Economic Crime and Corporate Transparency Bill (Third sitting)

Debate between James Daly and Tom Tugendhat

Committee stage
Thursday 27th October 2022 Public Bill Committees

[Tom Tugendhat]

Hear, hear!

Duncan Hames: Thank you. I think it is important that we should continue to respect the rule of law and have a judicial basis for asset recovery. Too often, it is tempting to have a more administrative approach, and with that comes risks. It is very important that, as well as having the clarity of purpose to designate a whole substantial raft of individuals and entities for Russia sanctions, we have the determination to make those sanctions work.

We published some research just last month that found hundreds of millions of pounds’ worth of UK real estate that we were fairly sure was owned and controlled by individual entities that have been named under Russia sanctions. However, if you check on the Land Registry, there are not any of the typical markers to say that you cannot sell or transfer or trade this property. That is partly because of some of the very clever and complicated arrangements for their ownership, including using trusts.

In the work you are doing on the Bill, there is an opportunity to ensure that really important measures for global security, such as our Russian sanctions, actually work, bite and make it impossible for those who have moved large amounts of wealth out of Russia to continue to control it in the interests of their political sponsors.

Helena Wood: I could not agree more that we need to start moving from freeze to seize, but I echo Duncan’s sentiments that we must do so in a way that protects the very things we are trying to protect and do: the rule of law, due process and democracy. We should not push towards measures that effectively put in place a ministerial decree for confiscating individual assets and run roughshod over A1P1 principles.

That said, there is further we could go in UK legislation. Even with the advent of the much vaunted unexplained wealth order, our law enforcement agencies remain on the back foot. There is more we can do within the confines of European rights compliance-tested laws of reverse burden mechanisms to put law enforcement on the front foot.

Fundamentally, though, it is not going to be an easy fight to link those assets back to the criminality from which they once derived, given the difficulties of gaining evidence across borders. However, there are models we could replicate that have been tested for ECHR compliance, such as in Italy and Switzerland—I could name others. If the Committee will forgive me for trailing some forthcoming RUSI work, a paper is coming in November or December this year that sets out some recommendations of where part 5 of the Proceeds of Crime Act 2002 could replicate some of the principles of other regimes and push forward to at least put law enforcement on the front foot.

The other issue I would point to, which has already been partly legislated for, is cost protection for our law enforcement agencies. We have legislated for cost capping in cases involving UWOs, but they are not the right tool to use in all cases; I particularly point to the oligarchs, who do not fit under the definition of PEPs in UWO legislation. There is an argument for the Bill to potentially push for full cost capping of part 5 cases to increase the risk appetite of our law enforcement agencies to take those cases on in the first place.

[James Daly (Bury North) (Con)]

Q I want to go back to information sharing. My understanding of the Bill—please tell me if I am wrong—is that the clauses will allow

“direct sharing between two businesses in the AML regulated sector”

and

“indirect sharing through a third-party intermediary for businesses in the financial sector”.

That is what the Bill does. Putting it bluntly, what is wrong with that? What is the criticism of those aims and the things it allows businesses to do?

Helena Wood: Civil liability for confidentiality is one barrier. It is an important one, and removing it will hugely increase appetite, but it is not the only barrier. The boundaries within our data protection legislation are not explicitly clear; they are open to interpretation. We need more guidance, potentially from the Information Commissioner, to make clear what those boundaries are. We potentially need further clarification in the data protection legislation that is currently going through—

--- Later in debate ---

[James Daly]

Thank you, Graham.

[Tom Tugendhat]

Q Could you give some live examples as to how you would use various aspects of the powers in the Bill to improve your ability to track? Of course, we have spoken on numerous occasions about the partnership that we need. If I may say so, Graham, you are an extremely active tracker of companies, and, I would therefore say, one of the top of the class in the public-private partnership.

Graham Barrow: That is kind. You must understand that I am a private citizen, so I do not have access to huge swathes of information that I would love to be able to get hold of to give a much rounder view of that. Companies House, of course, does, so there are some interesting things that it will have, such as email addresses, IP addresses and credit card details.

There are some important provisos there. Do not allow people to pay for their enrolment through a pre-paid credit card. That would be a bad thing. Do not allow people to apply through a virtual private network—a VPN. That would be a bad thing. Do not allow people to apply through something like Proton Mail or an encrypted mail account. That would be a bad thing. What we need is transparency in all those things so that we can aggregate that data with, for example, data from His Majesty’s Revenue and Customs, voter roll data and other data, to get a much more rounded picture of people who are applying for company directorships.

Now, that only works here in the UK. It is worth bearing in mind that about 150,000 company incorporations every year emanate from outside the UK. That adds further difficulty. There were 50,000 applications from China last year, so that is clearly a problem. Incidentally, those numbers soared after China banned cryptocurrency at the end of September last year. There was an extremely easy to observe uptick in UK corporate registrations from Chinese individuals.

The Bill will start to address such a range of issues. I think it will be the first of many if we are really going to make our corporate environment safe and secure, and start tackling economic crime and the abuse.

Police, Crime, Sentencing and Courts Bill

Debate between James Daly and Tom Tugendhat

3rd reading
Monday 5th July 2021 Commons Chamber

[James Daly]

No.

I support the Bill. I congratulate my right hon. and learned Friend and thank him for bringing forward legislation to ensure that rapists are not released early in their sentences. That is what the public want, that is what we were elected on a manifesto to deliver, and that is what we are doing.

[Tom Tugendhat (Tonbridge and Malling) (Con)]

I am delighted to speak in this debate and to speak in favour of new clause 17, which is tabled in my name. I am delighted that many hon. Members on both sides have expressed their support for it.

I will not move the new clause this evening, because I am lucky to have had conversations with the Lord Chancellor, who I am delighted to see is in his place, about the nature of this particular crime. This crime is, I would argue, almost unique in that it is a complete betrayal. It is a complete betrayal because it is not just by a person, but by the parent of a child at its most vulnerable stage. It is a complete betrayal because it is a failure—yes, of those parents, but actually of our entire society—to protect the most vulnerable. It is a complete betrayal because it allows a crime to continue when it should have stopped days before, and in this case days are lifetimes.

I am talking, of course, about the terrible abuse of children like Tony Hudgell—children who, like Tony, are in the early stages of life. They are not able to give evidence to a court, because they are in their 40th or 50th day of life. They could not possibly stand up in a court and give testimony, and they could not possibly point the finger at their abuser, so they find themselves in the invidious position of not being able to get the full weight of the law brought against their aggressor, because they are too young, too innocent, too silent to be able to bring that action.

The Lord Chancellor has spoken to me privately—I hope that he will not mind my raising it publicly—about how we share the same horror of these crimes and these offences, but at the moment the law does not allow the same sentencing. I only ask that in the next few months, before the Bill gets to the Lords and the change comes that we all hope for, he looks at this legislation and realises that there is a small lacuna—a gap—in which the sentencing could be corrected. It does not require a complete redrafting of the law, but a small swish of his pen, as his quill hits the vellum to change the sentences and match them appropriately to the crimes—crimes that would have reached the same sentence had the child been able to point the finger and identify the criminal.