supervision and accountability arrangements with Parliament will be.

Assuming that the Bill creates a broad framework, and given the importance of ensuring that individual sanctions regimes are carefully calibrated, we believe that there is a good case for saying that all secondary legislation imposing UK sanctions should be subject to the affirmative procedure. In other words, new sanctions or changes to sanctions should require a debate on the Floor of the House, rather than in Committee upstairs. That is the only mechanism that would provide the requisite parliamentary scrutiny and the opportunity for us to hold the Government to account.

We would also like to know what level of oversight will be built into the process of reviewing sanctions. The consultation paper says only that both

“UN and EU sanctions are subject to internal reviews…We propose a similar approach under our new legislation…Internal reviews by the Government could include periodic reviews of individual designations or of entire regimes.”

Obviously, sanctions regimes need to adapt to changing circumstances, so ongoing parliamentary scrutiny and independent oversight will always be necessary. We want Ministers to provide clarity on that, so that procedures for accountability and independent oversight are built into any new legislation. We would like the Government to publish an annual report on the implementation of the sanctions regime, and to give Parliament a role in periodic reviews of UK sanctions—for instance, by making the Government’s annual report the subject of debates in both Houses—as well as a role in re-authorising ongoing sanctions on a yearly basis.

It is really difficult for a meaningful debate on this issue to take place until we have more clarity on the extent to which future UK-EU co-operation can take place, as my hon. Friend the Member for Ilford North (Wes Streeting) has said. That is particularly true of decisions as to whether sanctions should be imposed in the first place. The case of Ukraine is a good example of why it will remain important for us to work with the EU in future. It serves as perhaps the most prominent recent reminder of how collectively imposed sanctions can still have a real impact outside the UN. Everybody knows that the UK played a key role in making the intellectual case for those sanctions, and that the UK undertook significant diplomatic efforts in the EU and at the G7. How will the Government ensure not just that UK-EU co-operation on sanctions continues after we leave the EU, but that we will maintain our ability to shape decisions on when the EU sanctions are imposed? [Interruption.] “We won’t,” mumbles the Minister. We will hear whether, instead of mumbling on the Front Bench, he can answer those questions at the end of the debate.

[Sir Alan Duncan]

I hope that the hon. Lady will allow me to not mumble from the Dispatch Box. I was trying to alert her to the fact that most of those sanctions are imposed by the UN, to whose authority we are subject as a member.

[Helen Goodman]

As a matter of fact, the right hon. Gentleman’s colleague, the Under-Secretary of State for Exiting the European Union, just said—I think this is right—that about half the sanctions in which we are involved are not subject to UN resolutions, but have come separately from the European Union. Given that the debate is about exiting the European Union and sanctions, it is reasonable to focus on the European angle.

The Government have set up their consultation and scheduled this debate, but they are not able to explain how in practice we will co-operate with our allies in the EU on issues such as intelligence sharing, policing and judicial matters, and all the things that are needed to enforce compliance with sanctions regimes in an effective way. The lack of any plan is another example of the Government’s recklessness in threatening to use security co-operation as a bargaining chip in the Brexit negotiations.The role of the financial sector is likely to be key in implementing any effective UK sanctions regime, particularly in terms of tackling money laundering and terrorist funding. The size of the City of London means that our role is vital. We have a record of leading in this area, although concerns remain about money laundering and sanctions evasion.

A critical question concerns the extent to which any new sanctions regime will be applied to the UK’s overseas territories. Following the revelations of the Panama papers, it is clear that all the UK’s overseas territories could play a part in tracking down and clamping down on illicit finance. That applies especially to the Cayman Islands and British Virgin Islands, which have faced heavy criticism in the past, but also to territories such as Bermuda that are responsible for their own legislation in this area.

What is the Government’s assessment of whether sanctions are being adequately implemented and enforced in all UK overseas territories and Crown dependencies? Will the Channel Islands and Bermuda be responsible for their own legislation in this area under a new regime? What steps will the Government take to monitor implementation and enforcement in the overseas territories? Will they commit to reporting regularly to Parliament on this matter?

The question of sanctions is important and significant. It is a shame that we have not had more clarity from the Government today in the form of legislation, but I hope that when the Minister winds up the debate, he will be able to answer some of our questions.