Sanctions and Anti-Money Laundering Bill [HL]

Lord Collins of Highbury Excerpts

Committee: 4th sitting (Hansard): House of Lords
Tuesday 12th December 2017 Lords Chamber

Moved by

[Lord Collins of Highbury]

73: Clause 45, page 30, line 21, leave out paragraph (a)

[Lord Collins of Highbury (Lab)]

My Lords, I will wait a moment while the Minister gets into his listening mode. This amendment picks up points which have already been addressed in Committee relating to the principles of parliamentary scrutiny. Your Lordships’ Constitution Committee said that,

“given that the purpose of the Bill is to address the need for domestic powers to impose, amend and revoke sanctions after Brexit, it is important to ensure that there are sufficient safeguards and there is adequate parliamentary scrutiny to make the delegated powers constitutionally acceptable”.

I know that the Minister will say: “We are doing precisely that. We are using the affirmative procedures”. This probing amendment seeks to increase the level of parliamentary scrutiny so that powers cannot be used until there is a positive vote by Parliament. It is important that we do not walk blindly into a situation whereby we give the Executive powers that cannot be amended, considered or changed. The Minister may say that the necessary scrutiny powers will be used and that they are in the Bill, but why does he not accept that we need the highest possible level of scrutiny? Therefore, I seek from him an assurance that these new powers will not be used and that draft orders will not come into force until there is a vote of Parliament at the highest level.

I certainly accept that there is a need for speed and for delegated powers, but I hope that the Minister will tell us the specific circumstances in which the existing arrangements are not sufficient, and why there needs to be a speeded-up process that does not rely on primary legislation. We have tabled other amendments that we shall discuss later in Committee but I hope that the Minister will explain exactly why he thinks these new powers are necessary without these improved levels of scrutiny. I beg to move.

[Baroness Northover (LD)]

My Lords, I support the noble Lord, Lord Collins. I wish to speak also to Amendment 75A, which stands in my name and that of my noble friend Lady Sheehan.

We clearly have an international obligation to agree UN sanctions, which, of course, we play a part in agreeing at the UN. It is when we come to sanctions that do not fall under that heading that we must be especially careful about what we leave simply in the hands of Ministers to decide. The noble Lord, Lord Collins, has made that case. Our Amendment 75A would add Clause 16 to those which must be covered by the affirmative procedure. That surely should be the least that should happen. The noble Lord will have heard the debate on Clause 16. The noble and learned Lord, Lord Judge, described this clause as “lamentable”. It gives the power to a single Minister, by regulation, to create criminal offences for conduct that contravenes laws made by secondary legislation. I am sure that we will come back to this on Report. Our Amendment 75A would place a small check on this power, and I therefore commend it to the Minister.

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[The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, I thank the noble Lord, Lord Collins, and other noble Lords who spoke in this brief debate. In addition—to depart from my notes—for the first time I welcome the new Deputy Chairman of Committees to his position. It is certainly the first time for me stand at the Dispatch Box with him in his place.

From the outset I agree—I made this point clear in various debates at both Second Reading and in Committee—on the need for proper parliamentary oversight of sanctions regimes and I recognise the importance that noble Lords attach to this. That has been made very clear to me during Committee. Amendments 73 and 74 would require the draft affirmative procedure to be used for any non-UN sanctions regimes. As noble Lords know, the UK, through the European Union, imposes a number of sanctions regimes and measures that do not derive from the United Nations. These include, for example, sanctions against Russia over its illegal annexation of Crimea, and sanctions against the Assad regime in Syria.

In the future, it is likely—indeed, highly probable—that the UK would want to join its allies in imposing sanctions in circumstances where UN agreement is not possible. The noble Baroness, Lady Northover, talked about Ministers deciding. No, it would be Parliament deciding, requiring that these sanctions regimes come into effect only after the approval of both Houses of Parliament. In that way it would significantly undermine their effectiveness and make it harder for the UK to impose sanctions at the same time as international partners. Future targets of sanctions would be given forewarning of their designation, which would enable them to move their assets out of the UK and take other steps to nullify the effect of sanctions. This would undermine the credibility of sanctions as a foreign policy tool.

The Bill provides instead that the made-affirmative procedure, as the noble Lord, Lord Collins, acknowledged, should be used for non-UN sanctions to ensure that measures have immediate effect, while still requiring the approval of both Houses within 28 days. This strikes the right balance between enabling the Government to act decisively and ensuring accountability to Parliament.

Amendment 75 would require the draft affirmative procedure for any regulations that suspend, revoke or amend existing sanctions. As the Bill stands, regulations that suspend sanctions are subject to the negative procedure. This is to ensure that they can be used flexibly to recognise an improvement in behaviour while maintaining a credible threat that sanctions would immediately be re-imposed in the event of backsliding. This approach has been used to good effect as part of international diplomacy—for example, in the context of the Iran nuclear deal. If the Government were unable to suspend sanctions without waiting for the express approval of Parliament, it would reduce our ability to swiftly deploy these options in support of foreign policy goals.

In addition, as suspension of sanctions has the effect of reducing restrictions on individuals, we do not consider that it requires the higher level of scrutiny required to introduce such restrictions by imposing non-UN sanctions.

As regards regulations to revoke or amend sanctions, the Bill provides that this may be done using the same procedure as was used to create the regulations in the first place. Regimes containing UN-mandated sanctions would be revoked or amended by the negative procedure, and UK-autonomous sanctions by the made-affirmative procedure. I do not see a reason why the revocation or amendment of sanctions regimes should require greater scrutiny than their creation.

Amendment 75A intends to require the draft affirmative procedure for all sanctions regulations that contain enforcement provisions as set out in Clause 16. I acknowledge that we debated Clause 16 on the first day in Committee. I listened carefully to the concerns expressed about the creation of criminal offences through secondary legislation. We are looking at and reflecting on these concerns.

Let me may say a word or two about the process we currently follow as an EU member state and what we envisage following the enactment of the Bill. For each of the current UN and EU sanctions regimes we currently implement through EU law, the UK has created the relevant criminal penalties through statutory instruments made under the negative procedure. Similarly, we expect that all the sanctions regulations created under this Bill will include enforcement provisions of some kind. We envisage one regulation for each country, setting out the purpose of the sanctions, the specific measures being imposed, and the corresponding prohibitions and offences.

This approach allows a degree of nuance when determining penalties. For example, a breach of sanctions that results in nuclear material being made available to North Korea is obviously very serious, whereas failing to supply information to the relevant authority might attract a less severe penalty. Each regime is different, meaning different offences and penalties might be appropriate. This principle was accepted by the Delegated Powers and Regulatory Reform Committee.

Given that all sanctions regulations will include enforcement provisions, this amendment would require the use of the draft affirmative procedure in all cases, both UN and non-UN. For the reasons I have set out, we believe the correct approach is negative procedures for regulations containing UN sanctions and made-affirmative for UK-autonomous sanctions.

The use of the draft affirmative procedure for UN sanctions regulations would mean that we would routinely breach our obligation to implement the relevant asset freezes “without delay”. Noble Lords may be aware that Part 8 of the Policing and Crime Act 2017—approved by this House—contains specific powers designed to bridge the sometimes lengthy gap between the adoption of measures by the UN Security Council and the entry into force of the corresponding EU legal Acts. The amendment would undo our recent efforts to accelerate our domestic implementation of UN sanctions. Given my explanation to the Committee, I hope that the noble Lord, Lord Collins, is minded to withdraw his amendment.

[Lord Collins of Highbury]

I thank the Minister for his response. The words of the noble and learned Lord, Lord Judge, come to mind: he said that we are not simply bringing EU law into domestic law and preserving it, but extending it—a lot. That is the key issue of concern to noble Lords in this House. I hear what the Minister is saying but we will keep coming back to this issue in other groupings. On Report, we will certainly make the voices of all noble Lords heard on this subject. I beg leave to withdraw the amendment.

Amendment 73 withdrawn.

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Moved by

[Lord Collins of Highbury]

75B: Clause 45, page 30, line 41, leave out paragraph (d)

[Lord Collins of Highbury]

My Lords, we may get the same response from the Minister to this amendment, but Clause 41 deals with more than simply bringing EU law into domestic law. We have a clause on anti-money laundering that basically says that we already have primary legislation, so we have no need for more and will deal with all this through regulation. I want to hear clearly from the Minister why that is the case. These probing amendments are about the Minister having to make the case. What is deficient in our existing legislative framework? Why is it not sufficient to deal with the problems that have already been identified or may be around the corner? It is up to the Minister to say why existing primary legislation is not sufficient.

If it is not sufficient, why are the Government not bringing forward primary legislation to deal with it, or making the case for primary legislation? I am tempted to use the terms “known unknowns” and “unknown unknowns”. What are we leading ourselves into? We have tabled this amendment to ask, if the Government have the powers of the super-affirmative procedure, what is the bare minimum? If we will not have scrutiny through primary legislation, let us ensure that on this clause the Government have to say what they intend to do, are required to consult on it and are required to respond to that consultation before any regulations are brought into force. That is the bare minimum.

So far, in all the Committee days, I have not heard that there is a case to be made on this anti-money laundering. By the way, I think it was on the last Committee day that I raised the question of the anti-corruption strategy. I am really pleased that that was published yesterday; I brought it with me and I hope, if we go on for long enough this afternoon, that I will have the opportunity to read it. One of the things about the strategy that concerns me is: who is leading on it? I understand that John Penrose has been given the responsibility, but when the then Prime Minister David Cameron talked about that need at the anti-corruption strategy summit, we were talking about a Cabinet Minister having responsibility. We were talking about the Government taking these issues seriously. We know that money laundering is the key element in most corruption in the world, where people secretly get money out, get it all cleaned up and buy property et cetera.

I hope the Minister will explain why we seem to have had a downgrade on corruption—and not only that. If it is a priority, why are we not getting primary legislation to address these issues? Why are we seeing this being done, in effect, through the back door? I strongly believe that if the clause remains as it is we must have the super-affirmative procedure to ensure not only that we have only proper parliamentary scrutiny but that the people who put the House of Commons there can see and comment on what is being proposed so that there is proper accountability. I beg to move.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I welcome the comments that have just been made on this group of amendments on the super-affirmative procedure. When I went to bed last night I was thinking of commenting only that this enhanced procedure was interesting and worth exploring further, particularly to see whether it goes far enough. We are entering new territory. If a procedure such as this gives sufficient consultative and amendment power to Parliament, it might work—but it is still, as has been emphasised, a big downgrade from participating in an Act of Parliament and therefore should not in any way be a “new normal” to replace what could, or should, be done more fully. Having said that, coupled with the sunset clause that noble Lords have proposed in the last group this evening, it is perhaps even more interesting as a backstop and a temporary measure.

However, this morning—I did not have an inspirational dream and I do not want to retract anything that I have just said—I replied to an email from a lobbyist seeking amendments to the withdrawal Bill to change some things in EU financial services legislation while it is being transposed. As part of my reply I explained that the issue concentrating my mind was far more the division of power between government and Parliament—how changes such as the one they sought to address by lobbying me might be addressed in future—and that there would be legislation following on from the withdrawal Bill. We could say that the Sanctions and Anti-Money Laundering Bill is an advance guard of that follow-on legislation. I ended up by saying that if the Government got their way on the division of power then the lobbyist need never lobby Parliament again. What a statement that is about lack of power and the place of Parliament, yet that is what the Government seek to do to what we proudly call the mother of Parliaments.

Now, “need never lobby Parliament again” is not entirely true. Lobbying would become concentrated solely on getting regulations voted down—in full. I wonder whether the Government have thought through how that would play out. For example, divide and rule—a tactic well used when lobbying and suggestions are varied—would no longer apply. Everyone would be as one, even if for different reasons. I have seen concerted naysaying on issues in the European Parliament—and it is both powerful and very unpleasant.

It is important that Parliament has not just negative but positive power to seek amendments, including to make additions that are significant, not just tweaks. That is what I am looking to preserve, even for any interim measure.

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[Lord Ahmad of Wimbledon]

My Lords, I am very grateful to the noble Lord, Lord Collins, for again raising the issue of parliamentary oversight, and to all noble Lords who have spoken in this debate. I start with a confession: unlike the noble Baroness, Lady Bowles, I did not go to bed last night thinking about the Sanctions and Anti-Money Laundering Bill. I had a three year-old to contend with at that time, so I did not share that experience, nor did I dream about the Bill. Nevertheless, let me say at the outset that I accept the importance of scrutiny, as I have said, and before I come to the amendments in the name of the noble Lord, Lord Collins, I shall address the point just made by the noble Lord, Lord McNally, who spoke about his ministerial responsibilities when he was Minister for the Crown dependencies. His advice is something that I have continued to say to our overseas territories. I was his Whip at that time and I recall those conversations well. Equally, although the noble Lord, Lord Hain, is not in his place, in addressing these amendments I totally acknowledge the important points made in Committee about anti-money laundering and raised again in relation to the previous groups.

I shall address Amendments 75B, 76A and 76B together, as they have a single effect of changing the procedure for regulations made under Clause 41 of the Bill, which concerns anti-money laundering, to the so-called super-affirmative procedure. As we have discussed previously, the Government are committed to ensuring robust scrutiny of regulations made under the Bill. Any regulations made under this clause already have to be made under the draft affirmative procedure and require Parliament’s consent before they take effect. The sole exception to this is when regulations are made to add or remove countries from a list of high-risk jurisdictions in connection to which enhanced due diligence measures must be undertaken. Both the Financial Action Task Force and the European Union currently publish such lists. After the United Kingdom ceases to be a member of the EU, we will seek to align our list of high-risk jurisdictions with that published by the FATF. Part 3 of the Bill provides that regulations updating this list will be made through the made affirmative procedure. This will ensure effective parliamentary scrutiny of such changes, while ensuring that we can align promptly with international standards around which jurisdictions present high risks of money laundering or terrorist financing.

However, this amendment would go further. It seeks to impose the so-called super-affirmative procedure. This would require the Government to publish a draft statutory instrument, with a detailed explanation of its contents, and have due regard to any representations made within a 40-day or 60-day period, including any resolutions of Parliament, before seeking the consent of Parliament to the original or an amended version. I totally appreciate the need for parliamentary oversight, but I believe that this amendment is unnecessary. I assure noble Lords that the Government take parliamentary scrutiny seriously, reflected in the fact that regulations under this clause are already under the draft affirmative procedure.

The Bill will already increase levels of parliamentary scrutiny above and beyond the status quo. We—and other Governments, regardless of party—typically make anti-money laundering regulations through the negative procedure. The Labour Government did this when transposing the third EU money laundering directive through the Money Laundering Regulations 2007. A similar approach was taken earlier this year when we transposed the fourth EU money laundering directive through the money laundering regulations 2017. As noble Lords will be aware, the implementation of the 2017 regulations followed a 12-week policy consultation, followed by a four-week consultation on the draft regulations. Consultations of this type are usual practice for significant changes to regulatory regimes, such as those relating to anti-money laundering.

The Government always pay close attention to the views of parliamentarians, and of noble Lords in particular, on anti-money laundering. In last week’s debate on the Bill we talked about the anti-corruption strategy, which, as the noble Lord, Lord Collins, acknowledged, we published yesterday. In it we reaffirmed our commitment to establishing a public register of the beneficial ownership of overseas companies which own UK property. The Government will publish a draft Bill to this effect in this parliamentary Session, allowing an opportunity for pre-legislative scrutiny. The noble Lord, Lord Collins, asked about the strategy. I assure him that the Home Secretary, as a senior member of the Cabinet, will personally chair a new economic crime strategic board to drive forward action in this regard.

When changing the UK’s anti-money laundering framework after leaving the EU, the laying of regulations through the draft affirmative procedure will allow Parliament and the relevant committees sufficient time to look at the draft before it is debated or comes into effect. I also remind noble Lords that the regulations will be subject to an affirmative resolution in both Houses before they come into force. These measures, along with changes to the Government’s processes for bringing forward secondary legislation, will go further to addressing the issues that the noble Lord, Lord Tunnicliffe, raised earlier this year in relation to the process by which the money laundering regulations 2017 were brought into force.

On the point of broader consultation, I reassure noble Lords that the Government regularly speak to interested stakeholders when considering changes to policy or process. I am confident that this will remain the standard practice in matters of this kind, where the Government are dependent on banks, businesses and other stakeholders to ensure effective compliance. With that explanation, I hope the noble Lord is minded to withdraw his amendment.

[Lord Collins of Highbury]

My Lords, I thank the Minister for his comments, but I think all noble Lords will be concerned. We are moving from one type of regime to another. The fact of the matter is that, as the noble Baroness, Lady Bowles, has said on numerous occasions, EU directives go through a very detailed process of democratic scrutiny—at European level and, of course, at domestic level. We know in advance what those directives contain and we debate them fully, and we have the opportunity, through our representation in Europe, to challenge elements of them. All that is going to disappear when we leave the EU. We want to know that we are not giving up that democratic accountability to simply place everything in the hands of the Executive. I am rather disappointed, to put it mildly, with the Minister’s response. I assure him that we will be tabling amendments on Report, particularly with regard to Clause 41, which will ensure that there is proper accountability and scrutiny.

[Lord Ahmad of Wimbledon]

I assure the noble Lord that I am listening very carefully. I did the noble Baroness, Lady Kramer, an injustice when flicking through my notes. As noble Lords can probably hear, my voice is deeper. That is the result of telling your children to wrap up warmly on Wimbledon Common but not following that advice yourself. Nevertheless, I listened to the points made by the noble Lord and the noble Baroness, Lady Kramer, very carefully. I will consider carefully the points the noble Baroness has raised in Committee, particularly on having a framework, and I recognise the importance of the points raised by the noble Lord—I hear his strength of feeling. I will respond to these issues, as I have said. Some of these concerns have been raised in the Delegated Powers Committee’s report, which we will respond to shortly as well.

[Lord Collins of Highbury]

I thank the Minister for those additional comments but they still do not change my concerns. I would welcome whatever further consideration he gives them and ask that we have what he has to say in plenty of time before Report. In the meantime, I beg leave to withdraw the amendment.

Amendment 75B withdrawn.

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Moved by

[Lord Collins of Highbury]

82: Clause 51, page 35, line 24, at end insert “, the Channel Islands, the Isle of Man and the British overseas territories”

[Lord Collins of Highbury]

My Lords, in this group of amendments we are trying to address an issue that we have discussed before but in a way that improves not only accountability but responsibility. Amendment 84 states that the Secretary of State must lay a report before Parliament on the adequacy of the implementation and enforcement of current legislation on sanctions, money laundering and terrorist financing in the Crown dependencies and overseas territories. It requires also that the Secretary of State must consult on whether any further legislative changes or enforcement powers are needed in connection with these territories. Amendments 82 and 83 are also probing, designed purely to raise a debate on the adequacy of the implementation and enforcement of current legislation on sanctions, money laundering and terrorist financing in the overseas territories, the Channel Islands and the Isle of Man.

The Minister has, on previous occasions in Committee, stated that the overseas territories are separate jurisdictions with their own democratically elected Governments. They are not represented in this Parliament and so it has been only in exceptional circumstances that we have legislated for the OTs without their consent. These amendments are of course not about imposing legislation. They are about questioning whether we are meeting our responsibilities and whether we are satisfied with our collective responsibility. The one area in which the overseas territories do comply is foreign policy, and in particular UN sanctions. They do not have a choice about that; they have to meet the obligations that the United Kingdom does.

I want to focus on collective responsibility. I promised the Minister that while I was sitting here I would try to start reading the anti-corruption strategy, and it is worth reading some of it out. Tackling corruption is in the United Kingdom’s national interest. It helps to keep us safe from threats to our safety and security from organised crime, terrorism and illegal migration, and from insiders who exploit their position to access assets for malign purposes. It is our global reputation and global responsibilities that are at stake. These amendments seek to ask whether we are taking those responsibilities seriously in respect of the overseas territories, the Channel Islands and the Isle of Man.

These are not domestic issues. They are not about local finance arrangements. I did say previously in Committee that if the financial services are to thrive, they need to have public confidence. That is what has been stated and why we want to take the lead globally. We know that our reputation as an international financial centre is dependent on people having confidence in it. That responsibility is particularly important in relation to anti-money laundering and the threat from international terrorism. If illegal activities take place in respect of one form of activity, you can bet your bottom dollar that they will be taking place in respect of other activities. That is the real threat that we face.

These amendments are a reasonable request in terms of the overseas territories. They are not necessarily abrogating the other demands that we have been making but seek to ensure that in our global responsibility in the fight against international crime, we have taken all the necessary measures to ensure that we can defend not only our security but that of the overseas territories. I beg to move.

[Baroness Northover]

My Lords, Amendments 82 and 83 ensure that the Act extends to the overseas territories and Crown dependencies, as we have heard, and that regulations in the Bill may be extended to those areas. Amendment 84 makes it clear that the provisions relate not only to sanctions but to money laundering. We had an extensive discussion about this in the previous sitting. These amendments would certainly move us forward, but my question to the noble Lord, Lord Collins, is this: is this strong enough when he states that he seeks to ensure that, “applicable legal frameworks” are,

“sufficiently robust to achieve the objectives of the relevant legislation across the United Kingdom, the Crown Dependencies and the British overseas territories”?

It strikes me that we are not yet in a position where the Crown dependencies and the British Overseas Territories are in the same place as the UK.

The noble Baroness, Lady Stern, and others made a strong case in our previous sitting that it is time to move the matter forward and align the Crown dependencies and British Overseas Territories with the stronger position that we have in recent years secured in the UK. In new subsections (8)(b) and (8)(c), in Amendment 84, we would wish to see that strengthened. Certainly, it is useful to have a report, but we would wish the provisions here to be stronger on the anti-money laundering front. That said, this is clearly an improvement on the current Bill, which is permissive in regard to these areas rather than stating the changes we wish to see.

[Lord Collins of Highbury]

I just want to reassure the noble Baroness, Lady Northover, that simply tabling these amendments does not diminish our support for other necessary changes, particularly in relation to the overseas territories. We want the Minister to say why these bare minimums are not necessary. It is about moving the debate forward; it is not back-tracking. As I said in my opening remarks, we are not saying that this is somehow preferable to some of the other amendments we have moved, but it is a way of holding the Minister to account. He has to explain why he thinks the current arrangements are satisfactory, and say why such a report would not be appropriate, so that we can operate a policy in line with the strategy published yesterday.

[Baroness Northover]

I thank the noble Lord for that clarification, which is very helpful.

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or whether the mechanisms that the UK Government use for oversight of the Crown dependencies are adequate. The first two are matters for which the legislatures of the dependencies should be, and are, held to account; the third is one that we have sought to address in recent years, and which we have addressed reasonably successfully. I would be reluctant to see us develop a new and paternalistic model for a relationship that seems in many respects to be working well and which is fully open to all the issues that the media and NGOs have raised about money laundering and transparency—issues on which the dependencies can in some respects demonstrate they are ahead of the United Kingdom itself.

[Lord Collins of Highbury]

Does the noble Lord not acknowledge that not all overseas territories are compliant in terms of public registers, which this Government have said is a necessary prerequisite, or thing to have, to ensure increased public confidence? Does he not think that that is something we should expect from all our territories?

[Lord Beith]

I am grateful to the noble Lord. At the beginning of my remarks, I said that I was referring specifically to the Crown dependencies and not to the overseas territories, on which a different speech might have to be made. I would also have to say that registers of ownership are only as good as the quality of the information contained in them. The decision of Crown dependencies not to have publicly open registers but to have registers fully open to law enforcement and tax authorities, so long as those registers are of a high quality, is what is most important. It can reasonably be argued—and was argued with a noble Lord with responsibilities in this area during our previous debate—that the registers now in existence in the dependencies are actually better enforced than that of Companies House.

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[Lord Ahmad of Wimbledon]

I thank all noble Lords who have taken part in this important debate. As we have heard, the UK is responsible for the foreign affairs and security of both the Crown dependencies and overseas territories. That is the constitutional position. Our long-standing practice is that we do not generally legislate for these jurisdictions without their consent. This point was well made, in the context of the Crown dependencies, by the noble Lord, Lord Beith. Sanctions are tools of foreign policy, or are used to protect our national security. It is clear that the overseas territories and Crown dependencies must follow the UK Government’s foreign policy, including the sanctions we apply. I assure noble Lords that the Foreign Office has discussed this with the overseas territories and Crown dependencies and they also accept this central point of principle.

There are currently two ways in which sanctions are implemented by the overseas territories and Crown dependencies. The UK legislates directly for the majority of these jurisdictions through Orders in Council. Other jurisdictions legislate for themselves, but follow precisely the sanctions implemented in the UK. This model is well established and respects the rights of these jurisdictions.

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

With regard to anti-money laundering laws, all the Crown dependencies, and each of the overseas territories with a significant financial centre, subscribe to the international standards for anti-money laundering and counterterrorist financing set by the Financial Action Task Force. They are assessed in their own right for compliance with these standards and have responsibility for implementing them within their own domestic frameworks.

The Government, of course, retain an interest in ensuring that the Crown dependencies and overseas territories have robust anti-money laundering regimes. As noble Lords are aware, and as I stated in a previous debate—this point was raised with the overseas territories at the recent joint ministerial council—we are already working very closely with those jurisdictions which do not already have national company beneficial ownership registers on establishing such registers or similarly effective mechanisms, and ensuring that information held on these can be shared in near real time with UK law enforcement authorities.

I remind noble Lords that we legislated earlier this year, through the Criminal Finances Act, to establish a statutory review of how these arrangements have been implemented. This will take place before 1 July 2019 and will inform any further debate about the effectiveness of measures relating to beneficial ownership in place in individual Crown dependencies or overseas territories. We should also recall that full implementation of these arrangements will put these jurisdictions ahead of the international standards in this area, and ahead of the approach taken by many G20 countries and individual states of the United States.

This demonstrates the benefits of the co-operative relationship that we have established with the Crown dependencies and overseas territories in combating money laundering and terrorist financing. These jurisdictions are self-governing and take their compliance with the FATF standards very seriously. The anti-money laundering regimes of each of the Crown dependencies have been evaluated since 2015, with overseas territories, including the Cayman Islands and the British Virgin Islands, both scheduled to be evaluated in the coming year. The commitment of these jurisdictions to international standards in this area is the best way to ensure that they continue to have robust anti-money laundering and counterterrorist financing regimes. As I said in the previous debate in Committee, this is a point we have once again emphasised in all our communications, and it was emphasised by my right honourable friend the Prime Minister in her recent meeting with the overseas territories. These are long-standing arrangements.

The noble Baroness and the noble Lord, Lord Collins, talked about progress and moving forward. We are moving forward positively and I have already talked about the results. In this regard, I do not believe that these amendments are needed. I am sure noble Lords would not wish to jeopardise the achievements that we have seen thus far, which have come from direct co-operation and working with these jurisdictions, and the progress that has already been made. With that, I ask the noble Lord to withdraw his amendment.

[Lord Collins of Highbury]

I thank the Minister for his response. However, I am a little disappointed. We should not apologise for taking the lead in trying to build confidence globally in financial standards. We should not be in any way apologetic about leading the way because London is a global financial centre—

[Lord Ahmad of Wimbledon]

My Lords, I do not think I apologised in any sense, and nor should we—I agree with the noble Lord. We are leading the way and we are proud of that. We have to put this into context. The noble Lord, Lord Beith, talked about the important relationship with Crown dependencies. I have talked about the relationship with our overseas territories. They legislate in many areas. The relationship does not just work; the strength of relationship allows us to make the progress we are making. Britain is leading the way and our overseas territories and Crown dependencies have shown substantial progress in this respect. Perhaps other G20 countries have a lot of catching up to do. We are leading in this respect.

[Lord Collins of Highbury]

I thank the Minister for that intervention. However, I still come back to the point that the Government’s own strategy, published yesterday, is about building public and international confidence in our systems and maintaining our global reputation. I am disappointed because these amendments do not seek to impose but to ensure effective transparency and that we meet our international obligations. I am sure we will return to the subject when we discuss other amendments on Report, and in the light of that, I beg leave to withdraw the amendment.

Amendment 82 withdrawn.

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Moved by

[Lord Collins of Highbury]

85: After Clause 52, insert the following new Clause—
“Expiry of Act
This Act expires at the end of five years beginning with the date on which this Act is passed.”

[Lord Collins of Highbury]

My Lords, the purpose of this amendment is to try to reflect a lot of the debates and discussions we have had in Committee. At Second Reading many noble Lords, myself among them, said that the Bill was necessary. In the event of Brexit we need to ensure that we can meet our international obligations and treaty obligations; it is a necessary Bill in the event of Brexit and we certainly would not oppose it. I will repeat the words of the noble and learned Lord, Lord Judge—although I do not want to stop him intervening and making this point—who described the Bill as,

“a bonanza of regulations”.—[Official Report, 1/11/17; col. 1400.]

In Committee he suggested that it should be renamed the,

“Sanctions and Anti-Money Laundering (Regulation Bulk Buy) Bill”.—[Official Report, 21/11/17; col. 107.]

That sums up many of the concerns expressed by noble Lords across the Chamber.

This is and should be necessary in terms of meeting our obligations. However, we need to be able to be in a position to assess just what sort of impact leaving the European Union will have. We are giving the Executive substantial powers; we are not sure quite how those powers will be used, and I hope that the Minister will come back with proposals on a number of suggested amendments. However, in light of all the concerns that have been expressed, the Bill should be revisited—and revisited after a period of time. The time we suggest of five years is adequate to ensure that we meet our international and treaty obligations. However, we do not know—this comes back to the point I made earlier—about the “known unknowns”. The known is that we will leave the EU; the unknown is precisely what the consequences will be—what we need to do.

At Second Reading and in Committee we addressed the issue of mechanisms to ensure co-operation with our European partners and allies. The Minister has repeatedly said, “We will do this, we will be that; we’re not leaving Europe, we’re only leaving the EU”. How do we assess that? How do we know? The important element of the Bill, which is why this clause and this amendment are so important, is that the known unknowns can be properly addressed after a due period of time so that we can come back and say, “Yes, this is adequate”, or, if it is not, the Government—of whatever complexion, whoever is in power in five years’ time—will be required to revisit these issues properly in the light of all the consequences of leaving the European Union. I beg to move.

[Baroness Northover]

My Lords, I support the amendment. As the noble Lord, Lord Collins, indicated, we have heard enough during the debate on the Bill to know that much needs to change in it. The noble Lord proposes a sunset clause for the Bill—in that way it will not be on the statute books in perpetuity—and I like the notion that it breathes its last in five years and simply expires.

Meanwhile, the Government can work out their relationship with the EU—and where, in the light of that, legislation is required—and develop appropriate primary legislation both on the UK’s sanctions regime and anti-money laundering measures, which can be properly scrutinised in Parliament.

I note that the noble Lord, Lord Collins, said, “in the event that we leave the EU”. There is indeed a question mark about this and what our relationship with the EU will be if we do. So it is no wonder that drafting the Bill was a difficult challenge.

A sunset clause is a useful backstop. However, as the noble Lord, Lord Collins, and others made clear, it still leaves in place a flawed Bill that we will need to address further on Report.

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[Lord Falconer of Thoroton]

I am sure he is noble.

[Lord Collins of Highbury]

He is a noble Lord who is a Minister.

[Lord Falconer of Thoroton]

I apologise to him. The noble Lord who is also a Minister—I of all people should know that—means well in his intentions and assurances. From experience in the Executive, we reach for the legislation and read it as it is. My anxiety is that unless we get it right in the Bill, we will give the Executive huge powers. As the noble Baroness, Lady Kramer, said, when we voted to leave the European Union, we never intended to do anything other than leave the European Union. We did not intend to change completely the balance of the constitution and give the Executive that degree of extra power. I am talking not only about this Bill, but the whole balance of the constitution. This is happening because everything is necessarily having to be done in a hurry. The oddity about this Bill is that it is an early stage Brexit consequential. It is not adequate in the balance it has struck between the Executive and the legislature. If this Bill has got it wrong, then things will get worse as the pressure builds on parliamentary draftsmen, Ministers and policymakers. We must stand firm as a House to send a message that future Bills must be more accurate than this one in terms of the balance between the Executive and the legislature.

I support the amendment of my noble and learned friend Lord Davidson and my noble friend Lord Collins because it is inconceivable to me, in the light of the number of changes that we have sought, that everything will be put right on Report. The Bill should be time-limited for five years so that the Government have to come back with a further shot at it. We will need this sort of Bill indefinitely, but the balance in this one is so badly wrong that I think a separate clause is appropriate.

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I once again thank all noble Lords for the constructive way they have engaged during Committee. I have appreciated it. As I said, the Government are looking at a number of areas. I assure noble Lords—notwithstanding some of the questions, points and observations made—that the ultimate objective behind this Bill is that the Government remain committed to ensuring that the opportunities and challenges Brexit presents to the Government and Parliament are discussed constructively, and that any legislation, including the Bill, is passed in a way that best reflects the opinions of the people of the United Kingdom. We will continue to work constructively with noble Lords to see where we can move forward. I will write to noble Lords in this respect over the coming days. Based on that, I hope that the noble Lord is minded to withdraw his amendment.

[Lord Collins of Highbury]

I thank the Minister for that. I am tempted to paraphrase that notable historical figure, Mandy Rice-Davies: “You would say that, wouldn’t you?” The fact is that we have substantial concerns that need to be addressed as we move to the next stage. To pick up the concerns of the noble and learned Lord, Lord Judge, this is not a probing amendment or a principled amendment, but a give notice amendment. It is about making sure that the Minister, who has been in listening mode, comes back with some possible, positive proposals to address the numerous concerns we have regarding the Bill. In the light of it being a give notice amendment, I beg leave to withdraw the amendment.

Amendment 85 withdrawn.