Criminal Finances Bill

Lord Dear Excerpts

2nd reading (Hansard): House of Lords
Thursday 9th March 2017 Lords Chamber

[Lord Dear (CB)]

My Lords, coming in to bat as late as I am in a debate like this, almost everything I wanted to say has already been said. I shall try to be brief but my brevity does not signify any lack of sincerity or support for the Bill. I welcome it warmly, as I have made known before.

In the 1990s I was HM Inspector of Constabulary, carrying at that time a special responsibility to satisfy the Home Secretary of the day about police activity against organised crime and money laundering—was it adequate? At that time I found that the response to arrests was reasonably good but the response to the recovery of cash was downright poor. All too often those at the top of the criminal tree were getting off scot free. They were not being arrested or inconvenienced, and certainly none of their assets was being recovered. In other words, if you got to that position, life was something like a bed of roses. The amounts then, much exaggerated now, were eye-watering—absolutely staggering amounts of cash, of property, of assets and of works of art. To have seen the product of some of those investigations and listened to some of the intercepts from deep-cover operations showed to me—and I thought I knew everything about it—just how deeply rooted this was. The 2013 Act has gone a long way towards improving that 1990s position, but there is no doubt—and it has been implicit in everything that we have said so far—that the very top end of crime, which we are concerned with in this debate today, is all about status, power, hedonism, violence and cash. If you take the cash away, most of the rest falls away, almost into insignificance. It is quite clear that this Bill has almost universal approval; there is nothing very contentious in it except perhaps to criminals, and we are not too concerned about them in the sense that we have been debating today.

One of the things that will clearly develop from this is the much closer working relationship between HMRC and other agencies, and properly handled that is to be welcomed. I will not go into some of the particular things that interest me in the Bill: unexplained wealth orders, which have been mentioned already, the much-strengthened investigatory powers against fraud and money laundering, and the improved facilities for helping SARs—suspicious activity reports. After I came to your Lordships’ House 11 years ago, I very shortly joined the Home Affairs Select Committee. We carried out an in-depth, searching inquiry into money laundering and its effects. One of the things we looked at was the way in which SARs were being handled, and even then they were handled very well. We spent a fascinating day at the London offices looking at the way in which the huge amount of information from all the various agencies and bodies was collected. They said, “We put so much in, they can’t possibly look at it”. In fact, there was a great deal going in. What was really becoming apparent was that it was being computerised in a very sophisticated way and whole patterns of criminality were being developed, leading one very quickly to see who was involved and where the money was going.

This clearly will help drive down crime. Although we have not mentioned it much today, it would certainly help to slow down, if not stop, terrorist funding. I say, not jocularly, that the days of terrorists rattling tins for collections in central European cafés have very long gone—they disappeared before the First World War. Terrorists now are highly sophisticated in the way they draw down the funds for operations.

I want to mention just three things. The first was touched on by the previous speaker, the noble Lord, Lord Thomas of Gresford, just before he sat down. He is quite right: we have a very poor record in recovery of assets. We talk about large sums but, in proportion, they are very small. Law enforcement has to start supporting this legislation and I hope it will be encouraged—if not encouraged, certainly pushed very hard—to do so. The root of that is that the law-enforcing agencies—certainly police and others working similarly close to them—are judged on what are called “results”, and the results are arrests: “Get the person into custody and before the court. We know we need to chase the stolen property and need to chase the assets, but we are too busy because we have other things coming up and we are being judged on results”. That has to change quite considerably.

We have heard this very hackneyed story about the way the FBI, during the prohibition era in America, took down very high-level criminals by using tax-evasion legislation. That is very close and in parallel to this legislation. I hope to forecast confidently that through the use of this legislation we will move away, in selected cases, from chasing the criminal through the criminal courts and simply go for the asset. The damage it does to him—or her, but usually him—and his organisation is massive and total. Chasing to try and get the conviction is often counterproductive.

I gloss over the second thing very quickly, although I feel very strongly about it. We have heard a great deal about the overseas territories and the Crown dependencies and I agree with everything that has been said. I certainly support public registers of beneficial ownership.

The third thing we have brushed on very briefly in this debate is Bill Browder’s book Red Notice, which I too have read. For those of your Lordships who are still not sure, the book is about Sergei Magnitsky’s death, which led to the Sergei Magnitsky Rule of Law Accountability Act 2012 in the USA. He was a lawyer who stood up against high-level corruption and money laundering in Russia. He was arrested and, in custody, was tortured over a long period and then beaten to death. Browder then pursued his case for many years, eventually getting that Act that I have just mentioned on to the statutory book in America. It is all about human rights abuse and money laundering, and preventing those contributing to that from getting visas to go into the United States. The big thing is about freezing their assets wherever they could be frozen—certainly in the USA. There have been various unforeseen consequences on that; it is a very delicate situation and the Act led to a tit-for-tat war between Russia and the USA, and one has to watch that very closely. Notwithstanding that, the thought of being able to draw human rights abuse and money laundering into this Act in this way has much to commend it for, so my heart and sense of direction supports that.

I repeat, in conclusion, that the Bill has my very warm support—it is very-long awaited and I welcome it. I am confident that it should have a profound effect in the areas we are discussing: humanitarian, social, counterterrorism and so on. I will certainly do my best to assist its passage through your Lordships’ House.