Laundered and pressed

MoneyLaundering.jpg

Ray Collins on the many improvements made by colleagues in both Houses to the first ‘post-Brexit’ Bill, as it concludes parliamentary scrutiny

Monday sees the Sanctions and Anti-Money Laundering Bill return to the Lords, when we will debate Commons amendments. With the sanctions that currently take effect in the UK almost exclusively happening via EU regulations, this was the first piece of Brexit legislation to be considered by Parliament. And borne out of the necessity for a new domestic legal framework to be in place before next March.

Perhaps due to the cross party consensus on this necessity, the Bill started off in the Lords. That however, didn’t stop it facing tough parliamentary scrutiny. Not least, because when introduced it contained a bundle of ‘Henry VIII powers’ that looked to reduce the accountability of the government to Parliament. Instead, allowing laws to be changed using statutory instruments and regulations – rather than going through primary legislation. At the same time, core British values that demand the respect for human rights were not included; and despite the eye-catching title of the Bill, only one of the 53 clauses was dedicated to ‘anti-money laundering’.

Peers across the Lords expressed huge concern about this naked power grab by the government. Crossbencher Lord Pannick, a leading barrister, warned it could hand ministers “unrestricted and unregulated power”. Lord Judge, the former Lord Chief Justice, said the Bill risked allowing an “alarming accretion of power to the executive”. And Conservative Lord Cormack was “disturbed” by the idea that Parliament would be “conferring a blank cheque” on the government to do what it liked. Taking a side swipe at the hard Brexiteers in his own party, he added: “the mantra of taking back control means only one thing to me: it is Parliament taking back control.”

Through an amendment led by Lord Judge, the government was defeated on the clause that would have allowed Ministers to create new criminal offences without having to pass primary legislation. Of the Bill’s less than marginal focus on anti-money laundering, that lone clause gave sweeping powers to amend, rewrite or revoke legislation. But cross-party work headed by LibDem Baroness Bowles saw us achieve huge concessions from the government.

On human rights, Labour’s successful Lords amendment expanded the criteria for imposing sanctions to include unequivocal commitment to promote them. At Commons Committee stage, my shadow ministerial colleague Helen Goodman MP introduced so-called ‘Magnitsky’ amendments. These give the UK the same ability as Canada or the US to implement targeted sanctions, such as visa bans and asset freezes, against gross human rights abusers. Having first resisted, the government did a complete u-turn following the Skripal incident in Salisbury – tabling amendments for Commons Report. Labour signed those amendments, pleased that Ministers had seen the light. But it was unfortunate that it took such a tragic event to force their hands.

The other big victory in the Commons came with the government conceding on Margaret Hodge MP’s simple measure to require British overseas territories and crown dependencies to publish public registers of beneficial ownership. The Paradise and Panama Papers have shown how such places play a major role in aiding tax evasion and money laundering. Open registers will ensure we know who owns what and where, and transparency over the flow of money. As Margaret so ably argued, it will transform the landscape that allows tax avoiders, tax evaders, kleptocrats, criminals, gangs involved in organised crime or those wanting to fund terrorism to operate how they do now.

Though we have achieved a number of important things in this Bill, it is in no uncertain terms perfect. We have a long way to go to tackle the huge problems of money laundering and tax evasion. Similarly, the government has come no nearer to explaining how it will coordinate sanctions policy with our EU partners post-Brexit. Everyone knows sanctions work as a foreign policy lever when coordinated with other countries, and we need a formal mechanism to ensure it is done in a systematic and orderly way.

Lord Ray Collins of Highbury is both Shadow Foreign Office Minister and Shadow International Development Minister in the House of Lords. He tweets @Lord_Collins

Published 20th May 2018

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