Sanctions and Anti-Money Laundering Bill [HL]

Lord Mackay of Clashfern Excerpts

Report stage (Hansard - continued): House of Lords
Monday 15th January 2018 Lords Chamber

[Lord Elystan-Morgan (CB)]

My Lords, the arguments have been put clearly and attractively by the noble Lords, Lord Pannick and Lord Faulks. Indeed there can, apparently, be a conflict between two very important and sovereign authorities of law—international law and domestic law. However, one has to favour the argument of the noble Lord, Lord Pannick; in other words, however much the attitude of the rule of law in Britain might respect international comity, it would be morally ultra vires to be prepared to perpetrate an injustice in the name of that loyalty. That would be utterly wrong. That, I think, is the answer to the whole question. In other words, as regards the point made by the noble Lord, Lord Faulks, our respect for international comity is very considerable but is not absolute. It is ameliorated and qualified by that condition, save and in respect of a situation of perpetrating a blatant injustice. That would be beyond our authority ultra vires.

[Lord Mackay of Clashfern (Con)]

My Lords, this is an extremely difficult question which amounts to whether or not the courts of this country have an authority to set aside a decision of the United Nations. We are under a clear obligation to follow a sanction decision imposed by the United Nations. However, I wonder whether the courts of this country, without absolutely challenging the decision of the United Nations, could give force to the Secretary of State’s attempt to change that decision: in other words, a system could be adopted under which the fault that is found with the United Nations procedure is endorsed by our courts in a way which reinforces the attitude of the Secretary of State in seeking to set aside that sanction rather than just going ahead with a decision which seems to fly in the face of our international obligations under the treaty to which my noble friend referred. I would like to believe that it might be possible for our Secretary of State to go to the United Nations in a case of this kind, with support from the courts of this country, to say that, so far as they can see, the decision of the United Nations is incorrect according to the circumstances narrated in a judgment of the courts here. That might be a way of handling this situation.

I understand the position so far as Europe is concerned. I am not sure whether this situation has ever arisen in that context. That can be looked at but I think there is a question about that. A slightly different situation arises for a group bound by treaty—as the European Union is—as against that for single nations, because if we can do it, who else cannot? We do not necessarily think that the rule of law is observed in the same way in every other country in the world but we cannot make a judgment on that point as a justification for this move. I wonder whether something of this sort should not be done.

[Lord Collins of Highbury]

My Lords, the noble Lord, Lord Faulks, said accurately that there was a balance to be struck here, and there is a debate to be had. I am not legally qualified and therefore wish to address the political and moral issues that have been raised. The noble Lord, Lord Pannick, said that this is an extremely rare situation and that we cannot pick and choose. The noble and learned Lord, Lord Brown of Eaton-under-Heywood, said in Committee:

“I see the force of the Government’s argument that the UK has no alternative under international law but to give effect to our obligations under the UN charter; indeed, Article 103 of the charter expressly dictates that these obligations prevail over any conflicting international law obligations.”——[Official Report, 29/11/17: cols. 703-4.]


The Opposition are concerned about the signal we would send if we adopted the amendment of the noble Lord, Lord Pannick. I hear his comments about the United Nations but this Parliament must uphold international law and the supremacy of the United Nations. It should not undermine that. If we adopt the amendment, we would send the signal to other countries, which may flagrantly flout decisions of the United Nations, that we insist that they should. We judge other countries by our own standards. The noble and learned Lord, Lord Mackay, is absolutely right that there should be provision for the British courts to consider a decision of the Secretary of State. However, ultimately they should support the Secretary of State and the United Nations, not say to the United Nations, “We are not going to accept that decision”. We cannot pick and choose; that is the fundamental point. Therefore, while I totally understand the power of the arguments put forward by the noble Lord, Lord Pannick, and have a lot of sympathy with them, there is one point that trumps all else—I use that word advisedly—namely, we must uphold the decisions of the United Nations.

Sanctions and Anti-Money Laundering Bill [HL]

Lord Mackay of Clashfern Excerpts

Ping Pong (Hansard): House of Lords
Monday 21st May 2018 Lords Chamber

[Lord McNally (LD)]

My Lords—

[Lord Mackay of Clashfern (Con)]

My Lords, I want to raise with the Minister the question of how the amendment we are discussing can come into force. It is not covered by the existing list of sections that come into force when the Bill receives Royal Assent. Therefore, it requires to be brought in by regulation. If it is correct—and I must say, I assume that the authorities who have spoken on it already are certainly correct—that it is contrary to the legal rights of the territories, it may be that the regulations seeking to bring this provision into force would be challengeable by judicial review.

In any case, we know from experience that the mere fact that something has been put into statute does not mean that it will happen; if it is subject to being brought into law by a ministerial action, it may never be brought into law at all. I have fairly profound experience of that myself. Certainly, considerable consideration of this by the law officers of the Crown would be required if the Government were going to make an order under the commencement provisions in respect of something that is legally challengeable.

I raise this question as a matter of justice, and justice of course requires that justice be done to all. One of the difficulties with this provision is that attempting to do justice in these territories may lead to injustice to these territories, in that the business they have will go to other places where there is no such regulation, doing nothing to help the ultimate situation and in fact bringing into effect a different type of injustice. Justice is a difficult thing to operate across the world, as we all know, and it may not be easy to effect it in this situation.

My main point is on the commencement provision and the extent of the Bill, which is subject to Privy Council regulation. There is a fair amount to be done before this becomes law.

[Lord McNally]

My Lords, I gladly gave way to the noble and learned Lord, Lord Mackay, because I know from long experience that his contributions are always of great help to the Minister at the Dispatch Box, as they were for me for a number of years.

The overseas territories cannot say that they have not been represented in the House this afternoon. There have been passionate speeches, not least by the noble Lord, Lord Naseby. I am not going to be so hypocritical as to advise him that he should not challenge the wisdom of the other place, having only a couple of hours ago extolled to your Lordships the very virtues of this House occasionally challenging the views of the other place.

Following on from the intervention of the noble Lord, Lord Judd, this has to be put in context. The noble and learned Lord, Lord Neuberger, said that we had no direct interest in this legislation, but when places are called the British Virgin Islands or the British Overseas Territories, we have a reputational responsibility we cannot avoid. If we do, we will damage our reputation. It is therefore right to look at this issue.

I was Minister for the Crown Dependencies—I see the noble Lord, Lord Faulks, nodding—and my noble friend Lord Beith and I worked closely together precisely to avoid the impasse we have now reached. We recognised that we had to work out the problems so that Britain could take on its proper responsibilities for these matters without doing too much damage to the dependencies which were trying to catch up. The way it has worked is one of the reasons why the dependencies qualify so well in the temperature-taking of various international organisations.

However, we have to go beyond the technicalities. Much of the cynicism, particularly among young people, is caused by issues such as the Panama papers and other exposures. Yes, the City of London has to take responsibility for the obscene avoidance of taxes and its co-operation with criminality in moving large amounts of money around in a dark economy. It is that which produces the cynicism that undermines our democracies. Ever since I have been in politics we usually blame the French, but we cannot simply use the argument that if we stop doing it, the French will do it. That is not an excuse for not doing the right thing and trying to set standards. David Cameron was quite right in trying to do this.

It is quite clear, not least from the interventions of the distinguished jurists we have in this House, that there is a problem. The solution was given by the noble and learned Lord, Lord Brown. My opinion of the Minister is boundless—he is going to have a couple of tough years ahead—and it would give him an opportunity to engage with the overseas territories to see whether the full implications of this legislation can be avoided by co-operation and initiatives, rather than the kind of process suggested by the noble and learned Lord, Lord Mackay. We have to see this in the context of a general public who are looking with nausea at what seems to be the ability of this money to find a home outside proper accountability.

I refer the noble Lord, Lord Naseby, to the briefing from 12 highly respected charities, and I understand the passion of the noble Lord, Lord Judd, in defending Oxfam. Although he did not name the Members of the other place, I will do so. In fact, Margaret Hodge and Andrew Mitchell are very well respected for their knowledge of and interest in these areas. We have to realise that the other place has been neither impetuous nor ill-informed in what it wants to do. But within the wider moral context set out by the noble Lord, Lord Judd, I hope that the Minister will find this debate useful in the very difficult diplomatic task that he now faces.