Proceeds of Crime: EUC Report

Lord Hodgson of Astley Abbotts Excerpts

Tuesday 22nd May 2012 Lords Chamber

[Lord Hodgson of Astley Abbotts]

My Lords, I am no longer a member of Sub-Committee F; I have been transferred for a period of rest and recreation to Sub-Committee G under the chairmanship of my noble friend Lord Bowness. These are probably my valedictory remarks in connection with a report of the sub-committee that I was on when it was prepared. I enjoyed my time on the sub-committee, first under the chairmanship of my noble friend Lord Jopling and more recently under the chairmanship of the noble Lord, Lord Hannay, who, with his impeccable style, has given us a clear exposition of the issues before us. We were splendidly looked after and impeccably marshalled by our clerk, Michael Collon. His deputy was originally Michael Torrance, who has now ascended to higher and greater things to the clerk of the committee. I am only sorry that I shall not be there to see him in action.

It is a truism that the past 40 to 50 years have seen the trends of globalisation and interdependence of nations burgeoning. It is hard for me to remember that when I first finished university and went to work in New York, one could not make an international telephone call; one had to book it. At weekends and holidays, one might have to book it several days ahead. In the investment bank in which I worked, because I had a decent English accent, my first job was to chat up the operators at the New York international exchange so that the lines could be kept open until my bosses were ready to make the telephone calls that they wished to.

In those days, when you went abroad it was demonstrably a foreign country, in a way that is inconceivable today. With Ryanair and easyJet, people pop all over Europe and indeed over the wider world in a way that in my youth was considered impossible. The emergence of global brands of clothing has meant that some of the physical appearances of us all have become much more similar. I think, by the way, that there is a PhD thesis to be written on the role of jeans in creating a global culture, but that is for another day.

All this is no doubt a good thing—increasing international understanding and so on—but there is of course a seamier side, which is the subject of our debate today. It used to be said that if the Governor of the Bank of England raised his eyebrows in the City of London, whatever was being complained of would stop, and no doubt the news that Scotland Yard was on your tail had a similar calming effect. These threats no longer have the same power or influence, because of globalisation. My first reason for encouraging the Government to opt in to this proposal is that crime has gone global. As our report on the EU’s international security strategy said,

“the nature of the international threat in this area was clearer and that therefore international cooperation was”—

as one of the witnesses put it—“utterly indispensable”.

The second reason, which was referred to by the noble Lord, Lord Hannay, is that to date our efforts at recovery have only scratched the surface, and there is a serious need to up our game. This means that work to establish effective asset recovery offices across the continent of Europe is a very high priority. To see how high, I suggest that the Minister ask his officials to look at Annex 2 to the Commission Staff Working Paper. Only eight countries are listed out of the total in the EU. Every set of statistics is on a different basis, no headings are the same and you have no way of telling what the level of effort is or how effective it is, or of comparing one country’s performance with another.

Even turning to the United Kingdom, which has a commendable record in this, and looking at the Serious and Organised Crime Agency’s report, which the noble Lord, Lord Hannay referred to—he gave the net figure for recovery, but the gross figure is £350 million recovered—in the same year when the Government said that cybercrime was costing the UK £27 billion, we were recovering £350 million gross. That is the second reason for urging the Government to opt in.

The third reason is that we need to establish some centralised mechanism to share information, establish best practice and spread it across Europe. Of the reports that we have had in Sub-Committee F, one of the most depressing sets of evidence was from Europol, which said that all too often police forces in individual European countries have bilateral arrangements and do not send information through Europol itself. If we are not able to create a central approach to this, then for certain the cops will never catch up with the robbers. We need to make sure that within this proposal the ability of Europol to set standards, find out what is going on and make sure that a proper level of collaboration and co-operation takes place, is critical.

What are the downsides? One answer perhaps lies in Annex 4 of the Staff Working Paper. Pages 58-71, headed “Asset recovery in the UK”, show what a lot of good work is being done in the UK. However, this is of absolutely no value unless other countries in the EU are upping their game at the same time. Page 6 of the Explanatory Memorandum states:

“In order to address the lack of data, the main economic analysis is … based on a model which uses proxy indicators to extrapolate from a detailed analysis of income and cost in the UK (the only Member State for which income and costs for all elements of the asset confiscation system can be estimated and which has a confiscation system that is a reasonable approximation of the maximal legislative sub- option)”.

So we are ahead of the game and, judging from that statement, most other countries are far behind us. The same report states that:

“EU Member States will progressively sign and ratify the 2005 Council of Europe Convention”—

which is on laundering, search, seizure and confiscation of the proceeds of crime.

“While this Convention is based on a relatively good consensus, seven EU Member States have not even signed it yet”.

So we have some justification in this country in being a trifle cynical. The UK is leading the way—we are taking on the associated costs and bureaucratic impediments—but who is following us?

My second reason for being concerned is that the trans-European experience on judicial co-operation has not always been an unqualified success. I refer in particular to the European arrest warrant. I declare an interest as a trustee of Fair Trials International. It is a mixed experience on access to interpreters, on access to the proper level of legal advice and on common bail conditions. Some noble Lords may say that we are talking about something completely different here, but in the Explanatory Memorandum there are some serious questions about levels of proof in different European countries, particularly a criminal standard of proof in countries such as Germany, while others, such as this country, use a civil standard of proof to facilitate confiscation. There is a lot of work to be done at the nitty-gritty end to make this decision meaningful.

My reasons for supporting opting in clearly outweigh those for standing aside, for the reasons that the noble Lord, Lord Hannay, gave. However, there is a lot to be done by the Government to ensure that the detailed work that will make this effective is given real impetus. If it is left in a half-formed state, not only will it be ineffective in tackling the problem, which we all agree is serious, but it will add another burden to this country which our competitor and fellow European states are not undertaking.