Sanctions and Anti-Money Laundering Bill [HL]

Lord Judge Excerpts

2nd reading (Hansard): House of Lords
Wednesday 1st November 2017 Lords Chamber

[Lord Judge (CB)]

My Lords, the objectives of this Bill are admirable: we fulfil our international obligations; we also protect national security; we try to prevent terrorism; and as far as possible, we eradicate money laundering. So there is nothing wrong with the objectives. My concern is the way in which we are going about it.

This is a vast, great superstructure of secondary legislation being erected on virtually non-existent primary legislation. It is, in truth, a bonanza of regulations. It is not shy about it. The very first words refer to power to make regulations. The Bill actually says “Power to make sanctions regulations”, but it is about power to make regulations. That is the term in the first clause, which states:

“An appropriate Minister may make sanctions regulations where that Minister considers that it is appropriate to make the regulations”.


The regulations are then defined. The regulations that the Minister may make mean,

“regulations which do one or more of the following … impose financial sanctions … immigration sanctions … trade sanctions … aircraft sanctions … shipping sanctions … sanctions within section 7 (other sanctions for the purposes of UN obligations)”,

and regulations that may “make supplemental provision”.

Noble Lords will not be too pleased to hear me go through clause by clause of this Bill, but I assure them that in relation to the creation of powers, rather than any review that may take place, not a single clause does not depend on regulation-making powers being given to the Minister. For me, the comeuppance comes at Clause 16, which I think, with great respect, is a rather shocking proposal. Clause 16(2) states:

“Regulations may make provision … for the enforcement of any prohibitions”.


Fair enough. Subsection (3) states:

“The provision that may be made by virtue of subsection (2)”—


I shall read this slowly—

“includes … provision creating offences and dealing with matters relating to those offences, including defences and evidentiary matters”.

Then subsection (4)—this is very generous—states:

“Regulations may not create an offence punishable with imprisonment for a period exceeding … in the case of conviction on indictment, 10 years”.


This is really rather remarkable. We have criminal offences being created by regulation. I assume that there will be a trial before conviction—it does not say that there will not be, anyway. The reception of evidence to demonstrate that the case is proved depends on ministerial regulation. At the end of the trial, assuming that there is a conviction, the judge may impose a sentence of 10 years. This is not the stuff of secondary legislation; this is a very serious provision. I do not speak to any others—but I want to return to the story, because we then go to money laundering.

In Clause 41, we have regulations again, where it says:

“An appropriate Minister may by regulations”,


do this and the other. Then Schedule 2 makes further provisions about regulations under this section. Schedule 2 starts by saying that,

“regulations … may do any thing mentioned in paragraphs 2 to 17”,

and then there are a whole series of provisions, which include, as the noble Baroness, Lady Bowles, has already pointed out, making:

“provision creating criminal offences and dealing with matters relating to those offences, including defences and evidentiary matters”.

It then says:

“Regulations … may not provide for any such offence as is mentioned”,


but there punishment on indictment is up to two years. Phew, what a relief. Why money-laundering punishments should be less than the others is an interesting question, but there it is.

One might have thought that the regulation powers given in this Bill were of such vast amplitude that it might be enough—but it is not, and I ask the question whether this is really how we wish to legislate. I go back to Clauses 38 and 39. Clause 38 provides,

“a power, by further regulations”,

called,

“‘new regulations’ … to revoke any regulations”,

made under Section 1, or,

“to amend any regulations under that section”.

And so it goes on.

Clause 39 also includes a power to authorise additional sanctions, saying:

“An appropriate Minister may … amend this Part so as to authorise regulations … to impose prohibitions or requirements … additional to those for the time being authorised”.


So what you get in Clause 1, which I dashed through—noble Lords will all remember getting rather bored—about financial, immigration, trade and aircraft sanctions and so on, is not the story. There is a whole new additional power to add to that list.

Over and beyond that, we come to the heavy foot of King Henry VIII, in Clause 44. Stark as you like, it says:

“Regulations … may make supplemental, incidental, consequential, transitional or saving provision … in the case of regulations”,


to which I have referred—those arising under Section 1, and,

“provision amending, repealing or revoking enactments (whenever passed or made)”.

So the galumphing King Henry comes along, but to rescue who from what?

This is an extraordinary piece of legislation. I support the objectives of the Bill, but we are legislating in a most extraordinary way. I say this with great respect to all the parliamentarians who have come before me but, speaking for myself, I do not think that an affirmative resolution process does the business. The affirmative resolution is there and it is wonderful—but when was serious scrutiny made under the affirmative resolution powers that led to a statutory instrument being abandoned, either here or in the other place? Yet our main function is to scrutinise legislation and point out to the Executive that in the end we, the legislature, are in charge. This Bill gives too much power to the Executive.