Sanctions and Anti-Money Laundering Bill [Lords]

Robert Neill Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 1st May 2018 Commons Chamber

[Helen Goodman]

My understanding is that the position on the British overseas territories, as set out by a White Paper when the hon. Member for North West Norfolk (Sir Henry Bellingham) was a Foreign Office Minister, is that it is appropriate for this House to legislate for the Cayman Islands and the overseas territories if it is considered necessary. Given the long list of crimes, which I have just read out to the House, that are facilitated, it can be argued completely that when we are making changes in this respect, this is an international, foreign policy issue, as that is what we are talking about; we are talking about the financing of international crime and of terrorism. This is not like trying to intervene in street lighting or purely local matters. It simply has a completely different import for the world.

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

I understand the point the hon. Lady is making and, as a lawyer, I very much appreciate the importance of the international fight against crime and money laundering, but will she concede that at least some overseas territories take their obligations very seriously? For example, Gibraltar, which is part of the EU as well, has already publicly accepted that it will transpose the fifth anti-money laundering directive, which includes a public register of beneficial ownership, into place by December 2019? In a sense, such places do not need to be legislated for, because they are willing to do this. It is important to be proportionate in our approach, is it not?

[Helen Goodman]

Of course what the hon. Gentleman says about the fifth anti-money laundering directive is right, in so far as it does put obligations on Gibraltar. That was why I have linked new clause 14 to the fifth anti-money laundering directive, because clearly it is easier, in terms of international competitiveness, for many jurisdictions to move together.

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[Mr Mitchell]

I will come to that point in a moment, but I hope that my hon. Friend will extol to his friends in the BVI the fact that this is not something that they should regret and seek to avoid, but something that offers them real commercial and economic opportunities.

The second argument, as we have heard, is that the territories already have closed registers that are available to law enforcement authorities and HMRC which, in the case of terrorism, will react promptly—almost within an hour. That is of course true, but it completely misses the point. That point is made eloquently but passively by the Panama and Paradise papers: it is only by openness and scrutiny—by allowing charities, NGOs and the media to join up the dots—that we can expose this dirty money and the people standing behind it, and closed registers do not begin to allow us to do that.

[Robert Neill]

I understand my right hon. Friend’s desire to achieve this measure and recognise the work that he has done on it, but I want to follow on from the point made by my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham). The Government of Spain, for example, often use broad-brush terms such as “tax haven” against the law-abiding British territory of Gibraltar. Will my right hon. Friend extol the fact that Gibraltar has complied and continues to comply absolutely with all EU requirements? We do not help the overall cause by allowing British territories that comply with the rules to be tarred with the same brush as those that do not, as some people will use that against law-abiding British Gibraltarian citizens’ interests.

[Mr Mitchell]

My hon. Friend makes an extremely good point about Gibraltar. I have heard him speak about that subject in the House previously, and what he says is absolutely right. Last night, I received a three-page letter from the Chief Minister of Gibraltar. I was at a loss to understand why he felt that new clause 6 negatively affected him, since he has already committed, through the EU directive, to implement the whole of the new clause one year earlier than is specified. I therefore feel that the Chief Minister and my hon. Friend should be content with new clause 6.

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[Richard Benyon (Newbury) (Con)]

My experience of the House leads me to conclude that when somebody pays a Member a compliment, they should bank it and move on. However, although I am grateful to the Minister and the hon. Member for Bishop Auckland (Helen Goodman), it is important to say that a lot of people have worked on the Magnitsky amendment or law, as it has come to be known, many of whom sit on the opposite side of the House. Many of them have also been involved in this matter for a lot longer than I have, but I do stand to speak in support of new clause 3.

[Robert Neill]

I welcome everything my right hon. Friend has done around the Magnitsky law and the fact that the Government have accepted it. Is he aware that the Government and Parliament of Gibraltar have already introduced a Magnitsky law, which indicates their willingness to be ahead of the game, rather than having to be dragged forward?

[Richard Benyon]

Then they should feel extremely virtuous. It is important that we recognise that we are today putting in place something that already exists in a number of other legal jurisdictions—the Baltic states, the United States and Canada. A number of other countries are looking to do this, too.

David Cameron has been mentioned a lot today, and his commitment on this matter has been vital. In a recent speech to Transparency International he said:

“One of my regrets of my time in office was that we didn’t introduce the Magnitsky Act. The Foreign Office argument was that Britain’s existing approach was better, because we could sanction all the people on that list—and more besides. And I went along with it.

But I soon realised this ignored the advantages of working together—with other countries—under a common heading. It’s not PR, it’s a fact. You get extra clout from coming together across the world and saying with one voice to those who are responsible for unacceptable acts: ‘We are united in our action against you.’”

He then paid tribute to his successor as Prime Minister and to Parliament for passing the provisions in the recent Criminal Finances Act 2017, and also referred to a person who deserves mention in this House today. Bill Browder, along with others, has put himself at huge risk to make sure that those who murdered his lawyer and friend Sergei Magnitsky are not able to travel around the world, bank, buy property and operate in a manner that we rightly take for granted in this country but should be denied to people who have behaved in that way. If we remember anyone today, we should think of the piteous image of Sergei Magnitsky after months of imprisonment. He was extremely unwell and then beaten to death by thugs at the behest of people who have still not been held to account. Today we are saying to them, “Not in our country are you going to be able to do business,” and we should feel proud of that.

In an act of extreme serendipity, I found myself on the Bill’s Committee. I am extremely grateful to members of that Committee, to the Minister and his officials, and subsequently, in recent weeks after the Salisbury incident, to the Prime Minister for absolutely accepting that we need to have what will be known as the full Magnitsky. We went a considerable way towards that a year ago with the Criminal Finances Act, but are now in a position to say that we are in accordance with the Magnitsky provisions of other countries. It is important that we get the definitions right—I do not think that we got there in Committee—but to now have a definition of gross human rights abuse that is in accordance with the Proceeds of Crime Act 2002 is important.

My brief comments today will be about what Parliament does now, because the Bill is gratifyingly loose in its description of what kind of review mechanism Parliament will impose. This is crucial. In recent days, I have had useful discussions with Committee Clerks, the Chairmen of the Liaison and Procedure Committees and a number of others about what kind of structure we could create in accordance with the Bill to allow individuals—Members of this House, members of organisations such as Amnesty International or Bill Browder’s, or any individual—to say to the Government, “We have evidence that these people have done this and should be sanctioned.” The Government will produce a report to Parliament every 12 months setting out who has made representations to them. In an important response to the hon. Member for Aberavon (Stephen Kinnock), the Minister made a clear assertion that the names on the sanctions list will be made public. That is important.

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[Nick Herbert (Arundel and South Downs) (Con)]

I was pleased to add my name to new clause 6, and I congratulate the right hon. Member for Barking (Dame Margaret Hodge) and my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) on bringing it forward. I will not repeat the powerful arguments that have been made for transparency today—they were also well made on Second Reading—other than to say that progress has been made in the overseas territories. Central registers have been introduced, but that is not sufficient for the reasons that have been given. We need that transparency to shine a light on what is happening. I suspect that there has been relatively little interrogation of the central registers by law enforcement authorities. There also needs to be a step up in law enforcement action as well as in these measures.

Two principal concerns were adduced to explain why we should at least hesitate before we compel the overseas territories to act. The first is the potential economic damage to the overseas territories. I argued strongly on Second Reading that that should not be an impediment to act. It can never be an argument that, where something wrong is being done, we fail to act simply because there might be some economic consequences. We do, however, have a duty to ensure that those economic consequences are addressed and that we help to mitigate them.

In accepting the new clause, there is a strong responsibility on this House, and now on the Government, to ensure that there is no damage to the economies of the overseas territories for taking action, especially as they may now be taking it more rapidly than they wished to, particularly when we consider, for instance, the impact of the hurricane damage on the British Virgin Islands. That concern should not prevent action, but it should be taken seriously.

The second concern is the constitutional objection: is it right for us to intervene? That is a serious argument. Again, on Second Reading, I argued that if the harm that is being done is so great that it can no longer be ignored, there is a justification to act, and there clearly is a power to do so. These are not just domestic matters for the overseas territories in which we have decided to intervene; they have a global impact. It is therefore very important for the Governments of the overseas territories to understand the reasons why this House has felt it so important to move. If they can act voluntarily, ahead of any action being taken legislatively, that would be very welcome.

[Robert Neill]

I thank my right hon. Friend for giving way on that important point. Does he accept that it is for that reason, and that reason only, that the Chief Minister of Gibraltar wrote the letter in the way that he did—because it is the constitutional convention that we do not normally legislate without the territories’ consent? And it is for that reason, and that reason only, that the Crown dependencies, which have a good record of compliance, had concerns about this form of legislation undermining the long-established doctrine that we do not legislate for them without their consent. It is not the objective that anyone objects to in any of those jurisdictions, but this should be done through the normal constitutional process.

[Nick Herbert]

The Crown dependencies do not fall within the ambit of new clause 6, as my right hon. Friend the Member for Sutton Coldfield pointed out. They are in a different constitutional position.

The wider point is this: I would have been minded to accept the Government’s compromise amendments and new clauses had the House had the opportunity to consider them. We should have avoided, if at all possible, dictating to the overseas territories what to do, but that option was not available. None the less, I welcome the fact that action is being taken.

In agreeing to new clause 6, the key concession that the Government made was that it was no longer acceptable that the overseas territories should move only at the pace of the rest of the world. As my right hon. Friend the Minister for Europe and the Americas said, the key concession was that he accepted that the will of the House was that the overseas territories should move ahead of the pace of the rest of the world for reasons that have been very well made by Members on both sides of the House. That said, we should not lose sight of the objective here. The objective is not to force the overseas territories to take action, but to ensure that we tackle corruption where we find it, and that has to be done on a global basis.

The arguments that there will be displacement should not be an impediment to action, because we can never argue that we will not tackle a crime on one street corner in case it moves to the next. That can never be a moral argument or a reason not to take action. Nevertheless, it is a serious argument. What are we going to do to avoid displacement? The imperative is therefore on the Government and on this place, which has now forced this action, to support every effort possible to mobilise the global community behind transparency for everyone.

This House and the UK will be taking a lead, and we will be requiring our overseas territories to take a lead, but we now have to step up. That may mean taking initiatives such as having another global summit to encourage action, as the anti-corruption champion, my hon. Friend the Member for Weston-super-Mare (John Penrose), suggested. Whether it is through means such as the G20 or the G7, we must now drive action on a broader basis than simply the overseas territories or the Crown dependencies.