Money Laundering and Terrorist Financing (Amendment) (No. 2) (High-Risk Countries) Regulations 2021

Peter Grant Excerpts

Monday 13th September 2021 General Committees

[Peter Grant (Glenrothes) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Graham.

I will certainly support the statutory instrument, although like the shadow spokesperson, the right hon. Member for Wolverhampton South East, I have some questions and observations. It is absolutely right that decisions are based on the best economic intelligence that can be gathered and, if possible, made on a global basis. It does not work if one or two countries apply sanctions but no one else does, any more than it does if one or two countries dodge the sanctions that everyone else tries to apply. It is important to ensure that our allies throughout the world work with or are exposed to the same rules as we are.

When we last debated money laundering regulations I mentioned something that I shall mention again because it should give us all a bit of a kick. Of the 24 high-risk third party countries on the list, seven are members of the British Commonwealth, including one, Zimbabwe, where there are historical concerns about the rule of law as well as money laundering. One country on the list is a British overseas territory.

In some of those countries, the problems with the lack of proper financial regulation—with being seen worldwide as havens for all kinds of dodgy financial dealings—have been present since the days of direct rule and the British empire. The problems were created 100 years ago, or perhaps more recently, and we are now trying to clear up the mess left behind by our imperial forefathers. It is as good an example as any of the maxim that, in international affairs, what we do to other people we very often end up doing to ourselves.

The right hon. Member for Wolverhampton South East mentioned one or two examples that are clearly going in the wrong direction. We cannot afford to be complacent. Many Governments and widely respected non-governmental organisations have been saying for a number of years that they are concerned about the direction in which financial regulation in the United Kingdom is going. Perhaps more accurately, they are concerned that it is not going in the right direction as fast as the bad guys are trying to pull in the wrong direction.

The Government consultation on their company regulation contained a lot of positives, and I certainly look forward to seeing what draft legislation emerges from it. The response that the SNP submitted in 2019 included two key points. The United Kingdom needs a robust and transparent system of company registration, which we do not have just now. The system of company registration is not working. It must be crystal clear who owns companies, who benefits from them and who is pulling the strings.

We need other legislation on Scottish limited partnerships, which we know have been used and abused to facilitate money laundering and all the criminal and terrorist activities that it supports.

We will support the regulations today, but, as I heard myself saying last week—doubtless I will hear myself saying the same on other financial regulation legislation over the coming weeks and months—this is a small step in the right direction that does not go nearly far enough. Will the Minister tell us when the substantial weaknesses in company registration legislation will be sorted out? My concern is that if we are not careful we could start to see the United Kingdom appear on some people’s suggestions for additions to, if not a red list, an amber list. Give the extent to which the United Kingdom’s economy and, indeed, Scotland’s economy rely on our reputation as a trustworthy place to do financial business, we cannot afford to take that risk.