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

Lord Benyon Excerpts

Thursday 1st March 2018 Public Bill Committees

[Helen Goodman]

On this very cold morning, Dame Cheryl, I am grateful to you for allowing me to keep my overcoat on.

Amendment 1 and its consequential amendment, amendment 2, are Magnitsky amendments. I think by now hon. Members understand what they are all about: they would enable us to sanction people who have committed gross human rights abuses. Very briefly, the history is that Sergei Magnitsky, a Russian lawyer who uncovered and tried to expose a big tax fraud, was imprisoned and tortured for a whole year and finally beaten to death. After his death, he was tried for tax fraud, which was obviously completely ridiculous.

I draw Committee’s attention to the wording of amendment 2, which covers not only the perpetrators of torture but the people who manage it and give the orders. Once upon a time, people used to make the excuse, “I was only following orders,” but nowadays we more often hear, “I am only giving the orders,” which is really not acceptable. In the amendment’s definition of “conduct”, we have therefore included

“directing, or sponsoring, such activities…profiting from such activities, or…materially assisting such activities”,

including by providing goods or services. In other words, the amendment covers those who turn the thumbscrews, those who order others to turn them, and those who supply them.

Similar legal provisions have been made in other countries. The Government argued on Second Reading that such a provision would make no difference,but we have seen the Magnitsky list of people who have been sanctioned in the USA but whom we have not sanctioned. It includes a man called Maung Maung Soe, one of the Myanmar generals responsible for the genocide, ethnic cleansing and serious abuse of the Rohingya over the past few months. To be honest, I do not understand why the Government did not say on Second Reading that they thought such a provision was absolutely fine and they agreed with it. Everyone is appalled by such human rights abuses and we do not want to provide any comfort to people who commit them, so I am really puzzled.

I am further puzzled because the Government agreed to include similar provisions in the Criminal Finances Act 2017. The Minister for Security and one of the Justice Ministers, I think—people keep being reshuffled, so I am not sure—argued strongly for such provisions to be included in that Act, so I do not grasp why the Government do not want them in the Bill. The Minister said on Second Reading that the Home Office can ban people and that those provisions are adequate. It is not clear to me that the Home Office has banned the people on the American Magnitsky list, so I am uncomfortable relying on that process. That is why we tabled these amendments.

Amendment 13 is about serious organised crime and trafficking. Amendments 1 and 2 would amend the part of the clause that relates to the purposes for which sanctions can be imposed. We think that serious organised crime and trafficking should be included, because it, too, is a long-standing problem. We had the cockle pickers who died on the beaches of Morecambe bay, and we discussed on Tuesday the hundreds of thousands of people in Libya. The National Crime Agency estimates that between 10,000 and 13,000 people are trafficked into this country every year. One of my constituents was trafficked into this country as a 10-year-old and forced to work in a cannabis farm. The Government are very firm on modern slavery, but they do not seem to want to see it through in other legislation. I do not intend to press amendment 13 to a vote, but the Government need to be a bit more thoroughgoing, consistent and comprehensive when it comes to the victims and perpetrators of serious organised crime and trafficking.

[Richard Benyon (Newbury) (Con)]

It is a great pleasure to speak in this important debate. I pay tribute to the hon. Member for Bishop Auckland for what she said. I have been involved for some time in the campaign to get the equivalent of the American Magnitsky Act into UK law. It was a considerable surprise to find myself on the Committee—it may have been a surprise to others, too—but it is nevertheless a delight.

To start, I will use the words of David Cameron. In a recent speech to Transparency International, he said:

“One of my regrets of my time in office was that we didn’t introduce the Magnitsky Act. The Foreign Office argument was that Britain’s existing approach was better, because we could sanction all the people on that list—and more besides. And I went along with it.

But I soon realised this ignored the advantages of working together—with other countries—under a common heading. It’s not PR, it’s a fact. You get extra clout from coming together across the world and saying with one voice to those who are responsible for unacceptable acts: ‘We are united in our action against you.’

I pay tribute to my successor Theresa May for adding Magnitsky provisions to the recent Criminal Finances Act. And I also pay tribute to someone who has fought longer and harder and at more risk to himself than anyone else—the man behind that campaign, the legislation and a brilliant book, ‘Red Notice’, on it, Bill Browder.”

It has been a great privilege for me to get to know and work with Bill in his fearless efforts to get equal provisions and consistency. International organised crime is more fluid today than ever, with the ability to move money and take advantage of different activities and opportunities. There are two central reasons why those criminals come to the United Kingdom. One is that we have a prosperous economy with good property and intellectual property rights and a large percentage of the world’s financial institutions based here. The other, to be perfectly honest, is that the kinds of people we do not want investing in our economy—the fellow travellers of the criminals, be they lawyers, accountants or other financiers, who are able and willing to work with them—can exploit gaps and make investments in this country. David Cameron said, with typically honest, self-effacing candour, that the position that has been taken for so long by the United Kingdom Government is that adequate provisions apply. However, we know that they have not been applied.

I pay tribute to the hon. Member for Bishop Auckland. I will always remember her rage of two days ago, and there will be times when I try to find my inner Helen Goodman. However, I have say to her that the last 48 hours have been extremely beneficial to me—I hope they have also been beneficial to the Bill—because they have allowed me to spend a lot of time with human rights lawyers who have brains that are infinitely bigger than mine, and an understanding of international law and human rights law that is infinitely bigger than mine, and to spend time with the Minister for Europe and the Americas, and his officials. I know there is a public perception that the process involves thumbscrews and all kind of threats, but I think the system knew that I, as somebody who has no ambition, was not persuadable on anything.

We have to get this right, and there are two areas of consistency that we need to achieve. First, as I have already mentioned, the Bill that receives Royal Assent must be consistent with similar legislation that has been brought in by other jurisdictions abroad. Secondly, the Bill must be consistent with our own judicial system. I was on the verge of supporting the hon. Lady, had her amendment been tabled at an earlier stage. However, I have a few suggestions that I hope my right hon. Friend the Minister might be able to support.

There are two key elements of Magnitsky: the one we are debating now—essentially, it concerns definitions and a few other bits—and the review structure, which we will talk about later today. A good Magnitsky amendment, of the sort that I would like to see, would put into the Bill a definition of gross human rights abuse. Such a definition is, at present, absent from the Bill, which only refers to generic, undefined

“international humanitarian and human rights law”

and respect for human rights and their promotion. It does not contain any specific requirement for sanctions or accountability for human rights violations.

[Victoria Prentis (Banbury) (Con)]

I ought to declare an interest as a human rights lawyer, but certainly one whose brain is no bigger than, and probably nothing like as big as, my right hon. Friend’s. I was confused by the repetition of “gross human rights abuse” in amendment 2, and I am concerned that the fact that it appears several times will encourage future readers and users of the legislation to define it differently in each case. Does that concern him?

[Richard Benyon]

My hon. Friend makes a valid point, which I was coming on to. When we talk about consistency across our judicial system, definitions are important. If we have differing definitions in similar types of Bills that seek to achieve similar things, courts can be worked by clever lawyers to try to find a hole through which to escape. Consistency here is therefore really important.

The people behind the Magnitsky campaign tell me that they would be happy with a definition that accorded with section 241A of the Proceeds of Crime Act 2002. If my right hon. Friend the Minister could assure us that in the few weeks before Report he can produce an amendment that satisfied that requirement, we would have consistency across law. That seems important.

I entirely accept what the hon. Member for Bishop Auckland says about the kind of people we are talking about. One of the many brave people I have met in the campaign is Vladimir Kara-Murza, who has survived being poisoned twice and now works fearlessly for Open Russia. He says that this element of the Bill is the most pro-Russian piece of legislation we could make: it is about helping honest, decent Russians and holding back the chances of the corrupt, wicked people who have made their lives such misery. It builds on what my hon. Friend the Member for Esher and Walton (Dominic Raab) did in driving through the amendment to the Criminal Finances Act 2017, for which he deserves credit.

As the Minister knows, I have been prepared to support amendments that we are debating today, but after burning much midnight oil I suggest to the hon. Lady that consistency is very important, and the two differing definitions could allow for confusion.

[Helen Goodman]

I have the Criminal Finances Act in front of me, and I am a little unclear as to where the inconsistency is. The conditions in that Act are about:

“a public official, or a person acting in an official capacity…instigating the conduct, or in consenting to or acquiescing in it”,

with conduct connected

“with the commission of a gross human rights abuse…acting as an agent…directing, or sponsoring, such activities…profiting from such activities, or…materially assisting such activities.”

That seems to be the same wording as in the amendment, as does

“provides goods or services in support of the carrying out of the activities, or…otherwise provides any financial or technological support in connection with their carrying out.”

I cannot quite understand where the inconsistency is, but I am sure the right hon. Gentleman can tell us.

[Richard Benyon]

I am reliably informed that there are inconsistencies. I suggest that, for simplicity, if the Bill were to say that any reference to “gross violation of human rights” is to conduct that constitutes, or is connected with, the commission of a gross human rights abuse or violation, and whether conduct constitutes or is connected with a commission of such an abuse or violation is to be determined in accordance with section 241A of the Proceeds of Crime Act 2002, we would have the consistency that the campaigners—and, I think, the Government—seek.

I understand that the Government want to achieve this. They want to see the full Magnitsky on the statute book. This suggestion offers a way of making sure that we get the definitions right.

[Alex Chalk (Cheltenham) (Con)]

It is a pleasure to serve under your chairmanship, Dame Cheryl, and to follow my right hon. Friend the Member for Newbury. There is no one in this House who has done more than he has to prosecute this matter. I am also grateful for the contribution from the hon. Member for Bishop Auckland.

Although I am entirely sympathetic to the Magnitsky principle, there are three reasons why, on careful textual analysis, amendment 2 is flawed—not just a bit, but quite significantly—and should therefore be rejected. That should not be taken in any way as a disagreement with the principle, but it echoes the point, which has already been made, that we have got to get this right.

The overarching point is that, although the amendment intends to transpose the substance of section 241A of the Proceeds of Crime Act 2002, as amended by section 13 of the Criminal Finances Act 2017, which the hon. Member for Bishop Auckland referred to, there are three errors in the transposition that will cause confusion, hold back the Magnitsky principles and create a field day for lawyers.

First, in the context of defining a gross human rights abuse or violation, amendment 2 would insert subsection (6B), which says,

“The first condition is that the conduct constitutes the torture of a person or a group of people”.

The expression “a group of people” is not to be found in the 2002 Act, which is the UK’s primary criminal financing legislation and allows for civil recovery of cash on the basis of non-conviction proceedings. Property can be forfeited irrespective of whether a person has been convicted. That is the key piece of legislation, but the amendment contains a crucial inconsistency. The insertion of “a group of people” creates a problem, because lawyers will look at it and say, “Why has Parliament inserted that here, but not in the Proceeds of Crime Act?”

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As drafted, the Bill already provides the powers to impose sanctions in such cases. If we were obliged to tackle serious or organised crime under an international obligation, clause 1(3)(a) would allow us to do so. If we wished to tackle it in the interests of national security, subsection (2)(b) would allow us to do so. If we desired to tackle it as a foreign policy objective, subsection (2)(d) would give us the power to do so. It is not necessary, therefore, to add an additional purpose. To include unnecessary detail in the Bill could create confusion about the effect of those purposes.

[Richard Benyon]

I am grateful to my right hon. Friend for his remarks. My hon. Friend the Member for Cheltenham and I have gone quite a long way in looking at an alternative definition that would meet the requirements of the Magnitsky standard and that is consistent across our judicial system. Does my right hon. Friend support that direction of travel, and will what he commits to bringing forward on Report satisfy those who have campaigned on the matter for a long time?

[Sir Alan Duncan]

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

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[Helen Goodman]

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

[Richard Benyon]

May I assure the hon. Lady that I am not a lone voice in my party? In fact, quite the reverse. There are a lot of people and a head of steam now on these issues. If we get to Report and we are not satisfied, we are prepared to vote accordingly. I will continue to work with her, as I will continue to work with the Government, to make sure we get the measures we need.

[Helen Goodman]

I appreciate the right hon. Gentleman’s offer. I think that the Committee can take a decision in principle. I am not trying to prevent debate on the Bill—far from it. It was the Government Whip who did that on Tuesday, so I am certainly not going to have that laid at my feet now. We can come back to the matter on Report in the way that the Minister suggests, but I would like—

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[Helen Goodman]

I am grateful to the hon. Lady for her remarks. Let me give a couple of examples about two different sanctions regimes where the content of sanctions and object of the sanctions are quite different. Sanctions on the Democratic People’s Republic of Korea are aimed at preventing it from developing weapons of mass destruction. That is a really big foreign policy objective for all of us. Nobody wants the proliferation of nuclear weapons, and not in that region; it is an extremely destabilising occurrence. At the same time, we need a parallel diplomatic strategy. The South Koreans are doing quite well on that following the Olympics, with efforts to shift the discussion from sport to politics. I am not absolutely clear what the Government’s view is on the exit strategy and precisely what changes in behaviour they want. This has been difficult and fraught and the Government have made serious efforts at the UN, but we are trying not to starve the North Korean people, who anyway have an extremely low standard of living and a horrible quality of life; we are trying to stop the regime from developing weapons of mass destruction.

The situation in Myanmar and its risks and problems are different. Those sanctions are aimed at preventing the ethnic cleansing of Rohingya and ensuring their safe, voluntary and dignified return to their homeland in Rakhine state. We want the UN to be able to oversee that return and the full implementation of the Annan commission recommendations. Again, we are trying to influence the regime to do something. We have an aid programme to other parts of Myanmar and we are not trying to undermine that, but we want to shift the military, which is why the position of Her Majesty’s Opposition on sanctions on Myanmar is different from the Government’s position. We agree on the North Korean sanctions, but not on Myanmar, because we would like the sanctions to cover the whole of that part of the Myanmar economy that is controlled by the military.

Those two examples show that different problems need different approaches. We need to be clear about that. We will be better at running our foreign policy if we are clearer. This co-operation was very strongly commended by UK Finance, which is the collaboration between banks and financial service providers. For them, life just becomes extremely difficult if we do not have the same approach as the Europeans and the Americans. They have said to us that they want us very much to maintain our integration with the EU on our sanctions policy, because they are worried that if we were to have a different tweak here and there, other international finance actors would be very risk averse, and would not want to put money into British banks and then find that they were suffering second round sanctions, particularly from the Americans.

To be honest, I thought that the speech the Foreign Secretary made on Second Reading—it was typical of him—did not really take that into account. It began and ended with a lot of Brexity rhetoric, but it did not really focus on the detailed policy reality of what to do when we are operating sanctions. He said:

“The Bill will give us the freedom to decide on national sanctions as we see fit”.—[Official Report, 20 February 2018; Vol. 636, c. 77.]

He went on to say that “Britain can act independently”, that we will have “freedom of manoeuvre”, be an independent global power, and be able to

“exert our rightful influence on the world stage”.—[Official Report, 20 February 2018; Vol. 636, c. 80.]

The thing about this is that we can and we will, but the truth is that we do that much better by collaborating with other countries. Everybody knows that sanctions are much more effective when we co-operate with other countries. That is why we included paragraph (e) in this amendment.

[Richard Benyon]

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

The amendment calls for a memorandum that would show

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

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

[Sir Alan Duncan]

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

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

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

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