Economic Crime (Transparency and Enforcement) Bill

Robert Neill Excerpts

2nd reading
Monday 7th March 2022 Commons Chamber

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

Thank you very much, Madam Deputy Speaker. This is an important Bill, and it is an exceptional Bill because this is not normally the way in which we go about dealing with such matters, but it is necessary. My right hon. Friend the Member for Haltemprice and Howden (Mr Davis) spoke of it as an economic warfare Bill. Sadly, there is an element of that, because a vicious and genocidal war is being waged in our own continent and, as a law-abiding country that believes in the rule of law, we have necessarily to take actions perhaps not in the way we normally would.

Some aspects of the Bill involve, for example, the removal of a proportionality test in the seizing of assets. In the case of the acolytes, fellow travellers and hangers-on of the Putin regime that is murdering people, it is perfectly proportionate to move swiftly and immediately, but that might not be true in all the other cases in which entities are held in this form. Although none of us is going to delay this Bill today, I hope that the Minister will reflect on whether the second Bill that will come along, which I welcome, may give us a better chance to look at whether that approach is appropriate as a global provision, as opposed to one that is specifically targeted in this instance. There are legitimate business grounds for why assets may be held in various forms of entities that will be caught by the Bill. We do not want to destroy our ability to do that in this country, but at the same time, we want to prevent abuse.

I also welcome what has been said about strengthening the enforcement provisions. We need to do much more on economic crime. The Justice Committee is conducting an inquiry on fraud at the moment, but we need to look at crime internationally as well. Our reputation both as a financial centre and a legal centre depends on that, but that involves our committing the money in a way in which, for example, the United States does to a far greater degree for economic and extraterritorial matters.

The fact that, unlike us, Russia is not a country that abides by the rule of law could not have been more amply demonstrated by its non-attendance at the International Court of Justice in The Hague today. It is a measure of the regime’s arrogance that despite being party to the genocide convention and having signed up to the ICJ’s jurisdiction, it does not even bother to turn up and has the brass neck to suggest, wholly falsely, of course, that it is defending Russian speakers against genocide. It is a measure of the perversion that has taken over the Russian state. Regrettably for those of us who love Russia’s culture and history as a European nation, under Putin it has become almost as much of a rogue state as the mullahs have made Iran. We therefore have to act with exactly the same rigour to destroy it economically. That will bring awful pain to the people of Russia, which is terrible, and it will bring a considerable amount of pain to many people in this country and beyond. Sadly, however, that is the price that we will have to pay to ensure that a genocidal, homicidal dictator, who has clearly never changed from being the KGB torturer that he once was, will not be able to blackmail us going forward.

On the Bill’s specifics, I hope that the Minister will look at some of the amendments, including a number of important technical amendments that have been suggested by the Law Society and which merit being looked at in Committee. We must not forget, for example, that those who have significant control are not necessarily the same as those who have beneficial ownership. There is a risk of a loophole that needs to be tightened up. It is really important, therefore, that we ensure that the various registers that are now being created align sufficiently so that we actually get to the economic beneficiaries of the trusts, rather than the intermediaries who might be dealing with it. That is where the oligarchs, in this case, and the criminals are likely to be.

It is also particularly important to look at the timeframe. Six months for registration seems needlessly generous. Equally, 28 days is too short, because we must bear it in mind that legitimate businesses will hold their assets through these entities and formulas, and we need to give them time to register. I say to the Minister that if, in the other place, there was an amendment that brought that time limit down to three months, many of us think that that would strike the balance very sensibly. That would enable legitimate businesses to register properly, but it would still put the pressure on the villains who we would really get to. I hope that the Minister will think about that.

Subject to that, I commend the Bill to the House. This is actually a fight not just for democracy and decency, but for the rule of law, and that is why we must get the Bill through.

--- Later in debate ---

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to speak in this debate and to follow the right hon. Member for Barking (Dame Margaret Hodge), whom I join in welcoming this long-delayed Bill. I think I have co-chaired the all-party parliamentary group on anti-corruption and responsible tax for nearly seven years; as she says, we were promised this measure six years ago. The irony is that at the time the Government were ahead of the curve, and probably ahead of the world, in coming up with such measures. If we had only had these rules in place and these disclosures available to us now, we could have moved so much faster in this crisis. I wholeheartedly welcome them today and support them all.

I just want to take a few moments to disagree slightly with some comments that have been made. The transparent register of overseas entities is not about economic warfare; it is a perfectly normal and necessary measure to ensure that we have a clean economy free of dirty, criminal and corrupt money. It should not be seen just as a measure for this crisis, but as a measure for life. It is needed for our economy, and it is not intended to be an attack on investors who are perfectly normal and acting properly. It will catch Americans, Australians, Canadians and Europeans; anyone who has property in this country owned by a company will be caught. They are still welcome to come here. We want them to come here, invest here and create jobs.

What we do not want is dirty, corrupt money. People involved in that can sling their hook—they can go. That is what these sanctions are aimed at correcting. People who are coming here to invest have nothing to fear if they are doing nothing illegal—that is what we want. Please, let us not pretend that this measure, which has been planned as an anti-corruption measure for all these years, is solely one for this crisis. I hope it helps in this crisis and that somehow we find some property owned by an oligarch or two that we would not otherwise have found, and we can freeze or sanction it. I suspect that this measure will not make much difference on that. If we do not know what assets they have got already, through our intelligence services, and we cannot get those sanctions and freezes in places quickly, I suspect that having a register in place in a few months’ time, which these people may or may not comply with, is not going to make a lot of difference.

[Sir Robert Neill]

My hon. Friend makes a good point: this is not just for this crisis. He will have seen the excellent article in The Spectator by Professor Richard Ekins, where he and Sir Stephen Laws, the former Junior Treasury Counsel, suggest that the best route for this crisis would have been a stand-alone Bill naming all those to be sanctioned in a schedule and with power for that to be added to. That is not what we have, so the reality is that we are going to have to get this Bill through and perhaps think about that better approach, should such eventualities arise again in the future.

[Nigel Mills]

I agree with my hon. Friend, but that matter is beyond my expertise or interest; my interest is in anti-corruption measures here. I welcome the fact that we have this Bill, but I am nervous that the speed of its drafting and some of the technical provisions may lead these provisions not to work as they should. The people we are most after are not the innocent businessmen who have chosen to arrange property or a company here; we are after the really dodgy rich ones who will use every bit of machinery they have got and may well be able to find some loopholes and ways of exploiting this.

The Bill requires the registration of the beneficial owner of the company that owns the property, not the actual property itself. That may sound like a distinction without a difference, but I suspect that ways can be found, through nominees and careful shareholdings, where those two things can be distinguished. So we need to watch carefully as we bring these provisions in to ensure that they are hitting the people we think they should hit and getting the disclosures we want. If we are not getting them, we need to come back quickly and tighten the rules, changing the provisions and tweaking them. We must not just think, “We have done this today; that’s it. It doesn’t matter. We have got a few thousand registrations.” All the innocent ones may be there, but we may not have got the important ones. That is where we need a huge culture change in the City, in the government and in the law enforcement agencies, where people know that Parliament is now serious in saying, “We mean these provisions to have effect. We want you to enforce them, and we want them to work and to be resourced.” We do not want them on the statute book only then to be ignored, with their being a bit of a deterrent and it not mattering whether they are used or not. We want this stuff to make a huge culture change to our economy and we want it to happen quickly. I commend the Bill and I look forward to the rest of its stages.