Chinese Consulate: Attack on Hong Kong Protesters

John Glen Excerpts

Tuesday 18th October 2022 Commons Chamber

[Jesse Norman]

Of course, there is enormous interest in this topic, and not just on the specifics of particular events but on the wider geo-strategic question of the relationship between China and the rest of the world, and its respect for the rules-based order. Of course, I understand that. The hon. Gentleman will be aware that the Higher Education (Freedom of Speech) Bill will apply to Confucius Institutes and has within it some important new measures to track foreign influence and to ensure that it is publicly held to account. As I wrote the original amendment as a Back Bencher on which they are based, I must say that I feel a certain degree of pride in that area. It was not aimed at any particular country, but it can absolutely be used in relation to the Confucius Institutes.

[John Glen (Salisbury) (Con)]

My constituents will be alarmed at what they saw happen in Manchester. I recognise that the Government will have to maintain a constructive dialogue amidst a complicated relationship with China, but let us be really clear that the Chinese regime have shifted in their behaviours in recent years. The behaviour on the streets of Manchester demonstrates that shift. I urge my right hon. Friend not to hold back in facing up to the reality of the new dynamics of the relationship with China. We must remain constructive, but we must also face up to the fact that we now have very different values from those in China.

[Jesse Norman]

I thank my hon. Friend very much for his intervention. He is absolutely right. The point of constructive engagement is to do what we can to retain China’s respect for the international rules-based order, while also noting and concerting with allies to exercise influence where we can on any breaches in that area. He is absolutely right to point that out. Let me say one other quick thing. The many overlapping areas in which we and our allies interact with China require a nuanced and constructive approach, but the point about doubling down is absolutely right. Let me remind him that although the integrated review is not about any specific country or region, it is going through a refresh at the moment, and it will take account of emerging, current and expected future threats.

Sanctions and Anti-Money Laundering Bill [Lords]

John Glen Excerpts

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

[Mr Speaker]

I think the hon. Gentleman has achieved his objective. I gently point out that I still have propositions to put to the House and there is not a huge amount of time for the second group. I hope that that is the end to points of order. I thank the hon. Gentleman for what he has said.

Amendments made: Amendment 10, page 2, line 11, clause 1, at end insert—

“(ea) provide accountability for or be a deterrent to gross violations of human rights, or otherwise promote—

(i) compliance with international human rights law, or

(ii) respect for human rights,”.

This amendment makes clear that sanctions regulations can be made for the purpose of preventing, or in response to, a gross human rights abuse or violation.

Amendment 11, page 2, line 12, leave out “and human rights”.

This amendment is consequential on Amendment 10.

Amendment 12, page 2, line 16, leave out “human rights,”.

This amendment is consequential on Amendment 10.

Amendment 13, page 2, line 38, at end insert—

“(6A) In this Act any reference to a gross violation of human rights is to conduct which—

(a) constitutes, or

(b) is connected with,

the commission of a gross human rights abuse or violation; and whether conduct constitutes or is connected with the commission of such an abuse or violation is to be determined in accordance with section 241A of the Proceeds of Crime Act 2002.”

This amendment establishes that “gross violation of human rights” includes the torture of a person, by a public official or a person in an official capacity, where the tortured person has sought to expose the illegal activity of a public official or to defend human rights or fundamental freedoms.

Amendment 14, page 3, line 3, after first “to” insert “(e), (ea) and (f) to”. —(Sir Alan Duncan.)

This amendment is consequential on Amendment 10.

Clause 2

Types of Sanction

Amendment made: 15, page 3, line 26, clause 2, after “to” insert “(e), (ea) and (f) to”. —(Sir Alan Duncan.)

This amendment is consequential on Amendment 10.

Clause 28

Review of Regulations

Amendment made: 16, page 22, line 25, clause 28, after “to” insert “(e), (ea) and (f) to”. —(Sir Alan Duncan.)

This amendment is consequential on Amendment 10.

Clause 40

Revocation and amendment of regulations under section 1

Amendment made: 17, page 31, line 39, clause 40, after “to” insert “(e), (ea) and (f) to”.—(Sir Alan Duncan.)

This amendment is consequential on Amendment 10.

Clause 56

Extent

Amendment made: 20, page 43, line 7, clause 56, after first “1”, insert “, section (Public registers of beneficial ownership of companies registered in British Overseas Territories)”.—(Dame Margaret Hodge.)

This amendment is consequential on NC6.

Clause 57

Commencement

Amendment made: 18, page 43, line 31, clause 57, at end insert—

“( ) section (Periodic reports on exercise of power to make regulations under section 1);”—(Sir Alan Duncan.)

This amendment has the effect that the commencement date of clause (Periodic reports on exercise of power to make regulations under section 1) is the day on which the Act is passed.

New Clause 4

Independent review of regulations with counter-terrorism purpose

‘(1) The Secretary of State must appoint a person to review the operation of such asset-freeze provisions of relevant regulations made by the Secretary of State as the Secretary of State may from time to time refer to that person.

(2) The Treasury must appoint a person to review the operation of such asset-freeze provisions of relevant regulations made by the Treasury as the Treasury may from time to time refer to that person.

(3) The persons appointed under subsection (1) and (2) may be the same person.

(4) In each calendar year, by 31 January—

(a) the person appointed under subsection (1) must notify the Secretary of State of what (if any) reviews under that subsection that person intends to carry out in that year, and

(b) the person appointed under subsection (2) must notify the Treasury of what (if any) reviews under that subsection that person intends to carry out in that year.

(5) Reviews of which notice is given under subsection (4) in a particular year—

(a) may not relate to any provisions that have not been referred before the giving of the notice, and

(b) must be completed during that year or as soon as reasonably practicable after the end of it.

(6) The person who conducts a review under this section must as soon as reasonably practicable after completing the review send a report on its outcome to—

(a) the Secretary of State, if the review is under subsection (1), or

(b) the Treasury, if the review is under subsection (2).

(7) On receiving a report under this section the Secretary of State or (as the case may be) the Treasury must lay a copy of it before Parliament.

(8) The Secretary of State may pay the expenses of a person who conducts a review under subsection (1) and also such allowances as the Secretary of State may determine.

(9) The Treasury may pay the expenses of a person who conducts a review under subsection (2) and also such allowances as the Treasury may determine.

(10) For the purposes of this section, regulations are “relevant regulations” if—

(a) they are regulations under section 1, and

(b) they state under section 1(3) at least one purpose which—

(i) is not compliance with a UN obligation or other international obligation, and

(ii) relates to counter-terrorism.

(11) A purpose “relates to counter-terrorism” if the report under section 2 in respect of the regulations indicated that, in the opinion of the appropriate Minister making them, the carrying out of that purpose would further the prevention of terrorism in the United Kingdom or elsewhere.

(12) For the purposes of this section a provision of relevant regulations is an “asset-freeze provision” if and to the extent that it—

(a) imposes a prohibition or requirement for a purpose mentioned in section 3(1)(a), (b) or (d), or

(b) makes provision in connection with such a prohibition or requirement.

(13) If a provision is referred under this section which contains a designation power, any review under this section of the operation of that provision may not include a review of any decisions to designate under that power.”

This new clause requires the appointment of an independent reviewer to conduct reviews of sanctions regulations which impose asset-freezes or similar financial sanctions where the regulations are made for purposes relating to the prevention of terrorism and have been referred to the independent reviewer for review.—(John Glen.)

Brought up, and read the First time.

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

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

[Mr Speaker]

With this it will be convenient to discuss the following:

Government new clause 5.

Government new clauses 15 to 17.

New clause 2—Companies House: due diligence and resources—

“(1) For the purposes of preventing money laundering, the Companies Act 2006 is amended as follows.

(2) In section 1061 (the registrar’s functions) after subsection (1) insert—

‘(1A) Functions directed by the Secretary of State under subsection (1)(b) must include due diligence on a person wishing to register a company.

(1B) In this section ‘due diligence’ has the same meaning as ‘customer due diligence measures’ in regulation 3 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 692/2017).”

(3) In section 1063 (Fees payable to the registrar), in subsection (2)(a) after ‘Secretary of State’ insert ‘including the duty of due diligence under section 1061(1A).’”

This new clause would amend the duties of Companies House to ensure that any person wishing to register a company must be checked for due diligence by Companies House, in line with the measures included in the Money Laundering Regulations 2017. It also ensures that the Secretary of State can charge fees for due diligence checks to cover costs incurred by Companies House.

New clause 7—Money laundering exemptions—

“The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692) are exempted from amendment or revocation under the Legislative and Regulatory Reform Act 2006 and under the European Union (Withdrawal) Act 2018.”

This new clause would prevent any amendment or repeal of the 2017 Money Laundering Regulations via powers contained in the Legislative and Regulatory Reform Act 2006 and the European Union (Withdrawal) Act 2018.

New clause 8—Public register of beneficial owners of overseas entities—

“(1) The Secretary of State must, in addition to the provisions made under paragraph 6 of Schedule 2, 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.

(3) For the purposes of this section ‘a register of beneficial ownership for companies and other legal entities registered outside of the UK’ means a public register—

(a) which contains information about overseas entities and persons with significant control over them, and

(b) which in the opinion of the Secretary of State will assist in the prevention of money laundering.”

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

New clause 10—Parliamentary committee to scrutinise regulations—

“(1) A Minister may not lay before Parliament a statutory instrument under section 49(5) unless a Committee of the House of Commons charged with scrutinising statutory instruments made under this Act has recommended that the instrument be laid.

(2) The committee of the House of Commons so charged under subsection (1) may scrutinise any reviews carried out under section 28 of this Act.”

This new clause would require a specialised House of Commons Committee to approve all statutory instruments laid under the affirmative procedure under this Act. The Committee would also scrutinise the Government’s reviews of sanctions regulations.

New clause 11—Failure to prevent money laundering—

“(1) A relevant body (B) is guilty of an offence if a person commits a money laundering facilitation offence when acting in the capacity of a person associated with B.

(2) For the purposes of this section “money laundering facilitation offence” means—

(a) concealing, disguising, converting, transferring or removing criminal property under section 327 of the Proceeds of Crime Act 2002 (concealing etc);

(b) entering into an arrangement which the person knows, or suspects, facilitates (by whatever means) the acquisition, retention, use, or control of criminal property under section 328 of the Proceeds of Crime Act 2002 (arrangements); or

(c) the acquisition, use or possession of criminal property, under section 329 of the Proceeds of Crime Act 2002 (acquisition, use and possession).

(3) It is a defence for B to prove that, when the money laundering facilitation offence was committed, B had in place adequate procedures designed to prevent persons acting in the capacity of a person associated with B from committing such an offence.

(4) A relevant body guilty of an offence under this section is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction in England and Wales, to a fine; or

(c) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum.

(5) It is immaterial for the purposes of this section whether—

(a) any relevant conduct of a relevant body, or

(b) any conduct which constitutes part of a relevant criminal offence,

takes place in the United Kingdom or elsewhere.

(6) In this section, ‘relevant body’ and ‘acting in the capacity of a person associated with B’ have the same meaning as in section 44 of the Criminal Finances Act 2017 (meaning of relevant body and acting in the capacity of an associated person).”

This new clause would make it an offence if a relevant body failed to put in place adequate procedures to prevent a person associated with it from carrying out a money laundering facilitation offence. A money laundering facilitation offence would include concealing, disguising, converting, transferring or removing criminal property under section 327 of the Proceeds of Crime Act 2002.

New clause 12—Public register of beneficial ownership of trusts and similar legal arrangements—

“(none) The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 are amended by leaving out paragraph (12) of regulation 45 (Register of beneficial ownership) and inserting—

‘(12) The Commissioners must ensure that the register is published.’.”

This new clause would require the Government to publish the register of beneficial ownership of trusts and similar legal arrangements on the day this Act is passed.

New clause 13—Due diligence—

“(1) For the purposes of preventing money laundering, when a company is formed, any company formation agent providing formation services must ensure that the identity and business risk profile of all beneficial owners of the company are established in accordance with—

(a) the customer due diligence measures under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692),

(b) regulations made under section 44 of this Act, or

(c) the Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on anti-money laundering measures.

(2) For the purposes of subsection (1), Companies House is to be treated as a ‘company formation agent’.”

This new clause would ensure that when a company is formed in the UK, the relevant formation services must identify the beneficial owners of the company. It will also treat Companies House as a “company formation agent”, ensuring that the data on the public register of beneficial ownership for companies is accurate.

New clause 18—Winding up companies of designated persons—

“(1) The Secretary of State may, in respect of a designated person subject to sanctions regulations under this Act—

(a) present a petition under section 124A of the Insolvency Act 1986 to wind up a company owned or controlled by a designated person; and

(b) make a disqualification order under section 8 of the Company Directors Disqualification Act 1986 against a designated person who is or has been a director or shadow director of a company or an overseas company.

(2) In this section, ‘company’ means a company registered under the Companies Act 2006 in the United Kingdom or a company that may be wound up under Part 5 of the Insolvency Act 1986 (unregistered companies).

(3) In this section, ‘overseas company’ means a company incorporated or formed outside the United Kingdom”.

This new clause would ensure the Secretary of State could close down companies owned or controlled by a person subject to sanctions under this Act using the pre-existing powers in the Insolvency Act 1986 and Company Directors Disqualification Act 1986.

New clause 20—Periodic review of exercise of powers and operation of Act—

“(1) As soon as reasonably practicable after the end of—

(a) the period of six months beginning with the day this Act is passed, and

(b) every 12 month period which ends with the first or subsequent anniversary of the end of the period mentioned in the preceding paragraph,

(2) Subject to issues of confidentiality the said report shall include a summary of any representations made in relation to the exercise or proposed exercise of the powers and the response of the appropriate Minister to the same.

(4) The Independent Reviewer appointed pursuant to section 20 of the Terrorism Prevention and Investigation Measures Act 2011 (‘the 2011 Act’) shall include a review of the operation of this Act in the reports by the Independent Reviewer produced pursuant to the 2011 Act.”

This new clause would require a periodic review of the exercise of the powers and operation of this Act six months after Royal Assent and every 12 months thereafter.

Amendment 1, page 1, line 8, clause 1, leave out “appropriate” and insert “necessary”.

Amendment 2, page 2, line 17, at end insert—

“(i) further the prevention of organised crime, or

(j) further the prevention of human trafficking.”

Government amendment 23.

Amendment 29, page 15, line 4, clause 15, at end insert—

“(i) provide for the procedure to be followed for an application for an exception or licence”.

This amendment would ensure that the regulations will include a procedure for applying for an exception or for a licence.

Government amendment 24.

Amendment 3, page 20, line 12, clause 22, leave out “3 years” and insert “12 months”.

Amendment 4, page 20, line 14, leave out “3 years” and insert “12 months”.

Amendment 5, page 21, line 36, clause 26, leave out “3 years” and insert “12 months”.

Amendment 6, page 21, line 38, leave out “3 years” and insert “12 months”.

Amendment 7, page 31, line 12, clause 38, leave out “may include guidance about—” and insert “must include, but is not limited to, guidance about—”.

Amendment 8, page 31, line 15, at end insert—

‘(3) The appropriate Minister must review the guidance issued under this section and lay a report before Parliament every 12 months.”

Government amendment 25.

Amendment 21, page 36, line 8, clause 48, leave out paragraph (a).

This amendment would remove paragraph 2(a) from Clause 48, which enables the appropriate Minister to amend, repeal or revoke enactments for regulations under section 1 or 44 using Henry VIII powers.

Amendment 9, page 37, line 27, clause 49, at end insert—

“(5A) A statutory instrument containing regulations under section 1 that repeals, revokes or amends—

(a) an Act of the Scottish Parliament,

(b) a Measure or Act of the National Assembly for Wales, or

(c) Northern Ireland legislation,

must receive the consent of the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly, respectively.”

This amendment would require the UK Government to obtain the consent of the devolved administrations before repealing, revoking or amending devolved legislation using a statutory instrument containing regulations under section 1.

Amendment 22, page 39, line 4, clause 51, leave out subsection (3).

This amendment would remove subsection (3) of Clause 51, which states that if a reporting provision is not complied with, the appropriate Minister must publish a written statement explaining why that Minister failed to comply with it.

Government amendments 26 and 19.

Amendment 30, page 59, line 5, schedule 3, at end insert—

“Solicitors (Scotland) Act 1980

‘(4) The Solicitors (Scotland) Act 1980 is amended as follows.

(5) Section 34(1)(d) is repealed.

(6) In section 35(1), after paragraph (c) insert—

(cc) as to the way in which solicitors and incorporated practices are to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017”.”.

This amendment would amend the Solicitors (Scotland) Act 1980, ensuring it is consistent with this Act.

Amendment 27, page 59, line 14, at end insert—

“Insolvency Act 1986 (c. 45)

‘(1) In section 124A of the Insolvency Act 1986 (petition for winding up on grounds of public interest), after paragraph (1)(d) insert—

(e) any information notified to the Secretary of State pursuant to regulations made under section 1 of the Sanctions and Anti-Money Laundering Act 2018.’”

This amendment, which is consequential on NC18, would amend the Insolvency Act 1986 to ensure it is consistent with this Act.

Amendment 28, page 59, line 14, at end insert—

“Company Directors Disqualification Act 1986 (c. 46)

‘(1) In section 8 of the Company Directors Disqualification Act 1986 (Disqualification of director on finding of unfitness), after paragraph (1) insert—

(1A) The Secretary of State may apply to the court for a disqualification order to disqualify a person who is, or has been, a director or shadow director of a company, if that person is subject to regulations made under section 1 of the Sanctions and Anti-Money Laundering Act 2018.’”

This amendment, which is consequential on NC18, would amend the Company Directors Disqualification Act 1986 to ensure it is consistent with this Act.

[John Glen]

It is my privilege to address the second group of amendments, but before I do I would just like to acknowledge, as the hon. Member for Salisbury, the good will from across the House in light of the events of 4 March. With respect to the previous debate, I would like to acknowledge the work of my right hon. Friend the Member for Newbury (Richard Benyon), the hon. Member for Rhondda (Chris Bryant) and, in particular, my right hon. Friend the Minister for Europe and the Americas, who has done so much to come up with an outcome, which we have just expressed, that will mean a great deal to my constituents in Salisbury.

New clauses 2 and 13 aim to improve the quality of information on our company register. The Government believe that they would do so at a significant cost to UK business and would require considerable consequential change to the UK company law system for the measure to function. Companies House is taking active steps to improve the quality of data on the register. It has already increased its resourcing to support these investigations and more is being sought. Since the start of March, the first tranche of cases of non-compliance with beneficial ownership registration requirements were passed from Companies House to the Insolvency Service. The cases will form the basis of the first prosecutions for non-compliance with such requirements and should be prosecuted shortly.

New clause 18 and amendments 27 and 28, which were tabled by the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle), allow for action to be taken against so-called brass-plate companies that breach sanctions. The reason that brass-plate companies have not been prosecuted or wound up relates to the challenges of collecting evidence of their activities, not a lack of legal powers. I look forward to hearing what he has to say, but the amendments do not provide any enhanced ability to take action against such companies. We continue to explore with partners across Government whether we could do more to address this issue, so I hope that in due course, hon. Members will agree to withdraw this set of amendments.

I now turn to amendment 19, to which new clause 5 has a similar purpose. These proposals seek to clarify the interaction of powers in the Bill with the provisions of the European Union (Withdrawal) Bill. New clause 7 seeks to constrain the powers of future Governments to amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. However, the powers in the European Union (Withdrawal) Bill are necessary to ensure a functioning statute book immediately after the UK ceases to be a member of the EU.

Amendment 30 seeks to amend the Solicitors (Scotland) Act 1980 to give the Law Society of Scotland greater powers to conduct its role as an anti-money laundering supervisor. The Government strongly support all supervisors having adequate powers to effectively monitor and take measures to ensure compliance from their members and to use proportionate and dissuasive sanctions when their members do not comply with the rules. The Law Society of Scotland has raised with Treasury officials the issues that it would like to amend in legislation. They are looking closely at this issue and will continue to work with the Law Society of Scotland to address it. I therefore respectfully ask the hon. Member for Glasgow Central (Alison Thewliss) not to press that amendment, but no doubt we will have a discussion in due course.

New clause 8, on beneficial ownership, seeks to set down in legislation an obligation to implement, within 12 months of the Bill getting Royal Assent, our commitment to establishing a public register of company beneficial ownership of overseas companies that own or buy property in the UK. The UK was the first country in the G20 to establish a public register of company beneficial ownership, and Transparency International concluded that we are one of just three G20 countries with a “very strong” legal framework around beneficial ownership.

Let me be clear to the House that the Government are committed to establishing this register and to bringing increased transparency to UK property ownership. The Government committed in January to publishing a draft Bill before the summer recess, and we recently published our response to the call for evidence. We will legislate early in the next parliamentary Session to establish the register by 2021. We will be the first country to establish the register and it is important to get it right.

New clause 12 would require HMRC’s register of trusts that generate UK tax consequences to be published. Information held on the register is accessible to law enforcement agencies and allows them to readily draw together information on trusts, including offshore trusts, when they generate a UK tax consequence. However, trusts, unlike companies, do not have any independent legal personality in their own right. They are frequently established for legitimate and highly personal reasons, such as protecting assets for children or vulnerable adults. Placing this information into the public domain would infringe the privacy rights of trust beneficial owners and needlessly publicise the financial affairs of vulnerable people for whom trusts are established. I therefore ask Members not to press those amendments.

New clause 11 seeks to create a corporate criminal offence of failure to prevent money laundering, which is not necessary because of reforms to the anti-money laundering regime already in place. The proposed offence is substantively available in respect of firms regulated for anti-money laundering purposes by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which require regulated firms to have policies, controls and procedures to mitigate and manage risks of money laundering and terrorist financing. Failure to comply with these requirements is already a criminal offence.

--- Later in debate ---

[Helen Goodman]

Those two amendments were tabled by the SNP.

[John Glen]

I am happy to be corrected, and I apologise to the hon. Lady.

Amendment 29 relates to the procedure by which individuals or entities apply for licences and exceptions to be included in the regulations. Retaining the application procedures in guidance will give the Government the flexibility to update them as needed and to respond to stakeholder feedback.

The Government have tabled new clause 4 because we recognise the concern raised by the Independent Reviewer of Terrorism Legislation and the Joint Committee on Human Rights that the repeal of part 1 of the Terrorist Asset-Freezing etc. Act 2010 would remove the independent reviewer’s oversight of domestic counter-terrorism asset freezes. Government new clauses 15 to 17 and amendments 23 to 26 will provide the UK Government with the powers necessary to enforce UK sanctions regulations against ships in international and foreign waters. These powers will ensure adherence to the standards set out in relevant UN Security Council resolutions and provide protection against the transportation of dangerous and harmful goods in international waters. These provisions contain important safeguards on the use of these powers, including a requirement to have reasonable grounds to suspect that sanctions are being flouted before enforcement action can be taken as well as flag state and foreign state consent where relevant.

New clause 20, tabled by the hon. Member for Glasgow Central—I hope I have got that one right—would oblige the Secretary of State to lay a report before Parliament each year on the exercise of the powers in the Bill. We have a range of reporting requirements in the Bill already, including an annual report on the sanctions regulations in force, and further reports when sanctions are imposed or amended. In addition, new clause 3 sets out reporting requirements for regulations made under the human rights purpose. We consider it unnecessary, therefore, to add an additional report on top of these, given that the issues that would be addressed in the report would be mirrored by those already required in the Bill.

Amendments 3 to 6, also tabled by the hon. Lady, would require that every sanctions designation be comprehensively re-examined annually. We agree that sanctions should only be in place for as long as there are good reasons for them to be so, and the Bill contains a range of procedures to ensure that all our sanctions are subject to regular scrutiny and review. We believe that three-year comprehensive reviews, combined with a robust package of procedural safeguards in the Bill, will ensure that these standards are at least maintained, so we would ask that she consider not pressing her amendments.

New clause 10, tabled by the hon. Members for Bishop Auckland and for Oxford East, would require statutory instruments that are to be considered under the draft affirmative procedure to receive a positive recommendation from a House of Commons Committee before being laid. All secondary legislation to which it would apply requires affirmative votes before coming into force, and we believe that that negates the need for additional parliamentary scrutiny. Sanctions are a manifestation of the UK’s foreign policy. They are not stand-alone or independent initiatives. Indeed, a number of existing parliamentary Committees have considered, or are planning to consider, sanctions issues, including the House of Lords EU Committee and the House of Commons Treasury Committee. It is not clear why further layers of scrutiny are necessary or desirable.

Amendment 22 would remove the requirement for Ministers to publish a written statement of explanation if they did not comply with a reporting provision. I should make it clear that this provision does not in any way displace the statutory duty to report; Ministers who fail to comply with that duty must face the consequences, regardless of whether an explanation is given.

Amendment 1, tabled by the hon. Member for Glasgow Central, would mean that sanctions regulations could be created only when that was deemed “necessary” for the purposes of the Bill, rather than when it was deemed “appropriate”. For many years the use of sanctions has been an essential part of international diplomacy, to respond to threats such as terrorism or to change unacceptable or threatening behaviour. It is important for the Government of the day to have the flexibility to impose sanctions or not to do so, after a thorough review of the prevailing political situation. Changing “appropriate” to “necessary” would mean that the Government could consider sanctions only as the last resort.

Amendment 9 would require the legislative consent of the devolved Administrations for any sanctions regulation made under section 1, if that regulation included a consequential repeal of, revocation of, or amendment to any law created by those Administrations. The power to create sanctions regulations falls under matters that are reserved to Westminster, and that includes modifications consequential on those regulations. Under the UK’s constitutional settlement, foreign policy is a reserved matter. The Bill gives the Government the power to impose sanctions as a foreign policy and national security tool.

[Alison Thewliss]

I have already made this point to the Minister. I agree that the Scottish Parliament does not have the power to impose sanctions, but why do the UK Government want to say that we cannot do so when it is already clear that we cannot? Why should the Government revoke something that we cannot actually do?

[John Glen]

We contend that the amendment would change this part of the devolution settlement, and we have received no representations from the Scottish Government on it.

Amendment 21 would remove Ministers’ power to make consequential amendments, related to sanctions and anti-money laundering regulations, to existing primary and secondary legislation. That would remove the ability to ensure that the statute book works after sanctions have been imposed. The power is not unusual, and is confined to modifications that arise solely as a result of sanctions or anti-money laundering provision. In any case, regulations making such modifications of the statute book would be dealt with by the draft affirmative procedure, so both Houses would need to approve them before they could come into force. I ask the House to preserve that important power.

Let me make it clear that the Government support the principle of amendment 2, tabled by the hon. Member for Glasgow Central, which is to help prevent organised crime and human trafficking. Those are serious issues that we are strongly committed to tackling. However, as we have explained before, we do not think it necessary to state that sanctions regulations could be created for these purposes in the Bill, because it already provides the powers to impose sanctions in these cases.

Government new clause 5 is technical. It simply seeks to clarify the interaction of the powers in this Bill with the provisions of the European Union (Withdrawal) Bill. This Bill contains powers that enable the Government to amend retained EU law to impose or lift sanctions. The new clause simply makes it clear that restrictions in the European Union (Withdrawal) Bill do not prevent those powers from being exercised in the way that was intended.

--- Later in debate ---

[Sir Alan Duncan]

I will indeed.

We have had spirited discussions on many aspects of the Bill, both on the Floor of the House and in the Public Bill Committee. I thank in particular the Bill team, who have given up pretty much a year of their lives to work on every dot, comma and detail of the legislation. They have been dutiful, punctilious and hard-working. They have been burning the midnight oil and have put up with my occasional tetchiness—

[John Glen]

Really?

[Sir Alan Duncan]

Yes, really.

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

John Glen Excerpts

Tuesday 6th March 2018 Public Bill Committees

[Helen Goodman (Bishop Auckland) (Lab)]

It is nice to see you in the Chair again, Mr McCabe, in this much warmer Committee Room 12.

Clause 44 is a concession that the Government made in the other place because there was a lot of concern that they had not cracked on with making progress towards a register of beneficial owners of overseas entities—an extremely important part of the machinery for preventing money laundering. It is rather a pathetic clause, so the Opposition have tabled a new clause that would speed up the timetable, for reasons that I will explain when I move it. I want to register the fact that although we do not intend to vote against clause 44, we think it somewhat weak as a concession.

[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

--- Later in debate ---

Division 11

Ayes: 8

---

Labour: 7
Scottish National Party: 1

Noes: 10

---

Conservative: 8

[John Glen]

I beg to move amendment 8, in clause 47, page 34, line 38, leave out subsection (3) and insert—

“(3) Regulations under section 1 may amend the definition of “terrorist financing” in section 43(4) so as to remove any reference to a provision of regulations that is revoked by regulations under section 1.

(3A) Regulations under section 1 may amend the definition of “terrorist financing” in section 43(4) so as to add a reference to a provision of regulations under section 1 that contains an offence, but only if—

(a) each purpose of the regulations containing the offence, as stated under section1(3), is compliance with a UN obligation or other international obligation, or

(b) paragraph (a) does not apply but the report under section 2 in respect of the regulations containing the offence indicates that, in the opinion of the appropriate Minister making those regulations, the carrying out of a purpose stated in those regulations under section1(3) would further the prevention of terrorism in the United Kingdom or elsewhere.”

This amendment provides that regulations under Clause 1 may amend the definition of “terrorist financing” in the Bill to add a reference to an offence only where the purpose of the regulations containing the offence is compliance with a UN or other international obligation or a purpose related to the prevention of terrorism.

There are two purposes behind the amendment. The first is to allow us to update the definition of “terrorist financing” in regulations. The nature of terrorist finance has a tendency to change over time and it is important that we are able to update our counter-terrorism measures to take account of the changes. This will allow us to continue to maintain a robust counter-terrorism regime, while meeting our international UN obligations.

While that is crucial, we also seek to restrict the ability to add to the definition of terrorist financing in the second part of the amendment. The Government listened to the concerns expressed by noble Lords about the aims of the regimes and the need for a proportionate approach. Having engaged with noble Lords, we agreed to restrict the ability to add to the definition of terrorist financing. The definition may be changed only to comply with international obligations or to further the prevention of terrorism, as set out in the clause. If the amendment were not agreed to, we would be unable to update our terrorist finance regime to respond to changing events.

[Helen Goodman]

Of course, nobody thinks that we should not have effective measures to tackle terrorist financing. That is plain and there is an obvious consensus about that. There are two questions. First, is this the appropriate way to go about it? Secondly—I would like the Minister to elucidate on this a little further—could the Minister give us some examples of the kind of changes to terrorist financing, that are not caught at the moment, but that could be dealt with in regulations as the issues arose?

[John Glen]

I am grateful for that challenge. As I set out, the Government would only amend the definition when necessary to meet UN obligations to further the prevention of terrorism. The clause is designed just to give the scope to amend the definition of terrorist financing.

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

It is good to be here with you in the Chair, Mr McCabe. My reading of the Government amendment—maybe I have interpreted something wrong—is that it says,

“or a purpose related to the prevention of terrorism.”

[John Glen]

As I was about to say, the Government will be allowed to amend the definition only if it is necessary to continue to meet our new UN obligations or if it would further the prevention of terrorism in the UK or elsewhere.

The hon. Member for Bishop Auckland asked me to speculate on potential uses. That is difficult to do, by the very nature of these things, but, for example, we are seeing the use of cryptocurrencies such as Bitcoin. It may be that there is potential risk associated with that and there may be a need to include that, but I am making a speculative observation. It would depend on the circumstances, and what other jurisdictions and the UN were bringing forward.

Amendment 8 agreed to.

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

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to see you in the Chair, Mr McCabe.

I would like to reiterate the concerns that I raised on Second Reading about the overruling of any Acts made by the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly. I have a solution to this, to some degree, in amendment 37. That is coming up, so I will speak about it more then. However, I am deeply concerned that UK Ministers are being empowered in this Bill to make changes to devolved legislation without the involvement or the permission of the Scottish Government or the Scottish Parliament. That is deeply concerning. If not this Government, it makes future Governments capable of amending Acts of another Parliament and I remain deeply concerned about that.

--- Later in debate ---

[Helen Goodman]

The issue of the secret jurisdictions of the Crown dependencies and the overseas territories is extremely vexed. The Opposition are disappointed by what has happened, because we felt that considerable progress was made under David Cameron’s Administration on this matter. There are no Liberal Democrats on the Committee—they normally take credit for anything positive that happened when David Cameron was Prime Minister—but my impression from talking to Conservative Members is that many of them were strongly supportive of what the then Prime Minister promised.

I will remind hon. Members what was promised, go through what has happened and the current state of play, say something about why it matters, and then say something about both the counter-arguments and what we are proposing. The Government of the day committed to implementing a central registry of company beneficial ownership information at the G8 conference in Lough Erne in June 2013. It was truly a British initiative; I was criticised on Second Reading for not giving David Cameron credit, but I am not going to fall into that trap today.

The Companies House register contains information on people with significant control, meaning individuals who hold more than 25% of a company’s shares or voting rights. The Department for Business, Innovation and Skills published details of its intention to create such a register in a discussion paper called “Transparency and Trust” and then made a call for evidence. The Government passed the relevant primary legislation—the Small Business, Enterprise and Employment Act 2015—at the end of March 2015 and the new register went live in 2016.

The new register is very interesting. Searching for information at Companies House used to involve trolling through lots of papers without finding anything of interest, but now that we can see who is controlling companies, we can spend a very interesting hour finding out who owns what—we are all interested in companies in our constituencies. The register is not perfect, as will become evident when we debate other Opposition new clauses—there is no process for checking information, and 10% of the 4 million companies have not submitted the information—but it is a big, helpful step forward none the less.

In parallel with the new register, the then Prime Minister wrote to the overseas territories to encourage them to consult on a public registry and look closely at what we were doing in this country. Whereas progress in this country has been good, albeit not perfect, progress in Crown dependencies and overseas territories has been extremely limited. Let me explain the very different situations in each place.

In the British Virgin Islands, legislation is in place and a registry exists, but it is not public—a big weakness. There is information sharing with five or six regulatory or prosecuting authorities in this country, including the National Crime Agency, the Serious Fraud Office and Her Majesty’s Revenue and Customs. Those organisations can phone up and say, “We are suspicious about Bloggs, the Member for Salisbury South.”

[John Glen]

There is plenty going on in Salisbury at the moment.

[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.

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

John Glen Excerpts

Tuesday 27th February 2018 Public Bill Committees

[Alison Thewliss]

I agree very much with the amendments and support the hon. Lady in what she has said. I share the concerns that she has conveyed from both the NGO sector and the banking sector, where we seem to be caught between admirable public policy objectives—providing humanitarian aid—and the practicalities of sanctions compliance, which seems to be hindering the delivery of that aid in many different ways.

The amendments sensibly seek to expand a particularly narrow EU definition of humanitarian aid. That would give a wee bit more certainty and clarity to agencies working on the ground. It also gives us an opportunity to figure out how we ensure that money reaches those who need it and reaches them quickly. I understand that, at the moment, organisations can often wait up to six to nine months to get licences and agreements in place. Frankly, people on the ground in many of the countries involved do not have six to nine months to wait. They need money and aid almost immediately, so we need to find a way of fast-tracking the money in; we need to figure out what a viable financial route to get money from us here in the UK through to the frontlines in Yemen and Syria to ensure that people can survive looks like.

In Yemen particularly, there is a shortage of physical cash in the country. Hospitals in which people are working are often supported by the likes of Médecins Sans Frontières. MSF is paying those staff, but it needs to get the money into Yemen to pay them, so that they can turn up to work and feed their families, and provide vital assistance to people facing bombardment from the air. We need to find a way of getting the money in and doing that quickly.

There are practicalities involved in asking humanitarian agencies to go and carry out this work. Let us say that people are providing humanitarian aid on the ground; to move things around the country they need fuel. If they are in a country in which they have to choose between buying their fuel from Islamic State fighters or Assad, that is not actually a choice they can make, because both options would place them in breach of sanctions, so there needs to be a way of getting money to people and doing that quickly, so that organisations can do their work. If financial assistance has been granted to humanitarian organisations specifically for the purpose of buying fuel and then they cannot practically do that, that is a real problem and makes the delivery of much-needed aid extremely difficult.

There is an argument for granting up-front licences for infrastructure. If we know what is to be built—put in place—and it is a bridge that will allow people to cross it and move humanitarian aid around the country, or if it is a hospital or other facility that will provide aid, why cannot the licences be granted fast and up front, so that there is no delay in procuring the purchase of things to make that happen?

I agree very much with the points made by the hon. Member for Bishop Auckland about mutual recognition of licences. If we see fit to issue licences, that should be good enough for other countries as well. If we have gone through a due diligence regime, that should be good enough for other people to accept and would help speed up the process, and would prevent organisations from falling foul of someone else’s regulations. There should be agreement on that, whether in a treaty or some other form. It would be a hugely sensible way of speeding up the process.

I very much agree with the points that have been made on new clause 5. I understand that the United States has a huge amount of transparency around the exemptions and licensing regime. It is possible to see not only what has been licensed and how but the backlog to the licences, which is critically important because we can see delays in the process.

We need to understand why those delays are there and what we can do to overcome them. Frankly, people in different parts of the world cannot wait for us to go through a laborious process to issue licences. We cannot have those organisations spend huge amounts of money on lawyers. We just need to get the aid to where it needs to be with the best practicable due diligence.

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

It is a pleasure to serve under your chairmanship, Mr McCabe. I have listened carefully to the respective Front-Bench speakers and studied the three amendments and the new clause: amendment 18 on fast-track exceptions; amendment 19 on consulting on exceptions to disapply; amendment 20 on an exception for humanitarian or peace-building purposes; and new clause 5, which would require the preparation of an annual report on humanitarian and non-humanitarian exemptions.

I will speak to each in turn. Like my right hon. Friend the Minister for Europe and the Americas, I acknowledge the spirit in which they were tabled, but I will set out the Government’s position on why they are not necessary.

I will address the point about FATF immediately, because I have had some contact with it. FATF was set up by 16 countries after the 1989 G7 summit. It is not an incorporated or treaty body. It does not create binding obligations on the UK. The UK is a founder member and plays a leading role. I would reinforce that with this point. I recently received the Pakistani Home Secretary, who was seeking to persuade the Government to resist the greylisting of Pakistan for not making sufficient progress. That was clearly taken very seriously by the Pakistanis. I also acknowledge the work that is going on across Government in the UK to deal with the considerable challenge of the current evaluation of our own compliance with FATF standards. This is a robust, internationally recognised set of obligations that have real meaning and authority.

Many of the amendments have been debated in the other place and lobbied for by UK Finance and a number of NGOs, as the hon. Member for Bishop Auckland set out. I can assure the Committee that the Government remain a steadfast supporter of NGOs working in conflict areas. The Government engaged with them while the Bill was in the other place, and we will continue to do so. We recognise that it is important to ensure that this work continues, where possible, in sanctioned countries.

It is equally vital, however, that we have appropriate safeguards in place that preserve our foreign policy priorities, by ensuring compliance with sanctions, but also serve to protect the NGOs and help prevent the sector from becoming attractive to criminals looking to circumvent our laws.

Amendment 18 calls on the Government to establish a fast-track process for dealing with requests for exceptions and licences for humanitarian purposes. I can assure hon. Members that the Government make every effort to prioritise urgent and humanitarian cases, where there is a risk of harm or a threat to life, and will continue to do so. However, we believe that any prioritisation criteria for considering licences and exceptions must remain as flexible as possible, to ensure that the Government can consistently prioritise the most important cases, including humanitarian cases where appropriate.

The process for considering licences is best done administratively and on a case-by-case basis. Government Departments will, of course, continue to reach out to the NGO sector to ensure that NGOs understand how that process works for humanitarian licence applications. Given the number of Departments involved—typically four: the Foreign Office, the Home Office, the Department for International Trade and the Department for International Development—and the many rightly differing derogations, exceptions and grounds for licensing that are involved, it would not be straightforward to operate a fast-track process as suggested by the amendment. To get each application right demands a tailored approach, because the facts differ greatly from case to case. Therefore the Government believe that it would not be prudent to establish a single fast-track process, which may impede the Government’s ability to assess cases accurately, and will be unwieldy to operate given the different ways in which the various types of sanctions work.

A fast-track process might also create perverse results—such as where an urgent request for a licence to allow a designated person access to medicine would have to come second to a routine application in respect of humanitarian activity that only involves changing the details of bank accounts. For all these reasons, we do not consider that a new and administratively burdensome requirement ought to be added to sanctions regulations.

Amendment 19 suggests that a consultation be undertaken for an overarching framework for exceptions and licences. The NGOs and UK Finance have called for that, as the hon. Member for Bishop Auckland said.

It must be said that we have carried out a consultation on our White Paper, including roundtables with banks and NGOs. We are still talking to them and have set up a working group with them. We intend to use the opportunity to improve licences—such as general licences for humanitarian activity—and we will issue guidance. We have been clear that we will do that, and because of that consultation we do not feel that the amendment is necessary. We have listened to the comments of all respondents and we intend to design a post-Brexit licensing framework that is fully informed by those comments. That is an ongoing process and one in which we are enthusiastically engaged.

Comprehensive regulations that will be laid before Parliament and debated will include detailed information on the exceptions and licences that are appropriate for each regime. We also intend to continue to consult with industry to ensure that the framework allows us to be flexible and has the minimum possible effect on industry whilst having the maximum effect on the intended targets of the sanctions. An overarching framework for licences will not allow us the flexibility that we need for each regime. For example, the licensing grounds for a proliferation regime should be different from those of a misappropriation or counterterrorism regime. Furthermore, the timetable for conducting such a consultation after the commencement of the Bill makes little sense. By then, we expect that the relevant sanctions regulations—with the appropriate exceptions and licensing arrangements for each regime currently existing in EU law—will already have been made and debated by Parliament. We fear that a further consultation would add confusion at a time when we would be working hard to ensure a smooth transition.

The Government have committed in the Bill—clause 37 —to issuing guidance about sanctions regulations. As the guidance is developed, we will engage with stakeholders, as we already do for guidance that is published on the implementation of sanctions.

[Alison Thewliss]

Could the Economic Secretary give more clarity on the timescale? We have the Bill just now; how soon will the guidance appear? The current guidance is not really useful in terms of how the sanctions landscape works.

[John Glen]

I cannot give a precise timetable. I will consult officials and write to the Committee to give clarification on that as soon as I can.

Amendment 20 would make it plain on the face of the Bill that exceptions to sanctions can be made for humanitarian development, reconstruction and peace-building activities. Broadening such exceptions to cover such a broad group of organisations and activities goes much further than the Government intended and is incompatible with both the policy intent and our obligations under UN and EU regimes. The Government are currently able to issue specific licences on application from humanitarian and other agencies. The licensing provision is read across and extended in clauses 15(2)(b) and 14(3)(a) to allow Ministers to issue both general and specific licences. It is the Government’s intention to use the power to issue general licences where appropriate. One key area in which it is foreseen that general licences could be written is for the purpose of delivering humanitarian aid. We should also be wary of the confusion caused by listing these activities but not others, such as denuclearisation activities. To add one would imply that the other was outside the scope of the Bill.

--- Later in debate ---

[Anneliese Dodds]

I am grateful to the Minister for that explanation. I shall speak briefly on a couple of points.

First, the Minister helpfully stated that the Government do support NGO operations in countries subject to conflict. Will he be more explicit and state that the Government support NGO operations in countries subject to sanctions? That is exactly what we are talking about now. The concern for many in the development community is that the balance is currently towards a presumption against activities occurring in countries where there are sanctions, rather than that being feasible for those organisations when fulfilling international obligations, as we would expect.

Secondly, on amendment 18 on the fast-track process, I was encouraged by some of what the Minister said but was slightly concerned by the reference to the Government continuing current processes, with the suggestion that those are adequate. I have certainly received information, as I am sure other colleagues have—the hon. Member for Glasgow Central referred to some of this—on the impact of fuel sanctions. I understand that delays in getting appropriate licences and exemptions in relation to sanctions on fuel in Syria have led to farcical situations in which, for example, a hospital was destroyed before it was possible to get the fuel that would serve that hospital. The current system is not working at the moment. I wonder whether we may have more of a focus on not following existing practices, which clearly are not operating adequately.

The Minister suggested that the fast-track process would lead to some kind of inappropriate, one-size-fits-all system where, for example, a need for medicine in one situation could be trumped by humanitarian concerns. Surely medical needs could come under humanitarian concerns? What we are really talking about is the need for a fast-track approach to humanitarian peace-building action that will be interpreted sensitively and intelligently, but which could get away from the current impediments for NGOs.

[John Glen]

I am happy to address those points. I can of course confirm that NGOs in countries subject to sanctions are still able to access these provisions. On the hon. Lady’s point on the fast-tracking process, and the point on fuel sanctions, I said what I said in response to the amendments, but we are obviously living in a very imperfect situation, with highly challenging environments. It will not be possible to get things right every time, but I think the provisions in this legislation give us the best opportunity to do so. I think I have set out the Government’s position clearly.

[Helen Goodman]

The Economic Secretary is right that the situation is complex, and he is right that we do not want to add to the complexity with new requirements and new consultations. However, I am sorry to say that I do not think he has made the case for not accepting our new clause 5 on reporting to Parliament.

I want to draw the Committee’s attention to an article from The Guardian of 23 July 2014, which illustrates the problem. It is headed: “UK arms export licences for Russia still in place, despite claims of embargo”. It reported:

“More than 200 licences to sell British weapons to Russia, including missile-launching equipment,”

were still in place at the time,

“despite David Cameron’s claim in the Commons…that the government had imposed an absolute arms embargo against the country”.

I think we have seen a great reluctance on the part of the Government to be more open. What is going on with these sanctions, exemptions and licences is a highly sensitive political area. It seems to me that it would help the Government if we had more openness. We could then have arguments about what was really going on, not about what people might surmise or imagine. I wish to press new clause 5 to the vote.

[Helen Goodman]

I do not want to press amendment 18. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Clause 16 ordered to stand part of the Bill.

Clause 17

Enforcement

[John Glen]

I beg to move amendment 4, in clause 17, page 16, line 12, at end insert—

“( ) Regulations—

(a) may create criminal offences for the purposes of the enforcement of prohibitions or requirements mentioned in subsection (2)(a) or (b) or for the purposes of preventing such prohibitions or requirements from being circumvented, and

(b) may include provision dealing with matters relating to any offences created for such purposes by regulations (including provision that creates defences).

( ) Regulations may not provide for an offence under regulations to be punishable with imprisonment for a period exceeding—

(a) in the case of conviction on indictment, 10 years;

(b) in the case of summary conviction—

(i) in relation to England and Wales, 12 months or, in relation to offences committed before section 154(1) of the Criminal Justice Act 2003 comes into force, 6 months;

(ii) in relation to Scotland, 12 months;

(iii) in relation to Northern Ireland, 6 months.”

This amendment enables sanctions imposed by regulations under Clause 1 to be enforced by criminal proceedings, and limits the terms of imprisonment that such regulations can allow to be imposed for breach of sanctions.

[The Chair]

With this it will be convenient to discuss amendment 21, in clause 17, page 16, line 36, at end insert—

“(8) An appropriate Minister must publish guidance from the Crown Prosecution Service on when it is in the public interest for a breach of a sanctions regulations to be prosecuted.”

This amendment would require the Government to publish guidance on when it is in the public interest for a breach of sanctions regulations to be prosecuted.

[John Glen]

The offences provisions are perhaps the most important amendments that we need to debate today, following the Government’s defeat in the other place. Hon. Members should be aware that without the fullest set of enforcement measures available to deal with breaches of sanctions, the UK will not be able to ensure effective implementation and enforcement of sanctions. That would make what are currently key foreign policy and national security tools virtually toothless, and therefore redundant.

It is important to recognise right at the start that the concerns in the other place were not about whether there should be criminal offences for breaching sanctions; it was accepted that there was a need for these offences. What was at issue was the circumstances where Parliament could properly give to Ministers the power to create offences. The Government have listened to those concerns. We understand them and these amendments address them.

Currently, EU sanctions against countries such Russia and Syria are imposed through EU legal Acts. These require member states to put in place enforcement measures at national level. In line with that requirement, the UK routinely creates criminal offences for breaches of sanctions by way of statutory instruments made under powers in the European Communities Act 1972 as modified by the Policing and Crime Act 2017, as well as other legislation such as the Export Control Act 2002. The Government therefore want to maintain continuity in this area by reproducing the powers available under existing legal frameworks for enforcement across the various forms of sanctions in the Bill.

Since the defeat in the Lords, Government officials and lawyers have worked with Lord Judge and others to seek a legislative solution. That has been a deep and meaningful dialogue, and I must express my gratitude to Lord Judge for his engagement in seeking to find a way forward. We believe that can be found in amendment 4, the enhanced procedural requirements, which we will debate later, in new clause 3 and the corresponding offence provisions for money laundering. The Government believe that combination of measures is the best solution to meet the concerns expressed in the other place while being practical to implement, which I think was the intention of those who raised the concerns.

The amendment restores to clause 17 the provisions to create sanctions offences in regulations. It provides for the enforcement of any prohibitions and requirements, to provide for criminal consequences if they are contravened or circumvented. The clause also provides for maximum penalties for breaches of sanctions in regulations. The provision states that regulations may not include offences with maximum penalties greater than 10 years’ imprisonment, which is in line with the maximum penalty available through the 2002 Act, and for offences other than trade sanctions we do not intend to create penalties greater than seven years’ imprisonment, in line with current practice. The clause should be read alongside the safeguards in new clause 3, which I will discuss later.

Even with the safeguards that we plan to introduce in new clause 3, the Government remain very aware that creating criminal offences and setting penalties in regulations is a serious matter, not to be undertaken lightly. I am therefore happy to repeat assurances given in the other place. First, no Government would ever create criminal offences for trivial matters. The powers detailed in clause 17 would be used only to create offences within the categories of offences that already exist for breaches of sanctions, breaches of licences and breaches of disclosure or information requirements. Secondly, Ministers should not use these powers in a way that is incompatible with the basic and fundamental rights of people in the UK—section 6 of the Human Rights Act 1998 expressly forbids it. Thirdly, as I said before, regulations under the Bill cannot create offences for trade sanctions with maximum penalties greater than 10 years, and we do not intend to create offences for financial sanctions and other types of sanctions with maximum penalties greater than seven years.

We have listened to the concerns expressed in the other place, and we have tabled amendments to introduce controls on the use of this power. As I said, I will speak to those amendments later in our consideration in Committee. In conclusion, the amendment will restore our ability to enforce sanctions by reintroducing the provision to create criminal and civil offences and penalties that are proportionate to the scale and nature of sanctions breaches and still effective as a deterrent. It should be read together with the enhanced procedural safeguards in new clause 3, which directly addresses the concerns raised in the other place.

[Helen Goodman]

I was very disappointed, but not surprised, when I saw that the Government had tabled this amendment before the weekend. I anticipated that they might seek to reverse one of their defeats in the Lords. I think it is striking that the Government are seeking to reverse amendment 45 from the other place, when they lost the vote on that amendment by 80 or 90 votes. It was not a narrow little thing. The amendment in the other place was moved not by some party hack, but by the former Lord Chief Justice of England and Wales. He made a number of speeches about the excessive use of Henry VIII powers.

--- Later in debate ---

[Alison Thewliss]

I echo that. We are also very worried by this amendment, and by the return of something that was clearly and definitively rejected. As far as we are concerned, it is dangerous and an affront to democracy. The Government should accept that they were wrong, and withdraw the amendment. I point out that the Lords Constitution Committee said:

“We consider that such regulation-making powers are constitutionally unacceptable and should not remain part of the Bill.”

The Government should take heed.

[John Glen]

I am grateful for the dialogue with hon. Members on the Front Bench, and I will respond to some of the points that have been made. On the question of whether there is some sort of secret plot to hide any conversations with Lord Judge, Government lawyers have had a number of meetings. No letters have been exchanged, so there is no material to share. The vote was lost by 192 votes to 209; I concede that it was lost, but the thrust of the remarks by the hon. Member for Bishop Auckland concerns the notion that behind the measure is some kind of power grab by the Government. I see it as the Government needing to be accountable for how these powers create new offences and how they are used. New clause 3 will require the Government to lay a report before Parliament, setting out what criminal offences are included in any new sanctions regulations.

Centenary of the Balfour Declaration

John Glen Excerpts

Wednesday 16th November 2016 Westminster Hall

[John Glen (Salisbury) (Con)]

When I asked a Palestinian official why several thousand greenhouses had been destroyed during that period, I received the reply, “We were very stupid to do so.” That great opportunity was squandered. Does my hon. Friend agree that that was surprising?

[Caroline Ansell]

Yes, indeed, that was an opportunity. I think, with the benefit of hindsight, how different things might have been.

Instead of participating in face-to-face talks, the Palestinian Authority have chosen to pursue unilateral measures in the international arena, but unilateralism is the rejection of the peace process, not a means to revive it. Worse yet, the Palestinians remain divided, with fierce internal rivalry between Hamas and Fatah. Following the recent cancellation of the long overdue local elections, it does not seem that the two camps will come together anytime soon.

Report of the Iraq Inquiry

John Glen Excerpts

Wednesday 13th July 2016 Commons Chamber

[John Glen (Salisbury) (Con)]

It is a pleasure to follow the hon. Member for Birmingham, Selly Oak (Steve McCabe), a colleague on the Work and Pensions Committee.

In six minutes I will not be able to do justice to 2.6 million words delivered just seven days ago, but I want to draw three reflections from what I have read over the last week and what I have studied over the last several years.

The hon. Member for Birmingham, Selly Oak spoke about a brave choice but the wrong choice. I do not want the substance of my remarks to be what the former Prime Minister did; I want to focus on what Government must do differently next time. The lessons of Chilcot need to be absorbed across the whole of Government. There are massive issues in terms of the deference to the US and the assumptions made about what was happening when in fact it was not. There was a misunderstanding about the reality on the ground and an abuse of process in the way the decision was made.

We have got to get this right. I acknowledge what the outgoing Prime Minister has said on the establishment of the National Security Council, the national security adviser, and the creation of a conflict, stability and security fund. Those are sensible measures to try and mitigate the risks around a decision being made at the behest of our largest and most powerful ally. But what actually happened back in 2002 and 2003 was the abuse by a Prime Minister of the processes of government, by moving the decision more quickly without presenting the evidence clearly. As Members of Parliament, we want to be able to say that we make decisions in the knowledge of all the information that we should reasonably have at our disposal. It is imperative that we make decisions in that way in the future.

We need to resist making decisions before the evaluation of the implications has been completed. I do not say I could have known exactly what was going to happen and therefore would have made a different decision from that the House collectively made in 2003. The media will always focus on atrocities and the risks associated with not acting, and there will always be a short-term risk to lives, but the danger is that if we do not commission officials to systematically evaluate the different options, incorporating a detailed analysis, as Chilcot’s summary says, and look at the capabilities we have before making a decision, we are not putting ourselves in the best place to make the decision in the right way. It seems to me that the collective view is likely to be optimistic. We can always be persuaded in the face of the authority of Government to move forward at their urgings, and unless we have that evidence presented to us, we will not be in the position to do so.

The most striking conclusion of the Chilcot report for me is the lack of preparation for what came after. In 2014-15, I had the privilege of doing the Royal College of Defence Studies senior course, alongside senior officers. When I spoke to them privately, they confirmed there had been no expectation that Saddam would be toppled as quickly as he was, and no understanding of what would be required afterwards. The Chilcot summary states:

“UK officials recognised that occupying forces would not remain welcome for long”.

It also states that

“the best possible appreciation of the theatre of operations, including the political, cultural and ethnic background”

was a “fundamental element” of “vital importance” which was “lacking”.

There seems to have been a complete failure on the part of the Government, as well as a complete lack of collective analysis by our military, our intelligence services and our politicians, in not asking really searching questions, given the obvious challenges relating to culture and religious history and the social problems that would inevitably be unlocked as a consequence of the lack of government following the fall of Saddam. The failure to carry out that analysis or to establish a credible plan was the real failing, and that must never be allowed to happen again. Having had a week to reflect on this, I believe that Governments must behave differently. I welcome the changes that have taken place, including the fact that Ministries now work more closely together, but we cannot allow a Prime Minister to wield such authority again without a degree of scrutiny of the detail. Information must be made available more widely to the House.

China (Human Rights)

John Glen Excerpts

Thursday 22nd October 2015 Commons Chamber

[Mr Speaker]

We are immensely grateful to the Minister of State for looking after two thirds of the world, as he puts it. The right hon. Gentleman is not understated on the matter. It is on the record, and we are deeply obliged.

[John Glen (Salisbury) (Con)]

While I welcome the commitment of the Minister and the Government to greater intimacy between this country and China in economic terms, the concern of many people in this country is that we rest on carefully crafted diplomatic language when it comes to discussing human rights. We may have an architecture for dialogue, but people are looking for delivered change and a fundamental change in attitude. What will happen if there is no discernible change in outcomes and between what the Chinese say to us and what they practise? What sanctions or actions will the Government take?

[Mr Swire]

I subscribe to the words that

“persuasion and dialogue achieve more than confrontation and empty rhetoric.”

Those are not my words; they are the words of the Prime Minister—[Interruption.] Yes, the Prime Minister of the time—Tony Blair, in October 1998.

Oral Answers to Questions

John Glen Excerpts

Tuesday 14th July 2015 Commons Chamber

[Mr Swire]

The focus should be on improving relations, but it should also be on improving the democratic space. The trial of the former President was very rushed and appeared to contravene the Maldives’ own laws and practices, as well as international fair trial standards. That is currently being looked at.

[John Glen (Salisbury) (Con)]

I urge the Minister to resist complacency on the Maldives, particularly given that the current regime seems also to be a recruiting sergeant for ISIL in the Maldives. There will come a time when the Government will need to stand clearly on the right side of the argument and intervene more fully to secure justice in that country.

[Mr Swire]

I hear what my hon. Friend says, but I do not think we can be accused of complacency. I recently raised the Maldives again with the Commonwealth Secretary-General, the Indian Foreign Secretary and the US assistant Secretary of State. Both my right hon. Friend the Prime Minister and I have met Mr Nasheed’s wife, and Amal Clooney and other members of Mr Nasheed’s legal team, to discuss the situation. We are closely involved.

Britain in the World

John Glen Excerpts

Monday 1st June 2015 Commons Chamber

[Dr Lewis]

While not disagreeing with my hon. Friend, I am trying to explain to the House the means of conducting the review. That is the point I am interested in—not the way in which Labour may afterwards have carried out its defence and foreign policies, about which I would have a large measure of agreement with my hon. Friend. The fact is, it is one thing to fail to live up to a good plan, but it is another not to have a good plan in the first place; and if we want to have a good plan, we need to take our time over the strategic defence and security review, and not rush it, and not simply say, “You’ve got X amount of money; how much defence can you give us for that sum?”

I want to say a quick word about NATO and deterrence. We have heard a lot about the 2% and I do not intend to waste the House’s time by reiterating the arguments we have all heard many times, but I would just make one point on the subject: the 2% is not a target, it is a minimum, and therefore there should be no question of our failing to meet the minimum. The question is how much above that minimum we can safely manage to use as the basis for the future shape and size of our armed forces.

[John Glen (Salisbury) (Con)]

But does my right hon. Friend not acknowledge that perhaps the bigger challenge is the fact that 26 members of NATO are nowhere near meeting the 2%, so, regardless of what we do, is it not imperative that we influence those other nations to reach that commitment in the first place?

[Dr Lewis]

That is a very good point, because even when I said that it is not a target but a minimum I was debating whether to add the sub-clause “but it is of course a target for those countries that have not even met it.” My hon. Friend is absolutely right: if we stop what we have done consistently, which is comfortably to meet, and indeed exceed, that minimum, what sort of a disincentive is it to other states—for whom it is an aspiration yet to be achieved—when they see we are beginning to lose our grip of our own hitherto much more successful allocation of resources to defence?

We should also remind ourselves that every Government say defence is the first duty of Government. If so, it does not make sense to ring-fence other areas of Government and not to protect defence. If we are going to do that, then come clean and say, “Okay, it isn’t the first duty of Government any more” and try to defend taking that position. I do not like this selective ring-fencing of different Departments. A Government ought to have the guts to order their priorities, to set them out, and to stand up in the House of Commons and defend them.

Finally, I just want to say a word about deterrence. I am talking not about nuclear deterrence—unless provoked, the word Trident shall not pass my lips—but about deterrence in the context of the very sad situation whereby Russia, whom we all hoped would continue down the democratic path, has decided to revert, if not to a permanent type, to a type that was all too familiar to us during the cold war years. We see that not only in its behaviour in Ukraine but in the way in which opponents of the regime are being assassinated. We recently had the assassination of Boris Nemtsov, and now we find that Vladimir Kara-Murza, who was a close associate of Boris Nemtsov, has been suddenly struck down with a very serious and undiagnosed illness and is now fighting for his life in a Moscow hospital. Those are not the features that we wish to see in a modern state that wants to play its part on the world stage; they are more of a reversion to a type of regime that held the world at bay for more than 50 years. We hoped that we were entering a new era after the events of 1989 and 1991 so, when we are deciding our priorities, let us remember that in the dark years of the cold war we thought it necessary to spend between 4% and 5% of GDP on defence. I am not calling for that now, but I am certainly calling for us comfortably to exceed the NATO-recommended minimum. I hope that mine will not be the only voice on either side of the House, and I am sure it will not be, saying that we must meet that obligation and carry out our commitment so that the peace that Europe has enjoyed for so long can continue indefinitely.

Iran (Nuclear Talks)

John Glen Excerpts

Tuesday 25th November 2014 Commons Chamber

[Mr Hammond]

No.

[John Glen (Salisbury) (Con)]

I welcome the Foreign Secretary’s determination to make progress on the nuclear issues, but will he reassure the House that he will continue to stand up for persecuted religious minorities in Iran—in particular Pastor Saeed Abedini, who has been locked up for two years without access to legal representation or medical treatment under this brutal regime?

[Mr Hammond]

Yes. Iran’s human rights record is poor, to put it mildly, and while there have been some limited steps in the right direction, it is clear that a huge amount remains to be done. We do raise human rights issues with the Iranians on a regular basis. My hon. Friend is right to draw attention to the particular problem of religious persecution and the unwarranted imprisonment of those practising minority religions in Iran.