Sanctions and Anti-Money Laundering Bill [HL]

Lord Judge Excerpts

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

[Lord Hain (Lab)]

My Lords, I added my name to this group of amendments and I support my noble friend Lord Collins in pressing for greater safeguards and extra parliamentary scrutiny, not least because, as I detailed last week in Committee, the banks and London have an appalling record on money laundering—it gives me no great pleasure to say that. We pride ourselves on having one of the best centres of finance in the world, and it is a tremendous source of employment, which is important. However, there is a record of money laundering that simply requires extra parliamentary scrutiny, which is why this group of amendments is so important. That gives me the opportunity briefly, as noble Lords will be relieved to know, to comment on today’s news that HSBC has been relinquished of the penalties that could have applied in the United States of America for similar allegations. That is good news for a British bank that has a global footprint, and for its many employees here in Britain.

I will make two points on this. I caution all our banks which face allegations of money laundering—the Minister may care to comment on this point. Usually, their initial response is to deny it. Then, for example, HSBC, discovered several accounts held by the Gupta brothers, who are South African associates of President Zuma’s family, and it has closed them down, which is welcome. However, we have had a steady stream of allegations against mainly British companies: Bell Pottinger and KPMG, and then McKinsey, which is an American-based company with a presence here. Their initial stance is to deny, then admit, and then apologise. I caution them that with this disease of money laundering it is better not to deny in the first instance.

My second point is to thank the Financial Conduct Authority for the way it has engaged on this issue. I can report to the House that at least one whistleblower who has been supplying me with information from South Africa has engaged directly with the FCA—it has been a positive experience. I say to the financial institutions involved that I named in your Lordships’ House, including HSBC, Standard Chartered and the Bank of Baroda, that if I find that there is any witch-hunting of those responsible, or of the brave, courageous people in the South African governmental system who have also been supplying me with information, I will name the institutions involved and identify the individuals as having suffered that persecution. I say this before your Lordships because it is important that as we take the Bill through we arm it with the instruments necessary to stop this kind of practice.

[Lord Judge (CB)]

My Lords, I will not say anything that would diminish what we just heard from the noble Lord, Lord Hain, and I do not believe in repetition. However, if I have to repeat it at the next stage of this process, I shall be as vehement as I was before. I support this amendment.

--- Later in debate ---

[Baroness Kramer]

My Lords, it is the responsibility of this House and the other place to ensure that any legislation that leaves our hands is properly drafted, with the necessary clauses and relevant safeguards and instructions. That is our responsibility. I look at sunset clauses as an absolute last resort. They can be appropriate where legislation is, by definition, short term and deals with an event that will disappear. However, neither sanctions nor money laundering fall into that category. Therefore, although I believe we are talking about “when” not “if” we will withdraw from the EU, I would hate to see that become the rationale for legislation that we do not feel is as good as it could be in delivering the purposes of the two Houses.

I support the amendment as a backstop. However, in a sense, it is incredibly sad that we are having to contemplate such a clause because the Bill itself is so inherently flawed. The House will know from the many comments I have made that I think that there are many flaws in it. However, the most fundamental is that, through a back door, in effect—the Bill does not state this and nor have Ministers been willing to state it—it shifts significantly the balance of power between Parliament and the Executive. We have generations of history in battling to prevent that change—whether through front doors or back doors—and I hope that the Bill can be amended on Report or at Third Reading so that it no longer engineers that shift in power and will not still be an example of a Bill that requires a sunset clause because it is so inherently inappropriate.

[Lord Judge]

I am going to say much the same as the noble Baroness. I am ever an optimist about this. I think that when the Minister has had time to reflect on the wisdom of some of the amendments that have been proposed that will eradicate some of the less desirable features of this Bill, and make it a much better Act in consequence, we will not need a sunset clause. Oh dear—I have reflected that I may be being optimistic, but I think that I am also being utterly naïve.

I shall not support the amendment at this stage—but if when we come the next stage we have had no improvements in the Bill, then I shall.

[Lord Falconer of Thoroton (Lab)]

I want to underline what was said by the noble and learned Lord, Lord Judge, and the noble Baroness, Lady Kramer. I speak as somebody who has been in the Executive; I have made that point throughout the Committee’s proceedings. I have no doubt that the Bill is necessary, because the nation needs this power. I have no doubt that the noble Minister presenting it is completely—