All 9 contributions to the Economic Crime (Transparency and Enforcement) Act 2022

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Mon 7th Mar 2022
Mon 7th Mar 2022
Economic Crime (Transparency and Enforcement) Bill
Commons Chamber

Committee stage: Committee of the whole House & Committee stage
Tue 8th Mar 2022
Wed 9th Mar 2022
Mon 14th Mar 2022
Mon 14th Mar 2022
Mon 14th Mar 2022
Mon 14th Mar 2022
Royal Assent
Lords Chamber

Royal Assent & Royal Assent & Royal Assent & Royal Assent & Royal Assent & Royal Assent
Mon 14th Mar 2022
Economic Crime (Transparency and Enforcement) Bill
Commons Chamber

Consideration of Lords amendments & Consideration of Lords amendments

Economic Crime (Transparency and Enforcement) Bill

[Relevant documents: Report of the Joint Committee on the draft Registration of Overseas Entities Bill, Session 2017-19, HC 2009, the Government Response, Session 2017-19, CP135, and letter to Kelly Tolhurst MP relating to the Government Response, dated 3 September 2019; Eighth Report of the Foreign Affairs Committee, Moscow’s Gold: Russian Corruption in the UK, Session 2017-19, HC 932, and the Government Response, HC 1488; Eleventh Report of the Treasury Committee, Economic Crime, HC 145.]
Second Reading
15:34
Priti Patel Portrait The Secretary of State for the Home Department (Priti Patel)
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I beg to move, That the Bill be now read a Second time.

The United Kingdom is united in opposition to Putin’s horrific, unjust war on Ukraine. The depth of that feeling was seen in how the entire House rose to applaud the Ukrainian ambassador at Prime Minister’s questions last Wednesday. Mr Speaker, that you allowed that rare intervention in our parliamentary proceedings speaks for the unity of the House. Putin must fail, and the Government are taking a wide range of actions to that end along with an extensive package of support for the heroic Ukrainian people. Putin is a gangster.

Joanna Cherry Portrait Joanna Cherry (Edinburgh South West) (SNP)
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As the Home Secretary is straying to points outwith the Bill, I want to address how the airwaves at the weekend were full of criticism—both internal and external to the United Kingdom—of her scheme to help Ukrainian refugees. When will she announce something to speed up the scheme and give it the degree of urgency that their dreadful plight necessitates?

Priti Patel Portrait Priti Patel
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I am grateful to the hon. and learned Lady for her question, because it gives me the chance to clarify what is happening in a fast-moving picture. As my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities said, I was in Poland on Friday. This is a rapidly moving picture, and it is important for all colleagues in the House to know that the first quality-assured figures on the Ukraine family scheme will be published this evening. I want to make it abundantly clear that the figures that are now public are absolutely inaccurate and have not been assured by the Home Office.

The hon. and learned Lady also asked about our scheme. Before I return to my remarks, it is absolutely right to say that our scheme is the first of its kind in the world, and we cannot measure it against that of any other country. We have already had 14,000 people apply, and we also have a sponsorship scheme that will be announced later on. Of course, the extended family route was announced on Friday.

Yvette Cooper Portrait Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
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Will the Home Secretary clarify whether the Home Office has set up a visa application centre in Calais, or are people still being sent on journeys of hundreds of miles back to Paris or Brussels for the checks that they need to get safely into this country?

Priti Patel Portrait Priti Patel
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Again, for clarification, as I set out in the House last week, we are surging capacity across our VACs to ensure that as many people as possible are getting access. Let me—[Interruption.] If the right hon. Member would like to listen to my response rather than shout from her seat, it is absolutely right that we have already had people in Calais. Let me therefore again clarify—I said this over the weekend—that we have staff in Calais and support on the ground. It is wrong to say that we are just turning people back; we are absolutely not. We are supporting those who have been coming to Calais. It is also important that we do not create choke points in Calais but encourage a smooth flow of people. In particular, I confirm that we have set up a bespoke VAC en route to Calais but away from the port because we have to prevent that surge from taking place.

Mr Speaker, this does not relate to the Bill, but there is another issue about our checks that the House should know about. Not only are people-smuggling gangs roaming around Calais but, over the weekend and today before coming to the House, I have been on calls about the human trafficking cases that are manifesting at the border. It is therefore right that we have the right process in place to check people and to safeguard them.

Jim Shannon Portrait Jim Shannon (Strangford) (DUP)
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I thank the Secretary of State for what she is doing and the staff put in place to try to help move things on. However, only 50 people have been processed so far, and my constituent, whom I spoke about in the Chamber last week, is in Ukraine today to collect her son and daughter but uncertain about how to bring them home. I seek the Secretary of State’s clarification on how we can make the process better for people with families here who are going through Poland or Romania to come here.

Priti Patel Portrait Priti Patel
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The hon. Member makes an important point. Having been to Poland myself and seen the processes—I am also due to speak to my Romanian counterpart later today—I know that they have issues about capacity. We have had requests for technical capacity and support not just through our VACs but to help the host countries to do a lot more work at the borders. We are doing everything that we can.

The hon. Member also mentioned his constituent. If they are in Poland, we have got a huge amount of capacity and plenty of spaces for people to be processed, but they do need to come to our centres. If he would give me their details, I will ensure that we are joining that up in country.

John Redwood Portrait John Redwood (Wokingham) (Con)
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The Home Secretary has a lot of support on the Government Benches for the compassionate and sensible way in which she is going about this. Will she confirm that she is listening both to what the refugees want, which is often not a long-term settlement a long way from Ukraine, and with regard to the security issues that this all poses?

Priti Patel Portrait Priti Patel
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My right hon. Friend is absolutely right. I must emphasise that every single crisis requires a bespoke and unique response. There are two very big calls coming from the region and from our counterparts. First and foremost, they are asking for help on security measures right now; that consistent theme is coming over. That comes down to checks—they are undertaking checks—but they are also very concerned about wider security issues, some of which I simply cannot discuss in this House, for clear reasons. The second point—even the Ukrainian ambassador made this point to me yesterday and I hear it every single day from my counterparts—is that there is a call to keep people in region. There is a big demand for that, and that is where the wider aid effort has to focus, in addition to the work that we are doing on humanitarianism.

Barry Sheerman Portrait Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
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I do not wish to disturb the flow of the Secretary of State’s speech for very long, but I want to make one point. We all know that some of the brightest minds in the City of London are, at this moment, burning the midnight oil and finding ways to dodge anything that this Government, with the support of the Opposition, are bringing in. Is it not a fact that we need rapid action—as rapid as any of the other countries that are taking out sanctions—and will she promise me that it will be fast, furious and efficient?

Robert Goodwill Portrait Sir Robert Goodwill (Scarborough and Whitby) (Con)
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I was contacted on Saturday by a former constituent who had escaped from Ukraine with his Ukrainian wife. He contacted me again last night to say that I did not need to help him—he had been to our embassy in Berlin and expected that everything would be sorted out today, and that he would come to the UK this week—so I reassure her that, actually, the system is working and people are getting the help they need.

Priti Patel Portrait Priti Patel
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I thank my right hon. Friend for the example that he shared with the House. That is really important, because we have surge staff across every EU visa application centre. I came to the House last week and said that we absolutely would do that and we are indeed doing it.

Roger Gale Portrait Sir Roger Gale (North Thanet) (Con)
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I have been told that people arriving at Calais are being told that they have to go to Paris or Brussels to get visas. Is that correct or not? If it is not, will my right hon. Friend please tell me why it is being said? In 1972, we took into Kent thousands of Ugandan Asians. We did it almost overnight and without any difficulty at all. Last Monday, my right hon. Friend told me that she would cut away the red tape. Why are we not doing that?

Priti Patel Portrait Priti Patel
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I have already made it clear, in terms of the visa application centre that has now been set up en route to Calais, that we have staff in Calais, and, importantly, people have been coming to the UK from Calais. I am afraid that there has been a lot of misinformation about all this, and I have clarified our position today.

Munira Wilson Portrait Munira Wilson (Twickenham) (LD)
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Will the Secretary of State give way?

Priti Patel Portrait Priti Patel
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I will not; I need to make progress and I have been generous with interventions. In addition, on the point that my right hon. Friend the Member for North Thanet (Sir Roger Gale) made, I did say that we would cut away process, but he has already heard me say that there are security concerns and considerations—[Interruption.]

Lindsay Hoyle Portrait Mr Speaker
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Order. There are just too many conversations going on. I am struggling to hear.

Priti Patel Portrait Priti Patel
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Thank you very much, Mr Speaker.

Putin is a gangster and his regime is underpinned by a mob of oligarchs and kleptocrats who have abused the financial system and the rule of law for too long. Putin’s cronies have hidden dirty money in the UK and across the west, and we do not want it here. Expediting this legislation, which I know the whole House supports, will mean that we can crack down on the people who abuse the UK’s open society.

Bob Seely Portrait Bob Seely (Isle of Wight) (Con)
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I am delighted that my right hon. Friend is bringing up not only the oligarchs, but the enablers and facilitators. What do the Government think about various potential bad actors in the House of Lords and what should we be doing about them?

Priti Patel Portrait Priti Patel
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My hon. Friend and I spent some time on the Select Committee on Foreign Affairs, which looked at that very issue. He is right to highlight enablers and, with them, many other associates. It is right that through the Bill and the changes we are bringing in, we find a way to capture as many of them as possible. That is what the Bill seeks to do.

Aaron Bell Portrait Aaron Bell (Newcastle-under-Lyme) (Con)
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Further to the point made by my hon. Friend the Member for Isle of Wight (Bob Seely), would the Government be willing to adapt the language of the Titles Deprivation Act 1917, which was used to withdraw peerages from peers who gave succour to Germany in the first world war, after proper investigation by the Privy Council?

Priti Patel Portrait Priti Patel
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We will look at the issue, as we have said consistently. Part 1 of the Bill, which I will expand on shortly, is only one of the measures that we are taking, but we have to rule nothing out.

Andy McDonald Portrait Andy McDonald (Middlesbrough) (Lab)
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Across the House, we all want to see these bandits nailed. Is the Home Secretary content that the Bill will actually stop the disposal of properties? In my view, the register may not succeed in inhibiting that. We want to stop people getting away with it and disposing of assets. Will the Bill do that?

Priti Patel Portrait Priti Patel
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The hon. Gentleman is absolutely right to raise that point and to highlight the legal basis on which we can confiscate assets, property and so on. Unexplained wealth orders are one of several tools we can use that are covered in the Bill.

Jonathan Djanogly Portrait Mr Jonathan Djanogly (Huntingdon) (Con)
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A lot of houses are owned by criminal gangs for money laundering purposes, often in rural areas, and left empty. If people do not register, will the Bill allow us not only to impose a fine on them, but sell those properties so that they can go back to the community rather than be left there to rot?

Priti Patel Portrait Priti Patel
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My hon. Friend is absolutely right. I said that unexplained wealth orders were one of several tools, but we have other tools that have to be deployed. Registration, beneficial ownership—all those aspects are covered in the legislation, and rightly so. By accelerating the legislation, we are concentrating on the sharpest tools we can use and the powers we can bring into force in the most focused time. Expediting this legislation will send a very strong signal that the UK will not be a home for corruption.

David Davis Portrait Mr David Davis (Haltemprice and Howden) (Con)
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Will my right hon. Friend give way?

Priti Patel Portrait Priti Patel
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I will give way shortly, but first I will make some progress, if I may.

This will be about hurting Putin and his vicious regime, which has robbed the Russian people of their chance for democracy, peace and prosperity—not only that, but even their own wealth has been used and abused by these kleptocrats and oligarchs. The reforms in the Bill will give us greater power and more information to identify and investigate the illicit wealth of Russian criminals, their allies and their proxies. The new property register will have an immediate effect, dissuading those intending to buy UK property with illicit funds. Oligarchs could be slapped with an unexplained wealth order—one of the tools that we will have at our disposal—and the Treasury will be better able to act when financial sanctions are breached. We are implementing the most severe package of sanctions ever imposed on Russia or on any major economy.

Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
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The right hon. Lady spoke about unexplained wealth orders. Does she have a commitment from the Treasury to ensure that the National Crime Agency and other agencies that deal with those orders are well financed?

Priti Patel Portrait Priti Patel
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The right hon. Gentleman makes a very important point; I am pretty certain that he has raised several times in this House the need for legal protections, finance and an approach that gives law enforcement the tools it needs. The Bill is doing that, and we are acting not only through legislation, but through the wider way we help agencies and law enforcement to function, operate and go after those who have been undermining our system.

John Baron Portrait Mr John Baron (Basildon and Billericay) (Con)
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Following on from that point, the Bill is very welcome, but many of us believe it could go further, which is why we have supported and tabled various amendments. Legislation and regulations are worth their salt only if they are properly enforced. The National Crime Agency, for example, has had cuts to its funding in recent years. Will the Bill put that right not just for the NCA, but for all enforcement agencies?

Priti Patel Portrait Priti Patel
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That is a really important point. This is about how we operationalise the Bill—how we use the tools that we are giving our agencies. Yes, resourcing is required. We have already stepped up with a new kleptocracy unit in the NCA and have put more resources into it. We are absolutely not going to stop—we cannot stop. We are catching up in many quarters, we really are, and we want to use the full force of legislation and the full force of the law to go after many of these individuals.

Iain Duncan Smith Portrait Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
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I thank my right hon. Friend for and congratulate her on driving this Bill forward so quickly, co-operating with all sides to get it on to the statute book. I wish to raise one point. I noticed that in the original draft, although there has been a slew of amendments since, there were all sorts of little caveats. For example, it let people off the hook if they did not “knowingly or recklessly” give the wrong information. I hope she will agree with an amendment I have put my name to and we will strike that out. There is no excuse on “knowingly or recklessly”; someone either did or did not co-operate, and if they did not, they should get the full force of the law.

Priti Patel Portrait Priti Patel
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My right hon. Friend is absolutely right, and he has also pointed out the vast drafting that has taken place over the weekend, with various amendments. I am grateful to all colleagues, on both sides of the House, for their co-operation on many of those amendments. He is absolutely right to say that people have an intent, which is what we are going after.

David Davis Portrait Mr David Davis
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The Russia sanctions regime is across eight different sets of regulations, and even the Commons Library could not disentangle them for me. In some cases, simply stopping people using their assets does not go far enough. For those found to be working on behalf of Putin and his elite, we should be expropriating their assets. Does this Bill simply allow freezing or does it actually allow us to confiscate assets?

Priti Patel Portrait Priti Patel
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My right hon. Friend has hit the nail on the head, and I am going to come to some of that in my remarks shortly. If he will just bear with me, I would like to make some progress. I am conscious of the protected time we have today, so I ask all colleagues to bear with me.

This legislation is concise and tight for very good reasons, hence the number of amendments that have been made; we want to move at pace. But we cannot stop there, and for the benefit of this House—I know colleagues are aware of this—let me say that there will be a second economic crime Bill, a follow-on Bill in the next parliamentary Session, with further measures. We simply cannot get all the measures in right now. We have focused on the ones that will have the greatest impact and enablement.

Matt Hancock Portrait Matt Hancock (West Suffolk) (Con)
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In respect of the Sanctions and Anti-Money Laundering Act 2018, many of the problems that we face today are due to amendments made in the other place, and it has subsequently come to light that many of those amendments came from those who are acting for oligarchs and then legislating for loopholes. Will my right hon. Friend confirm that the other place should listen very carefully to the elected House on this matter and make sure that this Bill, with these amendments, gets sent back here forthwith, without more loopholes being put in place by the other place, as they were years ago?

Priti Patel Portrait Priti Patel
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I wholeheartedly agree with my right hon. Friend on that. We could do a rerun of exactly what happened back in 2018, but, in the interests of time, we want to crack on with where we are going with this Bill. It will enable the greatest changes to the companies register since it was established nearly 200 years ago. Companies House will be reformed and we will verify the identity of every company director and beneficial owner. I know that Members of this House have been calling for that for a considerable time. No criminal or kleptocrat will be able to hide behind a UK shell company ever again—those infamous brass plates will go. This will be a boost to all legitimate businesses in the UK and, importantly, it will make it easier for them to get the information they need.

The next Bill will bring forward reforms to prevent the abuse of limited partnerships; new powers to seize crypto-assets from criminals—that is a new and emerging area where we have so much more to do; and measures to give businesses more confidence to share information on suspected money laundering. It will be a very substantial piece of legislation. I assure the House that we are already drafting that legislation and it will be brought forward as soon as we are able to do so and we can get the time in the House. Today’s Bill and our commitment to a second Bill will show that in this Government, we are all acting collectively and unitedly to root out the dirty money in our economy and, importantly, to hobble Putin and his cronies.

Margaret Hodge Portrait Dame Margaret Hodge (Barking) (Lab)
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I welcome the indications that the Home Secretary has given of what will be in the Bill that will arrive, I hope, early in the next Session, but will she also consider the role of the enablers—lawyers, accountants, banks and others—who either condone or themselves facilitate much of the money laundering and financial crime?

Priti Patel Portrait Priti Patel
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I agree with the right hon. Lady, and I am also grateful to other Members who have not just highlighted this issue but given specific examples. A great deal of work is being done. It is important that we take a collective approach institutionally, and that our legal basis is sound and solid.

Catherine West Portrait Catherine West (Hornsey and Wood Green) (Lab)
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The Home Secretary is very generous in allowing so many interventions.

During the 2017 Parliament, the then Prime Minister appointed a tsar—for want of a better word—to fight corruption within the House, but over the years that role has become less effective. Does the Home Secretary think it should be re-established and refreshed, so that someone could really call out many of the issues that we know to be a problem in both the House of Commons and the House of Lords?

Priti Patel Portrait Priti Patel
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I thank the hon. Lady for highlighting the role of our anti-corruption tsar, my hon. Friend the Member for Weston-super-Mare (John Penrose), who has been supporting the Government at every level. He has also supported me by helping with much of our work on illicit finance and economic crime. He comes to our roundtables, and spends a great deal of time dealing with matters concerning the City and transparency. I can therefore assure the House that we have that function up and running. We have a superb colleague supporting the Government on all those measures, and I am very grateful to him for his work.

Let me now explain the measures in the Bill in more detail. It sets a new global standard for transparency, which is thanks to the work of my hon. Friend the Member for Weston-super-Mare, but it also takes the whole-of-Government approach that many Select Committee reports have called for—I think it fair to say that I have read a few of those reports produced by colleagues and friends—in that it contains several measures from several Departments. It creates a register of overseas entities to crack down on foreign criminals who use the UK property market to launder money. A foreign company that wishes to own land in the UK will be required to identify its beneficial owners and to register them with Companies House. Once a company is registered, an overseas entity identity number will be provided, and that entity will be required to update its information annually.

Kevin Hollinrake Portrait Kevin Hollinrake (Thirsk and Malton) (Con)
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I welcome the measures that my right hon. Friend is introducing, but many Members fear that people who have already bought their properties through a discreet structure will sell them before the measures take effect. Will she look carefully at amendment 64, which Mr Speaker has graciously accepted—a manuscript amendment—and which would effectively prevent people from doing that by means of a prohibition through the Land Registry?

Priti Patel Portrait Priti Patel
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I thank my hon. Friend for amendment 64. He was in touch with me about it over the weekend. He is absolutely right, and we are looking at the details of that proposal.

Layla Moran Portrait Layla Moran (Oxford West and Abingdon) (LD)
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As the right hon. Lady knows, the Bill provides exemptions that Secretaries of State would be able to use in order not to require an entity to be on the register. One of them relates to

“the economic wellbeing of the United Kingdom”.

Many of us, across parties—and I thank Ministers for being so constructive in this regard—fear that that could drive a coach and horses through the entire legislation. Is this another amendment that the right hon. Lady is looking at, or would she care to simply accept it?

Priti Patel Portrait Priti Patel
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At this stage, I am outlining the measures in the Bill. We have a Committee stage coming up, and we are considering all the details, because we absolutely must get this right and ensure that all the measures will be effective.

Overseas entities will be required to verify information regarding beneficial owners and managing officers before making an application for registering, or updating or amending information held on the register. That is very important, because the current system is out of date. We need to be able to keep the information fresh and agile, and ensure that the right checks and balances are constantly applied. They will have to provide evidence to underpin that verification, and Companies House will be able to query all information under the broader powers we will create in the second Bill. If a foreign company does not comply with the new obligations, or if it submits false filings, its managing officers can face criminal sanctions or civil sanctions. Criminal penalties in England and Wales could, depending on the offence committed, be a prison sentence of up to five years, or a fine. We are also introducing a mechanism by which financial penalties can be enforced without the need for criminal prosecution. More importantly, overseas companies will be restricted in their ability to sell or lease their land if they do not comply with the requirements.

Chris Bryant Portrait Chris Bryant (Rhondda) (Lab)
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I am grateful to the Home Secretary for giving way. This is naughty of me, as I have been in the Foreign Affairs Committee and I have not heard all that she has said. Would she acknowledge that clause 31 seems to set a very high bar by saying that it is an offence to give false information only if someone does so “knowingly or recklessly”? I apologise again for arriving late.

Priti Patel Portrait Priti Patel
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The hon. Gentleman has clearly been occupied elsewhere, and we did cover this point earlier on.

Andrea Leadsom Portrait Dame Andrea Leadsom (South Northamptonshire) (Con)
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I have been in the Chamber since my right hon. Friend started speaking. She might be aware that over many years one of the problems with Companies House has been the capability of a small business to register a name, take our money by selling us something, not deliver the goods, then go into liquidation and set up again the next day with almost the same name, perhaps with “and sons” at the end of it. Can she reassure me that this Bill will deal with that issue, in the changes to Companies House?

Priti Patel Portrait Priti Patel
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My right hon. Friend has made an incredibly important point and used a good example to show how the system is being used and abused. I want to reiterate to the House that this is a two-stage Bill. The first stage will deal with many aspects of this, but the full Companies House reform will come in the second economic crime Bill, where that detail will all be worked through. It is important to say this is the first step to making a clean sweep in terms of how we update, in terms of accountability, and in terms of holding individuals and their enablers—their managers and all the others responsible—to account. The House has just heard me speak about the penalties.

Andy Slaughter Portrait Andy Slaughter (Hammersmith) (Lab)
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There seems to be bit of a gap between the Home Secretary’s rhetoric and the reality. Last week, the Government were briefing the press that they were drawing up plans to seize British property and use it to house Ukrainians fleeing their homeland. Well, if there are only 50 Ukrainians, that is probably only one property. However, where is the freezing and seizing of assets here? All that this Bill is proposing is a relatively generous time limit on the publication of information. When are we going to get the steps that actually bite?

Priti Patel Portrait Priti Patel
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I have been speaking for a while and I would have hoped that the hon. Gentleman was listening to my remarks about the many tools that this Bill will bring in to enable asset confiscation, freezing and so on.

That brings me neatly on to unexplained wealth orders. The Bill removes key barriers to the use of unexplained wealth orders. Let me make it clear to people who think they can obstruct law enforcement investigations that that will end now through this Bill. I have already touched on the work of the National Crime Agency. Yes, we will be resourcing it and yes, there is more to do; we are very open and honest about that, and we have to be. We will reform the costs rule so that agencies acting to protect the public will be protected from substantial legal costs when they have acted reasonably in their investigation. The maximum period that a property can be frozen while unexplained wealth orders are in place will be extended, allowing the full force of the law and proper investigation.

Unexplained wealth orders will also be more effective against those who hold property in the UK through trusts. That is another complex entity that tends to lead to complex ownership schemes. Individuals will no longer be able to hide behind opaque shell companies, trusts and foundations. We will do everything in our power to counter the unwillingness of kleptocrats to provide reliable information. These reforms will have an immediate dissuasive effect.

Tim Loughton Portrait Tim Loughton (East Worthing and Shoreham) (Con)
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I support the measures in this Bill, but it all hinges on enforcement. Can my right hon. Friend explain why unexplained wealth orders have been used so little? What research has she done with other countries? The Criminal Assets Bureau in Ireland, in particular, has a much higher success rate in pursuing unexplained wealth orders, tracking down these people and prosecuting them.

Priti Patel Portrait Priti Patel
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We cannot compare London with certain other countries and economies, and there are well-known barriers to the application and utilisation of unexplained wealth orders. Much of the wealth is legal, and individuals tie our law enforcement system in knots, exposing it to huge costs, including legal costs. The purpose of this reform is to change the entire way in which UWOs are operationalised, and to give law enforcement agencies the legal basis, legal powers and protections they need to go after many of these individuals, as the current system has stopped them doing so.

Oliver Heald Portrait Sir Oliver Heald (North East Hertfordshire) (Con)
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I understand that the Secretary of State for Business, Energy and Industrial Strategy has put forward the idea of having an enforcement unit at Companies House. Will that be available for individuals who want to make allegations of false information on the register, or is there some other mechanism by which we will be able to investigate and press the case?

Priti Patel Portrait Priti Patel
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With this Bill, we are speaking very clearly about known individuals, known oligarchs. This legislation enables the Government, the NCA and other agencies and aspects of Government to focus on those individuals, which is our priority. The second economic crime Bill is currently being drafted. It links to Companies House reform, which will take slightly longer, and will cover many of those wider issues about reporting and how to join up Companies House and law enforcement.

None Portrait Several hon. Members rose—
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Priti Patel Portrait Priti Patel
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I will make progress. I have taken plenty of interventions, and I am conscious of the protected time for subsequent stages.

This Bill also toughens up the enforcement of financial sanctions, making it easier for the Treasury to impose significant fines. Even where it has not imposed a fine, the Treasury will have the power to publicly name those who have breached financial sanctions. That will both sanction them and deter others, and we are expanding the information-sharing powers to help the Government shine a much brighter light on malign actors who abuse the financial system. Of course, all this will be a major boon to the Treasury’s ability to clamp down on financial sanctions breaches, and that work will be done with the financial institutions, our economic crime tsar and across the Government. We have to work with the financial sector, too.

We are, of course, working closely with the devolved Administrations on this legislation. The Bill contains provisions relating to the register of overseas entities and unexplained wealth orders, which engage devolved powers in both Scotland and Northern Ireland. We are moving together as one country, and I am confident that we can rely on their support as we continue to expedite legislative consent. I emphasise that we are doing this together in lockstep, and I am grateful to all colleagues across the DAs for their support.

The Government have consulted and engaged widely on the measures in this Bill. The new property register has been designed carefully, drawing on extensive discussions, to balance the need to clamp down on misuse while protecting the ease of doing business. The unexplained wealth order reforms have been designed in close consultation with law enforcement agencies such as the NCA, the Crown Prosecution Service, Her Majesty’s Revenue and Customs and, of course, the Serious Fraud Office. We have also engaged widely with representatives of the accountancy, financial and legal sectors, and with others. Colleagues have raised the issue of enablers many times, and enablers are at the forefront of much of our work.

The Treasury will engage and consult on updated civil monetary penalty guidance for financial sanctions before the reform comes into effect. We are acting decisively, but we are getting the balance right. I urge both sides of the House to support this Bill and to work with us on some of the technicalities in how we kick dirty money out of our country and make it harder for Putin and his associates by bringing this into legislation so that we can operationalise it as soon as possible.

Stewart Hosie Portrait Stewart Hosie (Dundee East) (SNP)
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Will the Secretary of State give way?

Priti Patel Portrait Priti Patel
- Hansard - - - Excerpts

Not just yet.

As I have said, further measures are coming shortly in other legislation and some of them will take more time to be developed.

Craig Mackinlay Portrait Craig Mackinlay (South Thanet) (Con)
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On the vexed issue of trusts, whether they be domestic or, more likely, foreign, if they are of a discretionary nature, there is no absolute beneficiary, by their very definition. They may be tucked away in a trust deed in some foreign jurisdiction of which we do not have details. I have looked through the legislation and can see no way in which we can penetrate some of those trusts. I do not even know whether we should, because of the nature of discretionary trusts, for which there will be a list of potential beneficiaries but no absolute beneficiary. The legislation will catch absolute beneficiaries, but I cannot see how discretionary trusts can be caught or, frankly, ever could be.

Priti Patel Portrait Priti Patel
- Hansard - - - Excerpts

My hon. Friend makes an important and significant point. That is exactly the work in which the transparency tsar has been heavily involved, giving the Government advice on that work across Government Departments. All this has to be looked at. I come back to the point that, in recognition that this is expedited legislation, we have not only to consider carefully but to work through the practicalities and how we operationalise the legislation.

The Government are also amending the Sanctions and Anti-Money Laundering Act 2018, which has been referred to many times. We are streamlining the existing legislation so that we can move more swiftly and effectively to sanctions oligarchs and businessmen associated with the Russian Government. The amendments we have tabled will remove the statutory test of appropriateness in the designation of individuals and entities, thereby speeding up designations. It is important that we do that in real time and in fast time, because of some of the related complications.

Matt Western Portrait Matt Western (Warwick and Leamington) (Lab)
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Will the Secretary of State give way?

Priti Patel Portrait Priti Patel
- Hansard - - - Excerpts

I am not going to give way, because there is protected time and the hon. Gentleman will get to speak later.

We will remove some of the constraints on designations by description, so that the Government can designate groups of individuals more quickly. That means there will be more agility and flexibility so that we can act. It will help to quickly list members of defined political bodies—such as the Russian Duma, which has been highlighted, and the Russian Federation Council—by body rather than by individual names, all of which can run into the hundreds. We will have the power to apply the legislation to groups. That will ensure that the Foreign Secretary can mirror the listings that have already been adopted by our allies, but via urgent designation procedures. The United States, Canada, Australia and the EU are listed on the face of the Bill for that purpose. Others may be added, by a power, as needed. That will facilitate the closest possible international co-ordination on sanctions. I emphasise the co-ordinated approach we are seeking to take at a time of crisis and conflict. It will help us to strip back unnecessary requirements regarding the making and amending of regulations under the 2018 Act, to streamline the process of establishing or augmenting the sanctions regime.

Of course, we want to protect the public purse by only permitting the payment of damages in connection with designations in the case of bad faith, removing the possibility of damages for negligence. The Bill also provides a power to impose a cap on damages for actions under the 2018 Act. The provisions will apply to any proceedings issued after 4 March, when the amendments were tabled, even if the proceedings relate to designations made previously. That will limit the ability of many of the deep-pocketed oligarchs—we have had this with UWOs—to claim massive pay-outs from sanction challenges. This is a fundamental change to our laws and how we operationalise them. A streamlined review of the reporting requirements under the 2018 Act will follow.

Through this specific legislation, we can focus on Putin and his cronies. We do not choose between a transparent economy and a strong economy: it is transparency that makes our economy, our country and our approach to these issues stronger. The Government are providing our law enforcement agencies with the crucial powers and resources that they need. We want to go after the dirty money and crack down harder on those who violate our financial sanctions and our country. Putin and his band of thugs must not be able to hide their wealth in the UK. This is as much for the sake of ordinary Russians robbed of their wealth as it is for the sake of our country and the west more broadly. We are calling on all countries, all our friends and allies, to take a similarly robust approach. It is by working in co-ordination that we can make a difference. There is overwhelming global condemnation of that regime and the grotesque war that is raging in Ukraine. This Bill is part of our effort, and I commend it to the House.

16:15
Yvette Cooper Portrait Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
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I welcome the Bill before us today, at a time when rocket attacks are continuing, when homes, community centres and even kindergartens are being hit, and when families fleeing through the streets of Ukraine are being targeted for attack. The Russian President has launched an illegal war against a democratic state. It is a crime against a brave nation. As we stand united with Ukraine, we know that this is a battle for democracy against despotism.

Our country has to play its part. All of us want to see the strongest economic measures against Russia and against the oligarchs linked to the Russian regime who have made their wealth through corrupt and illicit practices, and against those who made their money not through their own sweat and toil, but through corruption and the concentration of power.

A few years ago, the Intelligence and Security Committee’s Russia report said that the UK has

“offered ideal mechanisms by which illicit finance could be recycled through what has been referred to as the London ‘laundromat’”.

That is damning. It issued this warning nearly three years ago:

“It is not just the oligarchs…the arrival of Russian money has resulted in a growth industry of ‘enablers’”—

individuals and organisations that manage and lobby for the Russian elite. Chatham House has referred to Britain’s “kleptocracy problem”.

The fact that corrupt elites from all over the world can launder their money and their reputations through our capital city is shameful. The fact that an industry of enablers has grown up here to facilitate those corrupt elites, to help them hide their money, evade tax or launder proceeds of crime is deeply damaging to our economy, to our international reputation, to the rule of law and to democracy.

So yes, we welcome the Bill. We welcome the chance of stronger sanctions and measures to make it easier to put pressure now on Russia in the face of this appalling war. We welcome the improvements to unexplained wealth orders, making it easier for the police to use them and harder for those with endless wealth to use their riches to block them, and we welcome the register of overseas entities to get some transparency and to make it harder for corrupt elites to hide their wealth in the UK property market. We will support the Bill today and support the process to get it through Parliament as fast as possible.

Many of these measures should have been introduced some years ago. Some that we need and have long been promised are not yet before us. All of us should accept that some of this action should have taken place earlier, because we had been warned. We had been warned by Transparency International back in 2015; by the evidence from leaked international documents such as the Pandora papers; by the National Crime Agency, which said that unexplained wealth orders were too hard to use; by Members of this House when we confronted the murderous intent and actions by Russian agents on British soil during the Salisbury attack four years ago; and by the damning Russia report. We were promised reforms in many of these areas in 2016. There was a consultation in 2018 and reference to a Bill in the Queen’s speech in 2019. We still do not have the much-needed Companies House reforms before us today.

Catherine West Portrait Catherine West
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Does my right hon. Friend agree that, had the Government got a move on with this years ago, we would be able to deal with phoenix companies today, which rip off members of our communities day after day? We could have dealt with that, too, in one blow.

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

I agree with my hon. Friend that action should have been taken much earlier to address that, which should mean that there is an even greater imperative on us all now to ensure not only that this Bill passes, but that the subsequent economic crime Bill that we badly need is brought forward as swiftly as possible. That is one of the areas where the Opposition have submitted amendments.

Angela Eagle Portrait Dame Angela Eagle (Wallasey) (Lab)
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Is my right hon. Friend as surprised and worried as I am that the Office of Financial Sanctions Implementation, which is in the Treasury, has 37.8 full-time equivalent people working in it?

Yvette Cooper Portrait Yvette Cooper
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My hon. Friend makes an important point. Unless we have the ability to use the powers we have and the powers we are discussing in this Bill, in practice nothing will happen. We know that there is considerably more investment in taking some of these measures in the United States, for example. There are also issues with enforcement resources for the National Crime Agency.

Chris Bryant Portrait Chris Bryant
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The enforcement issue is really important. For instance, following the invasion and annexation of Crimea, we made it a criminal offence to support tourism activities in Crimea. However, Quintessentially, which is run by Ben Elliot, has been providing restaurant recommendations in Crimea to Russian oligarchs. Surely he should be investigated and everybody should be distancing themselves from him now.

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

I must say that the information my hon. Friend provides is deeply disturbing. There is a huge responsibility on us all, and particularly on the Government, to ensure that there is no conflict of interest in the source of any political donations to the party or any role in the party, and that there is a proper distancing from the appalling activities of corrupt Russian elites.

Barry Sheerman Portrait Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
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At the last election but one, a former intern of mine, now a very wealthy Hollywood lawyer, sent me £5,000. I immediately sent it back because it was a foreign donation. Is that not the sort of example that every Member of this House should set for how to behave when foreign people offer us money?

Yvette Cooper Portrait Yvette Cooper
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My hon. Friend makes an important point. For example, there is discussion as part of this Bill about shell companies and ensuring that action is taken on economic crime. However, we had similar discussions about shell companies on the Elections Bill, where the measures taken were not strong enough.

Overall, we welcome this Bill, although we want some of the further measures to be introduced swiftly. We welcome the Government’s agreement to some of our amendments, which have pushed them to go further; we will press them still further in Committee on some of those issues, but we want to continue to work with them, and there are many areas of consensus.

That is why the scale of the Government’s failure to support Ukrainian refugees is so troubling, and I must pick up some of the points the Home Secretary made earlier. She said,

“I confirm that we have set up a bespoke VAC en route to Calais but away from the port”.

No. 10 has said,

“I don’t believe there’s one there now but we’ll keep it under review”.

The Home Office website is still telling people to go to Paris. Journalists in Calais, looking for any centre that there might be, are still unable to find anything; all they can find is a few Home Office staff, in a building with a crisp machine but no visas. One family, who have been there for five days, have been told they cannot get an appointment in Paris until 15 March.

I must ask the Home Secretary what on earth is going on. If she cannot tell us where that visa centre is en route to Calais, then there is no hope or chance of Ukrainian families being able to find it on the way to Calais in order to get sanctuary.

Yvette Cooper Portrait Yvette Cooper
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I will give way to the Home Secretary to clarify.

Priti Patel Portrait Priti Patel
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I think the right hon. Lady did not hear what I said earlier. I said that I can confirm that we are setting up another VAC en route to Calais—I made that quite clear in my remarks earlier on. I also said that it would be away from the port in order to prevent the surge that we do not want to take place. It is news to me that she says that there is a family—[Interruption.] Well, as I said earlier on, we do not want to create choke points in Calais, given the people trafficking and smuggling issues that have been materialising. That is a fact. I am sorry that Opposition Members are very dismissive of this, but I am involved in a lot of engagement on it and I am seeing all sorts of concerning matters. I need to pick up on the right hon. Lady’s point about a family that says they cannot get an appointment at a VAC in Paris. That is news to me. I have not been told that that is the case; I have been told very clearly that there are appointments and people are not having problems accessing appointments. I am very happy to call her office directly later on today and give her the facts on that.

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

That would be very helpful. But we also need to know when this visa application centre will be set up and operational, because right now this means that people are being turned away from Calais because they do not have the biometrics or the security checks they need and so are being sent back to Paris in order to do so. We need to know when that is going to be in place.

Dan Carden Portrait Dan Carden (Liverpool, Walton) (Lab)
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Are not the Government and the Home Secretary absolutely out of step with the British public on this? When bombs are raining down on families across Ukraine, the public want us to open the doors and welcome them in.

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

I think the public want to see us doing our bit, and that is not what is happening. What people are seeing time and again is families having to leap over additional hurdles—additional bureaucracy. People are being told to wait 72 hours after their security checks are all cleared just because of bureaucracy. Lots of relatives are still being left out. Elderly aunts or 19-year-old nieces are not included and are being turned away. That is the point. [Interruption.] If the Home Secretary says that is not correct, I really urge her to stand up and clarify it, because at the moment her guidance says that elderly aunts and 19-year-old nieces are not included in the family visa scheme.

Priti Patel Portrait Priti Patel
- Hansard - - - Excerpts

I appreciate that this is now becoming a much wider debate, but on Friday we launched an extended family route that covers the very family members that the right hon. Lady is referring to, and people are applying—over 14,000 have applied. That scheme is up and running. I said in my earlier remarks that later on this evening we will be providing assured data and assured numbers on the people who are coming through that route. It is wrong to say that this Government are not welcoming Ukrainian refugees. We have a very unique scheme. As I said, it is the first of its kind in the world and it cannot be measured against that of any other country.

Lindsay Hoyle Portrait Mr Speaker
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I think I need to come in here, just for a minute. At the end of this debate I expect the Minister’s wind-up to pick up on some of the points that have not been answered—that is the idea of having a Minister speak at the end. Hopefully we can make sure that the Government, having been given time to think about the answers, are prepared to respond to some of the questions that have been raised.

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

I am grateful, Mr Speaker, because there are some very serious questions.

The Home Secretary has just said that elderly aunts are included, but that is not what the website says. Elderly parents are, yes, but elderly aunts are not. We really need to know what the facts are, because right now a lot of families are being turned away. Lots of relatives who are families of Ukrainians working here on healthcare visas or on study visas are also not allowed to come. They are not included in her scheme and families are desperate now.

What is happening is shameful. There are too few relatives arriving and no sign of the sponsorship scheme that the Government have promised will allow those who are not family members to come. Will the Home Secretary please stop claiming that this is all world-beating and world-leading and that she is doing everything possible, and accept that it is not working and things are going wrong? Otherwise, how can we possibly have confidence that she is going to put this right and make sure that refugees can get the sanctuary they need?

Stella Creasy Portrait Stella Creasy (Walthamstow) (Lab/Co-op)
- Hansard - - - Excerpts

As of an hour ago, there was a poster up in Calais that says simply, “No visas delivered in Calais.” It tells people to go to an online form and then to Paris or Brussels. Does my right hon. Friend understand why the Ukrainian community in this country are horrified, frustrated and furious to see their relatives who are in Calais being given such information and such a lack of clarity, and does she agree that we need to tell people where this processing centre is? People seeing that sign will give up hope, when hope is what they need from this country.

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

My hon. Friend is absolutely right. If we in this House are so confused and cannot follow this chaos, it must be devastating for families who are desperately trying to be reunited. I hope the Home Secretary will deliver on some of the promises she has made, but there is currently a huge gap between the rhetoric and the reality, which is letting Ukrainian families down badly.

Stephen Flynn Portrait Stephen Flynn (Aberdeen South) (SNP)
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On the topic of confusion, is the right hon. Lady as concerned as I am about the fact that the Home Secretary seemed to indicate that the figure of 50 visas is inaccurate, yet in response to a question from the hon. Member for Rhondda (Chris Bryant) in the Foreign Affairs Committee earlier today, the Foreign Secretary said that she believed the Home Secretary had announced that? Is it 50, or is it not? Does this confusion not cut to the heart of the issue?

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

Clearly we need updated figures, but my understanding is that 50 visas is the figure issued by the Home Office yesterday. I hope we will have a further update, but the problem is that we are now 10 days into the conflict, and the Home Office was warned—

Kevin Hollinrake Portrait Kevin Hollinrake
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On a point of order, Mr Speaker. We have been waiting for the economic crime Bill for many years. There is a huge number of amendments on the Order Paper and a huge number of people wanting to speak. This is a very important issue—absolutely critical—but it does not relate to that legislation. Could we have a ruling from you on that point, sir?

Lindsay Hoyle Portrait Mr Speaker
- Hansard - - - Excerpts

I make the decisions, and I think it is all right. What I would say, in fairness, is that the Home Secretary spoke for well over 30 minutes—in fact, I think it was nearly 40—and I am therefore giving some leeway. It is a very important matter; it is also protected time, so one need not worry.

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

Thank you. Mr Speaker. The concern for the House is that the Home Secretary has provided information today that does not yet seem to be accurate, and we urgently need accurate information. We also need a simple route to sanctuary for people who want to join family or friends and need sanctuary in the UK to be able to do so. That is not yet happening. We desperately need the Home Secretary to get a grip.

We need action to support refugees. We need the UK to do our bit. We also need the measures on sanctions, unexplained wealth orders and the register of overseas entities to be put swiftly in place. We need Putin to feel the full force of sanctions now; we welcome the sanctions that are in place, but more than a week into the war, we have sanctioned only a handful of oligarchs and are still falling behind other countries. I hope the Bill will make it possible to speed things up, but there are concerns that people who may be subject to sanctions will still have time to move their wealth. We will discuss those concerns later in Committee, where amendments have been tabled that may be able to address them.

Turning to beneficial ownership, UK property has been used to launder illicit wealth for too long. We welcome measures to reveal for the first time who the ultimate foreign owners of UK property are. We welcome, too, the Government’s recognition that the initial, draft Bill did not go far enough; they have accepted our amendments on stronger fines and proper identity checks, and that is welcome. Giving people 18 months to dispose of all their assets, as the draft Bill suggested, so they can hide them in some other regime was clearly ludicrous; it was a chance for them to get out of London and stash illicit money somewhere else. But even six months gives people a very long time, and is not justified by the scale of the problem we face. People have already had six years of warning that this Bill was coming. That is why in our amendment, we call for 28 days instead.

We support the measures on unexplained wealth orders. The fact that they have been used in only four cases in four years shows that for too long they have not been working: they are too hard for the police to use and too easy for the clever lawyers of rich criminals and oligarchs to block, and the costs to the National Crime Agency if it loses a court case are too great. We have called for more action to monitor progress to see whether these reforms make sufficient difference, and we welcome the Government’s acceptance of that amendment, but that must be only the start. We badly need the long-promised reform to Companies House, and we are calling on the Government to publish that draft legislation imminently. We need to ensure that it has action on enablers and on cryptocurrencies, too.

We will need more action on golden visas. The Home Secretary has rightly made a decision to halt them, but her own statement said:

“The operation of the route has facilitated the presence of persons relying on funds that have been obtained illicitly or who represent a wider security risk.”—[Official Report, 21 February 2022; Vol. 709, c. 6WS.]

There is still no published review, no information on the number of people suspected of involvement or of posing a wider security risk, or how many of them have now become British citizens. I wrote to the Home Secretary to ask questions on that, and she has not responded. I urge her or other Ministers to explain when they will be able to do so.

Matt Western Portrait Matt Western
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The question I was hoping to put to the Home Secretary was very simply whether she could illustrate how this extremely important legislation, would, say in the case of Roman Abramovich, bring into effect the changes needed. It was reported to the Home Secretary back in 2019 that he was a person of interest to Her Majesty’s Government.

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

My hon. Friend is right that we need clarity about how the legislation will work in practice and be used to make a difference. It raises questions about individuals, and we are all aware, as other Members have raised, that serious allegations have been made this weekend about the appointment of a Member of the House of Lords with close family links to the Putin regime.

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

I will take one final intervention.

Rushanara Ali Portrait Rushanara Ali
- Hansard - - - Excerpts

Does my right hon. Friend agree that it is deeply concerning that the now Lord Lebedev, despite warnings—

Lindsay Hoyle Portrait Mr Speaker
- Hansard - - - Excerpts

Order. We cannot name a Member of the other place, unless it is on a substantive motion, so that it is not personal. We must keep to where we are.

Yvette Cooper Portrait Yvette Cooper
- Hansard - - - Excerpts

Given the seriousness of this matter and the seriousness of the allegations that security advice from our intelligence agencies was dismissed, and given the importance of the Prime Minister always demonstrating that the defence of our national security is always his priority, it is immensely important that all the information and advice pertaining to this appointment is made available to the Intelligence and Security Committee, so that it can also scrutinise this process and examine the information it is given. The No. 1 responsibility for us all, and certainly for our Government, must be the protection of our national security.

Today we will speed through this Bill and wish it well. We want to see stronger action against Russia at this time of international crisis. We want to see stronger action against economic crime that puts us to shame and undermines our economy and the rule of law. We need action on transparency, on regulation, on enforcement and on accountability—too many areas where there has not been progress for too long. We also need action so that the UK plays our part and properly gives sanctuary to those fleeing the Russian bombardment in Ukraine. They need our support and help here in the UK, and that is not just family members, but those more widely who need our support. We must vow that never again will we allow our major institutions to be so influenced by corrupt elites and that we will give those involved in corruption and economic crime no place to hide. Be it Russia or anywhere else in the world, we will no longer stand for this here in the UK.

Lindsay Hoyle Portrait Mr Speaker
- Hansard - - - Excerpts

I start off by saying that I expect Members to take around five minutes.

16:38
David Davis Portrait Mr David Davis (Haltemprice and Howden) (Con)
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Given the nature of the debate, I will try to make my simple points in three minutes. [Interruption.] There were cheers from the Government Benches, anyway.

I suspect that we will all vote for this Bill. The House is of one in wishing to stop the murderous behaviour of Putin in Ukraine and to punish him and his elite for carrying out such evil crimes against humanity. That is not to say this is a perfectly crafted Bill. To some extent, that is inevitable; it has had to be constructed in a hurry from an original economic crime Bill that was designed for a different purpose under different circumstances. Worse than that, in some ways, it is being operated by three or four Departments, some of which are operating in areas that they are not used to, which is often not a pretty sight, and I speak as an ex-Minister in that respect.

The Government, I think, will do two sensible things. First, they will accept most, or many, of the amendments that have been tabled, which is sensible because most are thoughtful and all are well intentioned. Secondly, the Home Secretary said that there will be a second economic crime Bill and of course we are making plans and projections for that. One of its functions will be to correct the mistakes that we make today, of which there will be many, because we are dealing with a difficult and sophisticated adversary and we are making decisions quickly.

Iain Duncan Smith Portrait Sir Iain Duncan Smith
- Hansard - - - Excerpts

I want my right hon. Friend to extend his speech slightly. Does he agree—I hope my right hon. Friend the Home Secretary is listening too—that whatever happens with the Bill, we are clear that those in the other place who deliberately amended previous legislation to water down the provisions that would have seen us go after many of these people, have some warning not to do that ever again?

David Davis Portrait Mr Davis
- Hansard - - - Excerpts

I am pretty sure that they will hear that warning when they look back at this debate.

I do not often quote Lenin, but it is probably appropriate. As he famously said,

“A bayonet is a weapon with a worker at both ends,”

which is also true of the Bill. It will do great harm to the Russian economy and to our adversaries in Russia, but it will also do some harm to us—or at least, the retaliation will—and it will particularly hit the least well-off. We will see greater price inflation, less growth, less trade and therefore fewer jobs. We must recognise that when we undertake what we are doing here. We can make Russia a pariah state but Putin will retaliate, and we must be ready. We need to be ready for fuel crises, cyber-attacks and ludicrous threats from the Kremlin.

Beyond the Bill, there are many further things that we can do in the west and we should be ready to do them. To pick one example, the allies should be ready to reduce every Russian embassy to a bare minimum—to skeleton status—by the expulsion of diplomats at the first sign of retaliatory action from Russia. It must be clear to Russia that it will pay if it retaliates again.

We have said, and we must keep saying, that the Bill is not aimed at punishing the Russian people—that is incredibly important. It should target the Russian Government, Putin and his henchmen, which is why the actions in the Bill against oligarchs are as important as the actions against Russian banks and commercial institutions. There was some briefing from Whitehall over the weekend that implied that they are not, but that is wrong.

We have all heard the rumours that Putin has something like $200 billion of personal wealth. He does not hold any of it himself; it is held by the 140-plus oligarchs around the world. Targeting them, therefore, is at least as important as targeting the Russian state banks. To do that properly, we must act fast, which is the thrust of my new clause 29, which I will speak to later in Committee.

We should not kid ourselves. This is not an economic crime Bill, but an economic warfare Bill, and it is a war that liberal democracies cannot afford to lose.

Rosie Winterton Portrait Madam Deputy Speaker (Dame Rosie Winterton)
- Hansard - - - Excerpts

I call SNP spokesperson Alison Thewliss.

16:43
Alison Thewliss Portrait Alison Thewliss (Glasgow Central) (SNP)
- View Speech - Hansard - - - Excerpts

SNP Members are delighted to see this well-overdue Bill. We have called for action on these issues many times in this Chamber, in Bill Committees, in Select Committees and in Westminster Hall, yet no action has been taken until today. The measures within the Bill are far from the full package of measures that we need to tackle economic crime and we look forward to hearing the further measures that will come forward soon.

Tom Keatinge of RUSI has said:

“War has not made this money dirty—it has been here, corroding society and undermining the country’s institutions, for decades.”

The failings that we hope the Bill will address have long been identified, but have been ignored through incompetence, disinterest or worse. That goes to the heart of why the Bill is urgent. The money has been sloshing around in the UK and people have benefited from it, but they are not the ones from whom it was stolen. We need to take further action to ensure that we address that.

Stewart Hosie Portrait Stewart Hosie
- Hansard - - - Excerpts

My hon. Friend is absolutely right about where the money was stolen from, and many of the kleptocrats the Home Secretary mentioned made their money by looting Russia after Yeltsin’s privatisations. Does she agree with me that no matter how many times that cash has been through the laundromat, it is still stolen and is still unexplained wealth, and does she share my concern that the use of unexplained wealth orders will never actually get to the root of where some of that grubby stolen money came from?

Alison Thewliss Portrait Alison Thewliss
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My right hon. Friend is absolutely correct to point that out. This money has been around the world many times and we may never ever find out where it has come from, but we could take further action to stop it coming through bank accounts in this country, helped by lawyers and accountants in this country, and the Bill does not go far enough to deal with the people who are facilitating this economic crime.

On the register of overseas entities, Members will know that I sat on the Joint Committee with the Lords on the draft Registration of Overseas Entities Bill, because I have mentioned it several times before. I cannot understand why it took so long before we had this legislation coming before us today—and in such haste, I should say. Introducing the registration of overseas entities is intended to shed light on the individuals behind overseas companies that control property in the UK, and that is welcome, but again it is too late. The proposals were discussed in detail in that scrutiny Committee, and I still do not understand—I would like some kind of explanation from the Minister, if he would stop chatting—why the Government twiddled their thumbs for four years instead of getting on with implementing such legislation.

I should note that the Scottish Government have moved on this. The register of persons holding a controlled interest in land in Scotland will come into effect and start operating, by taking names on the register, on 1 April. I seek some information from Ministers about what exactly will be the interaction between this register of property in Scotland, which includes overseas entities, and the provisions they are trying to pass today. It has been remarked by a number of organisations that the Scottish register will actually have transparency at its heart and has better transparency than what Ministers are proposing with their register. I would ask that they go to that higher level, rather than ask Scotland to level down on what we are putting on the register of persons holding a controlled interest in land.

Transparency International has estimated that £6.7 billion of questionable funds has been invested in UK property since 2016, of which at least £1.5 billion-worth has been bought by Russians accused of corruption or links to the Kremlin. When we take into account the secret nature of these transactions and how hard it is to get the actual information, the real figure is likely to be much higher.

The Bill as it stands will give the owners of about 95,000 foreign-owned properties six months to reveal their identities. I am glad that the Government have cut that back from the original 18 months they proposed in the draft Bill, but as things stand six months gives people an awful long time to move their money, down what Oliver Bullough calls the “Moneyland tunnel”, to hide those assets and to spirit them away to where they cannot be seen and cannot be found. Such secret jurisdictions will be used by the people who want to do this.

I would like to know from the Minister whether this register will be to the same standards as the Companies House register just now, because the Companies House register is basically full of guff. I have said this many times, but someone can register a company to “Anytown, Anyplace”. I could register one in the Minister’s name if I wanted to, and if I did not give any indication that I had done that, I would get away with it scot-free. The Minister really needs to tell the House what the standards of registration for these companies will be.

Our new clause 4 suggests that Companies House should be an anti-money laundering body, and it should use the Government’s Verify scheme to make sure that a person is a real person when they register a company at Companies House. I want to know what this register of overseas entities is going to look like and how we can make sure that the data put in will be maintained.

Kevan Jones Portrait Mr Kevan Jones
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Does the hon. Lady agree that full transparency at Companies House of who owns companies is in everyone’s interests? It was only because of the investigation undertaken by Caroline Wheeler of The Sunday Times that we discovered that Viktor Fedotov was one of the beneficial owners of Aquind, a company that has given huge sums of money to individuals in this House as donations. Does the hon. Lady think it would perhaps have helped some of those individuals decide whether to accept that money if they had known that Fedotov was an owner, especially because of his track record of alleged corruption in the Transneft gas pipeline deal?

Alison Thewliss Portrait Alison Thewliss
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That is a fair point, and I absolutely agree. I will speak in the sanctions part of my speech about the fact that the Government do not know who has what in order to sanction them because the Companies House register is such nonsense, and we do not have a good enough understanding of who actually owns property in this country right now.

Liam Byrne Portrait Liam Byrne (Birmingham, Hodge Hill) (Lab)
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Does the hon. Lady share my concern that there are still 11,000 companies at Companies House that do not have a person of significant control registered, yet there have been only 119 prosecutions? Surely we have to transform the regulatory power of Companies House to get rid of this nonsense.

Alison Thewliss Portrait Alison Thewliss
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I absolutely agree. I was going to speak about Scottish limited partnerships later but will jump forward to that bit of my speech now, because it ties in nicely with the point the right hon. Member makes.

The House will have heard me speak on numerous occasions about SLPs, which have the distinction of being able to hold assets—property, yachts or whatever else—as a company. They have been used in the past as a means of funnelling money out of Ukraine as well other countries. OpenDemocracy reported last year that it had found €35.9 million in an SLP account which had been stolen from people in Ukraine through a fraud; Remini Consulting was the company involved in that. As the right hon. Member pointed out, the key to tracing those involved in such frauds is the persons of significant control.

SLPs have been obliged to have a person of significant control for several years now; that is a reform the SNP pushed for and the Government said they were going to introduce. Sure enough, the numbers of SLPs on the Companies House register decreased, and the number of people who were not registering as persons of significant control also decreased, but according to the most recent figures 203 companies are still SLPs with no person of significant control registered. That is just not right, and that is not being pursued either. Of all the thousands of SLPs that have existed and that still exist, only one has been issued with a fine for not having a person of significant control, and that fine was £210. That is absolutely pathetic, and it highlights that this Government are not even bothering to enforce the rules they have.

The Government are proposing in this economic crime Bill to fine companies that do not comply, but they are not fining companies that do not comply right now. That is not just about not enforcing the rules; it is money that is walking out of the Treasury—money they could have had to spend on services and do other things. They are not enforcing the rules, and they are not fining the companies that are not playing by the rules—they are not striking them off the register; they are not doing anything to make sure the rules are complied with.

This Bill does not go far enough to address that. The fines suggested are £2,500 a day, which is nothing to many of the companies who are shifting billions of pounds through shell companies. That is just the cost of doing business; it is nothing to the oligarchs with deep pockets stuffed full of Putin’s money, and the Government should be doing a hell of a lot more about that. At this moment, welcome as this Bill is, they are not doing anything to address that imbalance.

John Baron Portrait Mr John Baron (Basildon and Billericay) (Con)
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I can tell the hon. Lady that there are concerns across the House on this issue, as she can see from those of us who have signed various amendments. In the last five years the number of prosecutions for money laundering has fallen away. The number of prosecutions from the Serious Fraud Office has fallen away, and the National Crime Agency has managed just five prosecutions a year on average. Does she agree that laws and regulations are only worth their salt if properly enforced, and that we need to come together on both sides of the House to address this issue and make sure moneys are available to properly fund our enforcement agencies?

Alison Thewliss Portrait Alison Thewliss
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I very much agree with the hon. Member and acknowledge the strength of cross-party support in the House on this issue. I am sure he has read the Treasury Committee’s report on economic crime, which highlighted that not enough has been done on enforcement or invested in the law enforcement agencies to give them the skills that they need. Without that, the crooks will continue to be several steps ahead of the law enforcement agencies, which do not have the resources, the skills or the talent to get around these schemes and stop them in their tracks.

I agree with the hon. Member for Oxford West and Abingdon (Layla Moran) about the loophole in the Bill that she highlighted, which allows individuals or their assets to be exempted if so doing would be in the interests of the economic wellbeing of the United Kingdom. That gives the Government a whole lot of scope to exempt people from the Bill. There are clearly huge sums of money involved, and the economic wellbeing of the United Kingdom is ailing in many respects because of many things—not least Brexit—so they could look to that as a loophole. That must be closed. I do not think I got in to put my name to amendment 4 in time, but I fully support what she puts forward in it.

On sanctions, the Bill sets out a series of reforms that are likely to intensify sanctions enforcement. The SNP pushed for greater action on sanctions and their enforcement back when the Sanctions and Anti-Money Laundering Act 2018 was going through the House. There are limitations for the Office of Financial Sanctions Implementation: as I mentioned earlier, when we do not know where people are hiding their money, it is difficult to track them down, impose sanctions on them and enforce those sanctions. A great deal more needs to be done in that regard as well. As my colleague on the Treasury Committee, the hon. Member for Wallasey (Dame Angela Eagle), mentioned earlier, the OFSI has only 37.8 staff, which does not seem sufficient to the size of the task it faces. I hope that it will be able to get more resource to do that. Clearly no one could have quite anticipated the scale of the current sanctions, but it needs further resource for sanctions, both so that it has the expertise it needs and to ensure that our sanctions are aligned with those of other jurisdictions around the world.

Finally, according to figures put out at the weekend by the Minister for Brexit Opportunities and Government Efficiency, although the UK’s sanctions are only a fraction of the EU’s or US’s efforts, they have captured more in value than either of them. That is an interesting and curious point, and a serious one if it indicates how much Putin-related cash is swilling around in London’s economy. If the figures are to be believed, the UK has more in assets belonging to oligarchs than the EU and the US combined, which really shows us the scale of the problem that the UK Government have got themselves into.

The SNP supports the measures in the Bill that will strengthen measures on economic crime. Although they do not go far enough or fast enough, they are long overdue. We look forward to moving some amendments later this evening—and, if the Government have any sense at all, they will accept them.

None Portrait Several hon. Members rose—
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Rosie Winterton Portrait Madam Deputy Speaker (Dame Rosie Winterton)
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Order. I am going to introduce a five-minute time limit. However, I am sure that right hon. and hon. Members will be aware that, if they take less time than that, we will get to Committee stage more quickly, as they might wish to do. Those who particularly wish to speak in Committee might bear that in mind as well.

16:58
Robert Neill Portrait Sir Robert Neill (Bromley and Chislehurst) (Con)
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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.

17:03
Margaret Hodge Portrait Dame Margaret Hodge (Barking) (Lab)
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I will try to keep my remarks short. Like others in the House, I welcome the Bill, but it should never have taken the nightmare of a war in Ukraine for us to act and to halt the avalanche of dirty money that has been allowed to enter Britain today. We are the jurisdiction of choice for not just Russian oligarchs, but kleptocrats, money launderers, people traffickers, smugglers, terrorists and other villains. That is the result of the failure of this Government and previous Governments to act. The Labour Government also had some responsibility for this, but the inaction over the last decade or so is down to this Government and the previous Conservative Governments.

As every other hon. Member has said, the Bill has to be the first step. I look forward to a further Bill coming forward swiftly at the beginning of the next Session so that we can enact other important measures. The other point that other hon. Members have made is that the Bill is not something great or inventive. It was first promised to us by David Cameron; I think that was in 2015, although others think it was 2016. There was then a massive consultation, pre-legislative scrutiny and a Bill in 2018. It was in the Queen’s Speech in 2019 and reinforced in the G7 summit in Cornwall, and then we heard that there was not going to be an economic crime Bill. It was all gone, and then war came in Ukraine and suddenly it has re-emerged.

The implications of the Bill go well beyond Ukraine, although the Bill is vital as we try to put pressure on Putin and his utterly dishonourable gang of cronies, and to de-escalate the conflict through economic sanctions. We need to move faster and go further. Some very important amendments have been tabled; I will not use my time on them now, because hon. Members will want to talk about them in Committee, but they include freezing an oligarch’s assets while lawyers consider the case for sanctions, and ensuring appropriate funding so that we do not just put something into law without using it to go after the oligarchs properly.

John Baron Portrait Mr Baron
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Is the right hon. Lady as concerned as I am that some estimates put the cost to this country of economic crime at nearly £300 billion, yet we spend something like only £850 million on all the nationwide enforcement agencies? Other countries spend a lot more and seem to have a higher prosecution success rate. Is that a coincidence?

Margaret Hodge Portrait Dame Margaret Hodge
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No, of course not; I completely concur. The latest figure I have seen for the cost of economic crime to the economy is £260 billion, so the Government must provide tougher regulations, more effective enforcement, proper resourcing and clear accountability—those are the key things we need.

I thank the Government for listening to our representations. Even the Bill before the House includes some very welcome changes, such as tougher penalties and greater accountability, with an annual report to Parliament—I remember arguing that case as the legislation went through, and it being resisted. The Government’s new clauses will speed up the processes, and I hope that in Committee there will be further improvements.

When the Minister winds up, will he say whether he has looked at amendment 3, which stands in my name and that of other hon. Members? It would address the loophole that I think the hon. Member for Bromley and Chislehurst (Sir Robert Neill) mentioned; I think it is a drafting mistake, but it looks as if individuals could escape the transparency that the Bill intends by using nominee directors and corporate trust providers. We have received legal advice, a copy of which I have shared with the security Minister; I wonder whether the Minister answering this debate has looked at it and whether he will respond on the drafting issue.

This is not an economic crime Bill; it is important legislation that should have been put in place years ago. The economic crime Bill is still desperately needed and I look forward to urgent discussion of it. In the meantime, I hope we will have time for the proper consideration of our amendments.

17:08
Nigel Mills Portrait Nigel Mills (Amber Valley) (Con)
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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.

Robert Neill Portrait Sir Robert Neill
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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 Portrait Nigel Mills
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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.

17:12
Layla Moran Portrait Layla Moran (Oxford West and Abingdon) (LD)
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It is a pleasure to follow the hon. Member for Amber Valley (Nigel Mills), and I associate myself with his comments. Although, as the right hon. Member for Barking (Dame Margaret Hodge) said, it has taken a war for us to get to this point, I find myself forgetting how often I go to other countries and speak to people there, or speak to family members who live abroad, who say how they look to this place for what should be best practice. Yet when it comes to tackling economic crime we have been lagging behind. The Secretary of State said that this was done speedily, and I am reminded of when I was a teacher and people used to stay up all night to do the homework I had set three weeks earlier. The Government could have done this better and sooner, and they did not, but we are here now.

Kim Johnson Portrait Kim Johnson (Liverpool, Riverside) (Lab)
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The hon. Lady is making an excellent speech. Does she agree that actions speak louder than words? We have had an awfully long time to get this right—it goes back to 2016—so let us see some action, and action now.

Layla Moran Portrait Layla Moran
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I thank the hon. Lady for her intervention, and she is right. I do not say this in any other spirit than one of wanting to help. I thank the Ministers for the ways in which they have engaged with us, and I will keep working constructively with the Government on this, because we need to get it right, and not just for the people of Ukraine. Before I came into the Chamber today, I was talking to some Russians in Russia. I cannot name them and will not do so, because if I did, it would put their lives in danger. Members will be aware that on Friday Putin put in place legislation to give them 15 years’ imprisonment for simply saying that Putin is waging a war, as opposed to an exercise or a peacekeeping mission. They describe what is happening as strict and cruel legislation designed for political oppression, and they are asking Members of this House to work with the Russian community here in the UK to get the message out through their networks and to their friends about things such as how to circumvent Putin’s internet clampdown in Russia in order to get the BBC in Russian to people on the ground. There is something that all of us can do to help those Russians who want to help us here, and who are desperate not to be tarred with the same brush.

I look forward to the Committee stage that will take place later this evening, so I shall be brief, but I would love to hear from the Minister what exactly will be in the economic crime Bill part 2, especially in relation to the Companies House reform that we seek. I also want to associate myself with what has been said about enforcement. When I asked doughty third-party groups such as Transparency International and the Royal United Services Institute why other countries—America, for instance—had managed to include far more companies and individuals on their lists, I was told, “They have fewer laws, but they enforce the hell out of them.” Can we please be a country that enforces the hell out of this and any further legislation that we might want to introduce?

We also want to ensure that the second Bill clamps down on enablers. Amendments have been tabled to that effect, but we know that stand-alone legislation will be required for this purpose. It is not just the lawyers who are involved; it is the PR firms, the accountants, the banks, and all the others who knew what they were doing. It should not be ‘a case of acting “recklessly”—there are some get-out clauses in this Bill that we need to be careful about—because those people knew or decided to turn a blind eye, and that can no longer be good enough. I appreciate that this cannot be covered in today’s Bill, but when will it be covered?

I look forward to working with the Minister in future iterations of these matters, and I especially look forward to the Committee stage, when we shall be able to discuss some of the holes in the Bill in more detail.

17:16
John Penrose Portrait John Penrose (Weston-super-Mare) (Con)
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At bleeding last! It is here. We have been waiting for years. Alleluia! It has finally arrived.

We have all heard some of the history of how long we have been waiting for the Bill, but it is also true to say that a few years ago Britain was at the forefront of this legislation. In fact, in some respects we are still the one-eyed man in the land of the blind. There are still many other countries that have not taken even the initial step of introducing beneficial ownership transparency, which we have long had in this country. But—and it is an essential “but”—because we have the City of London and the wholesale financial markets that are the envy of so many countries, we have to live up to a much higher standard than other countries, and that means that we have to go further.

We know that we have loopholes in our existing laws, and it is well past time for us to plug them. The Bill is the first step on that road, but it is only a first step, and I was delighted to hear the promise of more in the White Paper and the promise of a second Bill. Like the right hon. Member for Barking (Dame Margaret Hodge), I hope that that will come early in the next Session, because only if we do both those things in parallel and in tandem will we finish the job that was started back in 2015 or 2016, depending on which version of history we adhere to.

I am also delighted at the acceptance of the manuscript amendment tabled in my name and that of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), which aims to speed up the application to deal with the oligarchs who own property in this country and will even now be searching for buyers to palm the assets on to so that they can get their money out, because they know that we are moving and also know that, as matters currently stand, they have some time to complete their transactions. It is vital that we move faster, and I am delighted that we will have a chance to consider the manuscript amendment.

Bob Stewart Portrait Bob Stewart (Beckenham) (Con)
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I thank my very good friend for allowing me to intervene. I hope and presume that this Bill will freeze assets; will the second part of the legislation, when it comes, allow their confiscation? I hope that it will, in which case we might even put it to good use and help the people of Ukraine. Is that out of the question?

John Penrose Portrait John Penrose
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That is a question that I think the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), who I know is listening carefully, will be able to answer in his summing up. To the point raised by my right hon. and gallant Friend the Member for Beckenham (Bob Stewart), we cannot sanction an oligarch’s cash if we do not know where it is, so the essential initial step is to rip back the veils of anonymity so that we can find it, so that we know what we are looking at and so that we can at least stop it leaving the country before we move on to those other steps.

There are two other points that I hope the Minister can address in his summing up. They relate to things that could be in the Bill but are not. I hope that they will appear later or that they will appear in the follow-up Bill that we are being promised. The first is the need for proper measures to deal with whistleblowers. We have heard a great deal already about the importance of enforcement. Enforcement is vital, but it is so much faster and so much better applied if proper whistleblowing legislation is in place. As with transparency of beneficial ownership, a few years ago this country’s legislation on whistleblower protection was among the best in the world, but the world has moved on and other countries have overtaken us.

We urgently need to improve the quality of our whistleblower legislation. It is good that the Minister who will respond to this debate is from the Department for Business, Energy and Industrial Strategy because it is in his Department that the whistleblowing team sits. I fear that it is well behind the curve of where it needs to be if we are going to move promptly on this. We have a long way to go and a great deal of thinking to do, and I hope that he will be able to make some commitments when he gets to his feet at the end of this Second Reading debate.

Kevin Hollinrake Portrait Kevin Hollinrake
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New clauses 14 and 27 both deal with the establishment of a commission for the protection of whistleblowers to do exactly what my hon. Friend is setting out.

John Penrose Portrait John Penrose
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I acknowledge that point. I am not sure whether the Government will be able to accept those proposals, but if they do not, I hope they will be able to make some commitments about what they intend to do very soon to plug the undoubted gaps.

My final point is about trusts. My hon. Friend the Member for South Thanet (Craig Mackinlay) intervened on the Home Secretary to make a point about trusts, and it is essential that we do not forget that one of the issues we are dealing with here is to do with companies, because they have been proven to be an excellent vehicle for covering up the ownership of assets. We have also heard from the hon. Member for Glasgow Central (Alison Thewliss) about the problems that have accrued for Scottish limited partnerships. It is equally true that trusts could be, and potentially are being, misused in exactly the same way. This legislation does something on the use of trusts when it comes to unexplained wealth orders, but it does not do the same thing for the disclosing of the settlers, the trustees and the potential beneficiaries of trusts for everything else. Those vehicles could easily be misused, and we do not want to come back in a couple of years saying, “If only we had thought to plug that loophole at the same time.” I hope that my hon. Friend the Minister will be able to deal with that omission and promise us some progress on that very soon.

None Portrait Several hon. Members rose—
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Rosie Winterton Portrait Madam Deputy Speaker (Dame Rosie Winterton)
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Order. I have no problem with interventions, but it would be helpful to other colleagues, especially if the House wants to get on to the Committee stage, if Members could stick to their five minutes even if they take interventions.

17:23
Peter Dowd Portrait Peter Dowd (Bootle) (Lab)
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The Bill is a first step, but the proof of the pudding will be in the eating. It should not have taken the tragic and brutal invasion of Ukraine to see Government action on economic crime. For too many years, we have heard only warm words from the Conservatives. Our British overseas territories are often at the centre of these networks of dodgy financial flows, depriving citizens everywhere through tax avoidance and evasion. We have become the No. 1 safe harbour for criminals and kleptocrats the world over, and that is a shameful record. Despite this, part 1 of the Bill, on the registration of overseas entities, has sat on the statute book in draft form since 2018. Why? Indeed, only a couple of weeks ago, the Government had pulled their economic crime Bill from the legislative calendar altogether.

Because they have avoided this matter for years, the Government are now forced to rush this complex legislation through in a day. Over that same period, Labour Members have repeatedly requested for today’s register to be introduced, along with several other corporate transparency measures proposed in our tax transparency enforcement programme. We have also called repeatedly for the introduction and strengthening of Magnitsky provisions. No one knows quite what has influenced the Government’s dither and delay on economic crime. Coincidentally, lawyers at the Good Law Project surveyed Russian donors to the Conservative party at the weekend and found that not a single one has been included on the sanctions list. Perhaps that is pure chance, but perhaps not.

The register is crucial to demonstrating how UK property is still used to stash illicit wealth. Transparency International has identified that £1.5 billion-worth of property in the UK has been bought by Russians accused of corruption. The glaring hole in part 1 of the Bill was the 18-month transition period for the full register, which has been reduced to six months. Nevertheless, six months is plenty of time for people to dispose of assets through their army of lawyers—we have called for 28 days. Does the Minister accept that six months is untenable?

A coalition of organisations including two all-party parliamentary groups, Transparency International and Tax Justice UK suggest amending the money-laundering regulations to strengthen due diligence on property transactions in the interim. This is one way of limiting the obvious get-out offered by a six-month compliance timeframe.

The sanctions for failing to comply with the register are not sufficient either, given the plentiful resources of those who wish to avoid the spotlight. The Government have again sought to address this via amendment. One wonders why they sought to introduce such a lax framework in the first place.

Clause 18 gives wide powers to the Secretary of State to exempt individuals from the register. In particular, the exemption

“in the interests of the economic wellbeing of the United Kingdom”

seems pretty dubious. Can the Minister give examples of circumstances in which such exemptions will be applied? After all, many of the people who will hopefully be targeted are ostensibly in this country because it is in the interests of the economic wellbeing of the UK. What has changed?

Clause 4 allows for a statement to be provided to the register that does not identify the beneficial owner of an entity. Why? Little guidance is given in the schedules on the circumstances in which such a move would be appropriate. I cannot think of many such circumstances, so will the Minister enlighten the House? Allowing lawyers to submit excuses in place of a beneficial owner will surely be a major stay-out-of-jail-free card, almost literally, for anyone hoping to maintain their secrecy. This provision should be removed or much more narrowly defined.

Finally, there is the matter of our Crown dependencies and overseas territories. While serving as shadow Chief Secretary to the Treasury, I was among the many calling for public country-by-country reporting by multinational companies, to ensure they are not engaging in tax avoidance. Public reporting has still not been brought forward by the Government, despite the clear support of this House. We cannot allow the Crown dependencies and overseas territories to be used to undermine stronger rules on beneficial ownership in Britain.

I hope hon. Members think hard about this, and that this has not just been a Damascene conversion at the last moment. This awful war shows that the Conservative party can no longer dither and delay. The time for half measures has long passed. We must now act fully and decisively to end the UK’s reputation as a sanctuary for economic criminals.

17:28
Saqib Bhatti Portrait Saqib Bhatti (Meriden) (Con)
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I refer to my entry in the Register of Members’ Financial Interests as a practising chartered accountant and auditor who has worked on and helped to design many anti-money laundering schemes with companies.

Before I address the merits of this excellent Bill, I will speak about my visit on Friday to the fantastic WMG Academy for Young Engineers in Smith’s Wood in my constituency. I was subjected to what I can only describe as an impromptu interrogation by 10 of its exceptionally talented students. I was struck by how the phrase “world war three” kept coming up in the discussion. The third time it was mentioned, I asked the students whether they thought world war three is inevitable, and I saw a row of nodding heads.

This Bill is incredibly important, and we should not underestimate what today means to my constituents and to many people across the country. The Ukrainian people have shown immense bravery and honour in how they have dealt with the Russian onslaught. Thanks to the free press across the western world, journalists and social media, we can see in real time the great tragedy that is unfolding before our eyes. The indiscriminate shelling of residential areas has destroyed not only buildings but lives and dreams. The callous bombing of refugee corridors, residential areas and non-military targets has resulted in the murder of innocent people across Ukraine. Even as we speak, the Ukrainian people are losing their families, children and loved ones. The carnage they are experiencing will be another sad chapter in a long history of brutality in Europe—a brutality that we had all hoped we had left behind.

War is unpredictable. The slightest miscalculation could see an escalation that could lead to greater devastation and spill over into a larger global conflict. That is why this Bill, today, is so important: we in the west need to do everything we can to ensure that Vladimir Putin realises, or is made to realise, the magnitude of his miscalculation so far. The people whom he has bankrolled, and who have in turn enabled him to be an international murderer and thug, need to know that in future they will not be able to do so without repercussions.

The sanctions regime, along with the measures taken with our international partners, means that the package we are imposing has some of the most severe sanctions Russia has ever experienced. In particular, the removal of the test of appropriateness in the designation of individuals and entities and the removal of the constraints on designation by description will mean that groups such as the Russian Duma and the Russian Federation Council can be sanctioned much more quickly.

I particularly support the reduction in the transition period for the registration of the beneficial owners of overseas companies. I know the issue has been the subject of much tension, but sufficient time must be given in order that the changes can be effective. Companies House must have in place a regime to police the register. It should not take too long to register new changes, but it may well take some time to get ready a detailed register that goes back in time.

I hope that when he responds the Minister will give some further detail on the resources that will be allocated to ensure the effective functioning and policing of the register. Perhaps he will also clarify what personal data will be needed, or whether similar thresholds will apply as apply for persons with significant control. Will exemptions for the data provision exist, as they do in respect of the UK register of people with significant control?

Every piece of legislation that we pass in this House serves a great purpose. Over the weekend, I reflected on the comments of the students I met on Friday. After the uncertainty of covid, they were clearly grappling with the uncertainty of a global conflict, as many of us are. The Government have led the way on standing with the Ukrainian people. We have given them military support and medical support and, through this Bill, we will be able to ensure that there are some of the strongest economic repercussions for those who flout international law.

We in this House have made it clear that this barbaric war against the sovereign, democratic and free nation of Ukraine cannot be ignored. If it were to be ignored, there would be grave consequences for the free world. We must do all we can to avoid further conflict but be resolute in our actions. This Bill sends a clear message today: we will not stand by and let the ideology of a 21st century despot prevail over the rights of a free, democratic nation such as Ukraine.

17:32
Andy Slaughter Portrait Andy Slaughter (Hammersmith) (Lab)
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I am sure we all agree that the Bill is urgent and that it is good as far as it goes, but it is inadequate because it has been hastily drafted, and it was hastily drafted because the Government dragged their feet.

If I understood the Home Secretary’s argument earlier, it was that the number of amendments that have been tabled shows the degree of support for the Bill. The number of amendments shows the gaps in the Bill and its inadequacies. Hopefully, we will correct some of them in Committee later, but I would like to hear from the Government which of the amendments they propose to accept. If they do not intend to accept them on technical grounds, I would like to hear them at least give assurances that during the Bill’s passage they will bring forward their own versions of the relevant measures.

I said earlier to the Home Secretary that there is a gap between the rhetoric and the reality. I was thinking of a briefing given to the Financial Times last week on the same day as the Bill was published, which said:

“UK cabinet minister Michael Gove is drawing up plans to seize British property owned by Russian oligarchs with links to President Vladimir Putin, without paying them compensation. Ukrainians fleeing their homeland could be housed in the lavish UK residences of oligarchs hit with sanctions under the proposals discussed by Gove”.

I do not see very much of that in the Bill.

What we have seen was initially 18 months and now six months to publish information. Yes, there will be penalties for the failure to publish that information, but there will also be ample warning and time to either disburse or transfer those assets. Whether the Government accept the proposal from the Chairman of the Justice Committee, the hon. Member for Bromley and Chislehurst (Sir Robert Neill), that it should be three months, or our proposal that it should be 28 days, that period has to be cut down.

In addition to that—I am looking at new clause 29, tabled by the right hon. Member for Haltemprice and Howden (Mr Davis)—we need the early freezing of assets to prevent them from being dissipated during that period. The Government, if one believes their own briefing, think that we should be seizing those assets. Where are those proposals? Where is the comprehensive coverage of people whose assets can be frozen and what assets there are likely to be? How are they going to drill through the elaborate network of shell companies in order to do that?

That brings us on to another point that is absent from the Bill: regulation and enforcement. Let us be clear: we need not more enforcement agencies, but the ones that are there to work properly, and the National Crime Agency and the Serious Fraud Office do not. That is partly because of a lack of funding, partly because they need staff of a higher quality and ability, and partly because of the revolving door between those agencies and defendant law firms, which goes on all the time at the moment. We have got to the stage now where the Attorney General has ordered an investigation into the head of the Serious Fraud Office because cases are collapsing, or because the wrong targets are being pursued—the minnows rather than the sharks. Indeed, we have the absurd position where the Serious Fraud Office itself is a target of SLAPP—strategic lawsuit against public participation—litigation by the Eurasian Natural Resources Corporation.

I hope that we will have time to discuss the amendments of my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) on preparing legislation on SLAPP and on protecting whistleblowers. These are difficult things to do. Oligarchs are entitled to lawyers, but they are not entitled to misuse the law in this country. This legislation requires careful drafting, as will the seizure of assets. These are draconian and dramatic steps that our courts are not used to taking. To make sure that they are watertight, but also fair to all parties, the measures require careful drafting; they must not be done at the last minute on the back of an envelope.

I was delighted to see Tom Burgis win his case against ENRC last Wednesday. It shows that, if they are given the tools, our courts are prepared to stand up in that way. I was astonished to read this comment by the losing party, ENRC:

“We have seen a growing campaign of xenophobia pervade aspects of the media and parliament that targets individuals and companies based on their nationality, including bizarrely ENRC, which is a UK company with Kazakh shareholders.”

I do not think that Tom Burgis is anti-Kazakh and that such prejudices were driving him when he wrote his book, “Kleptopia: How Dirty Money is Conquering the World”. On the contrary, he was doing us all a service. The Government need to rise to the challenge now. It does not help if they are not clear on where the donors to the Conservative party are coming from at present.

17:37
Bim Afolami Portrait Bim Afolami (Hitchin and Harpenden) (Con)
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Many of my colleagues— interestingly, more on the Conservative Benches—are fond of quoting Lenin these days. My right hon. Friend the Member for Haltemprice and Howden (Mr Davis) did so earlier. One Lenin quote goes something along the lines of, “History needs a push.” It does feel that the march of history, regrettably, by the actions of Vladmir Putin, has given us a push. It has given this economic crime Bill a push. But it is important that we bear in mind the words of my hon. Friend the Member for Amber Valley (Nigel Mills) in his excellent speech that this legislation is here for the long term. This is not dependent on what is going on in Ukraine, regrettable though that is. Some of the actions that the Government have rightly taken are temporary and designed to deal with the Ukrainian issue. But this is for the long term. Many Members on both sides of the House have worked for that and we need to bear that in mind as we legislate.

On the register of overseas entities, in my view, the proposed requirements will not disincentivise honest investors into the British market. We are a place that is open for business. We are pro-business, but we want clean money and this Bill completely bears that in mind and does the right thing.

I also want to push back on some colleagues who have picked up on Opposition amendment 12, which talks of setting up the register of overseas entities within 28 days. All of us want this to happen as soon as possible, but I fear that many in the House underestimate the challenge of turning Companies House—we have heard lots of war stories about various things at Companies House that are not as we would like them to be, and I would agree with those—from effectively an administrative office into something like a quasi-regulator. That is hard. It will take time.

There are those who say, “Well, you should legislate anyway and force Companies House to do it quickly.” Yes, we could; we could force it to do that tomorrow, but the next day, when our constituents, the media and various other people said, “Why is Parliament not enforcing the law it has passed?” the reason would be that we were not capable of doing it through Companies House. To some degree, these things are arbitrary, but I think six months is a fair period in which to do those things. Of course, I will listen carefully in Committee to what the Minister says from the Treasury Bench.

I have a couple of technical points for the Minister. The first is whether, in focusing on the holding and transferring of qualifying interest in land as a trigger point for this Bill, the Bill captures sales of property-owning companies—share sales, not asset sales. That is one point that should be cleared up. Secondly, does the Bill cater for nominee arrangements that could allow the purpose of the overseas register to be easily evaded? That would be an interesting point for the Minister to clarify.

The Office of Financial Sanctions Implementation has come up in the debate. The really good and important thing the Bill does is to move us from a position where the office could only impose penalties if an individual

“knew or had reasonable cause to suspect”

that sanctions would be breached, to a strict liability position where, if the sanctions are breached, people can be fined. That is the right approach, it is overdue and I commend the Government for taking it.

Speaking as somebody who was formerly in the City of London as a lawyer, as an adviser and in a bank, it is important that the City of London helps this House and the Government to take a lead here. The world is looking at the City to see whether it can put these things in place in a co-operative way, and by that I mean everybody from the institutions to the advisers and all the rest. Morals and markets need not and should not be mutually exclusive. That is of critical importance.

We are all politicians—indeed, we are all human beings; those two things are not always mutually exclusive either—and there are heightened tensions in this House and across the country. While we legislate, we must bear in mind the rule of law. When we talk about seizures of assets, that is a serious business that should never be done on a whim. This Government, with this Bill and the other measures, have struck the right balance between doing what we need to do and ensuring that we are seen to be sensible, proportionate and within the rule of law. Without that, we lose everything.

17:42
Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
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I too welcome the Bill, but it angers and saddens me that it has taken the invasion of a European sovereign nation, and the fact that women and children in Ukraine are being bombed as we speak, to bring it forward.

We have heard the hon. Member for Weston-super-Mare (John Penrose) say that this Bill is about closing “loopholes”. No, it is not. This situation is because of a choice that was made. My right hon. Friend the Member for Barking (Dame Margaret Hodge) said that action should have been taken earlier, and it should have been. The ISC, the Committee I sit on, said in its annual report of 2019-2021 that

“the extent of Russian influence in the UK is very clear—the previous Committee found it to be ‘the new normal’, as successive Governments have welcomed the Russian oligarchy with open arms. As a result, there are a lot of Russians with very close links to Putin who are well integrated into the UK business, political and social scene… Yet…few, if any, questions have been asked regarding the provenance of their considerable wealth and this ‘open door’ approach provided ideal mechanisms by which illicit finance could be recycled through the London ‘laundromat’”.

This situation has not happened by accident; it has happened because we have had a Government who have turned a blind eye to what is going on. It now comes as a great shock to some people that we are going to have to legislate. The Prime Minister says we are going to bring in the toughest sanctions against oligarchs, and the hon. Member for Meriden (Saqib Bhatti) has repeated that we will have the toughest rules in the world. No, we will not, because this Bill will not do that. We will have another economic crime Bill to bring in further legislation, but this issue has been around for years and this Government have turned a blind eye to it. It is no good crying crocodile tears for the people of Ukraine and saying that we are going to react now, when we could have reacted years ago and this Government took a political choice not to.

As the hon. Member for Oxford West and Abingdon (Layla Moran) said, this is also about having the right culture of enforcement, which we do not have. The hon. Member for Amber Valley (Nigel Mills) is correct that it is not just about Russian oligarchs; it is about cleaning up the entire system. For the past 10 years, the right hon. Member for Haltemprice and Howden (Mr Davis) and I have been campaigning on landfill tax fraud—another area that has been completely ignored. This Government have had a light touch on economic crime.

The security implications of the money that is around Putin were well documented in the ISC’s Russia report. All I will say—because I cannot say any more—is that this is further well documented in evidence in the secret annex, which will not be published, quite rightly, for security reasons. The Government say, “We don’t know who to go after; we don’t know what the actual extent is”, but they do.

As my hon. Friend the Member for Hammersmith (Andy Slaughter) said, as part of the will to have enforcement, we must ensure that any of the measures in the Bill are properly financed. It is no good the National Crime Agency taking a knife to a gunfight when going up against some of these individuals. That is exactly how it has been described to me by some of the individuals who work for the National Crime Agency. When I asked the Home Secretary whether she had extra resources for the NCA to implement these measures, she ducked and weaved around the answer. Without that, these measures will not be effective.

If we want a lasting testimony to do something really good and ensure that the people now suffering in Ukraine know that we are doing everything we possibly can—not the glib words of the Prime Minister, which we know are just soundbites that do not stand up to a great deal of scrutiny—then we need to ensure we bring in this Bill and very quickly bring in any other provisions to stop this illicit finance. That not only will have an effect in this area but—I agree with the hon. Member for Amber Valley on this—will clean up this country, and that is long been overdue.

17:47
Peter Gibson Portrait Peter Gibson (Darlington) (Con)
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I welcome the Economic Crime Bill and am pleased that the Government have brought it forward. It will bring in measures to allow us to better prevent and combat the use of land in the UK for money laundering purposes, cracking down on the ability of foreign criminals to hide behind secretive shell companies and revealing the identities of the true owners of land in the UK. That will put us in a position to ensure that our sanctions against Putin’s Kremlin regime will have a real impact.

The Government have already brought in targeted sanctions aimed at crippling Putin’s regime, and this Bill will enable us to go even further. In amending the Sanctions and Anti-Money Laundering Act 2018, the Bill will streamline current legislation, allowing us to respond even more swiftly and effectively to sanction oligarchs and businesses with links to Putin’s regime. Merely making it clear that these measures are being brought in will have an immediate dissuasive effect on those who seek to commit economic crime in the UK.

By creating a register of overseas entities that requires anonymous foreign owners of UK property to reveal their real identities, the Bill will help to address the risk of money laundering through our property market, making it clear to foreign criminals that there is no longer anywhere to hide. I am pleased that the Government have tabled an amendment to ensure that those who do not comply will face real penalties, with fines and imprisonment. However, I urge Ministers to ensure that all these measures apply not just to businesses but to discretionary funds where the beneficiary is not known—a point ably made by my hon. Friend the Member for South Thanet (Craig Mackinlay). We must ensure that there is nowhere to hide.

I note the concerns about the length of the transition period for retrospective registrations for overseas entities. Businesses are not automatically bad just because they are owned by an overseas entity. Some 95,000 properties in the UK are owned through about 30,000 overseas-registered companies, and only a tiny number of these will be owned by corrupt individuals linked to Putin’s regime. I welcome the proposals from my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) to stop avoidance in the coming six months. The Home Secretary has acknowledged my hon. Friend’s work in that area.

The Bill builds on the work we are doing to crack down on illicit finance and economic crime. I am pleased to support it and the measures it contains, but I ask the Minister to address two points in his winding up. First, what plans do the Government have to mandate the registration of ID at Companies House for all company directors? Secondly, the Bill focuses specifically on land registered with Her Majesty’s Land Registry. I would be grateful if the Minister commented on the quantity of as yet unregistered land that will fall within the scope of the Bill.

17:50
Alyn Smith Portrait Alyn Smith (Stirling) (SNP)
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We support the Bill and its aims, for which we have long since been calling, but we are highly frustrated that it has taken a tragedy in Ukraine to bring this legislation forward and shake the Government into action, when the problem of dirty money washing through the UK’s economy has been there for all to see for a long time now. The self-congratulatory tone of the Home Secretary’s statement did not hit the right mark, because a number of people across the House have been pressing for these measures for a long time, and the only thing the UK has really been leading on is being the destination of choice for the world’s dirty money. This is a problem to be fixed, and we will help in the fixing of it, but to my mind the self-congratulatory element of the Home Secretary’s presentation was not appropriate.

The Bill does not deal with a number of areas in which we would like to see more action. I appreciate that there is more to come, but let us move this forward. It does not deal with Companies House reform; although a White Paper is a welcome step forward, it does not go far enough, given that we know what needs to be done. The Bill does not deal properly with Crown dependencies and overseas territories. We believe there is a real risk of displacement—that as the rules change here, there will be movement into trusts in overseas territories—so this needs to be done as a comprehensive package. The Bill also does not deal with corporate liability reform, which is important, and nor does it do much for the UK’s anti-money-laundering regime, so we would like to see further action. Today’s Bill is a start, and we will engage with it positively to make it better, but we want to see an awful lot more. Scotland does not have the power to regulate this issue in Holyrood; this place has reserved those powers, so it is important that this is done properly.

We have engaged positively with the Bill to make it stronger. Our new clause 4 would give Companies House a greater role in anti-money-laundering efforts, which is overdue and necessary. We know what needs to be done, so let us get it done; let us get it started. New clause 4 would at least commence that work. I take the point that there are a lot of things to be done, but that is why we need to do them now, rather than wait. New clause 23 would ensure that beneficial ownership of Scottish limited partnerships was published. Again, that is long overdue—we have seen how land holdings in Scotland have been used to get dirty money out of various jurisdictions. Our amendment 41 would ensure that companies claiming to have no beneficial owner or person of significant control have to explain themselves better—also long overdue.

More generally, like other Members, I would be grateful for an assurance from the Minister that all these measures will be properly funded; if they are not, this Bill will not matter. We already have significant powers, such as unexplained wealth orders, which have not been properly funded or utilised and have not been the deterrent they should have been. If law enforcement bodies are taking a knife to a gunfight, as the right hon. Member for North Durham (Mr Jones) said, we need to make sure that they are properly resourced and tooled up to deal with the people they have to deal with. That said, we support the Bill and will engage with it constructively in Committee.

17:53
John Baron Portrait Mr John Baron (Basildon and Billericay) (Con)
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It is an inconvenient truth that no matter how good the legislation, no matter how robust the rules and laws, they can be made ineffective if they are not properly enforced. To be properly enforced, they have to be properly funded, so although many of us on both sides of the House welcome the Bill and some of us, at least, think it should go further—we have tabled various amendments to that end—I suggest to the Government that, fundamentally, we need to look at the issue of funding. This Bill should be called the economic crime (transparency, enforcement and funding) Bill. I look forward to hearing from Ministers what importance the Government attach to this issue and, more important, what hard money will be put into reinforcing many of the new regulations and rules on transparency that are being introduced.

Various estimates, including those of Spotlight on Corruption, suggest that over the past five years, the number of prosecutions for money laundering has dropped by nearly a third; the National Crime Agency has obtained only five successful prosecutions a year, on average; and the number of individuals convicted by the Serious Fraud Office is on a downward trend. We speak strong words in this place, but what is happening on the frontline is that the people committing economic crime are winning, and winning big time. It is as simple as that. In an intervention, I suggested that the extent of economic crime in this country could be approaching £300 billion, yet we spend less than 0.1% of that figure—£850 million—on all the nationwide law enforcement agencies. That cannot be right.

Look at the comprehensive spending review over the next three-year period. The investment of £42 million in economic crime over that period set out in last autumn’s Budget represents just 0.1% of the £4.2 billion increase allocated to the Home Office. We should remember that the National Crime Agency has received a decrease in its core budget over the past five years, with the outgoing director general calling for a 54% increase in funding for that agency. We must ensure that our law enforcement agencies are properly funded, which is why I will be supporting—among a number of other amendments—new clause 2, which stands in the name of the right hon. Member for Barking (Dame Margaret Hodge). It is also why I tabled my more expansive new clause 24, which addresses the resources required not only to enforce the measures in this Bill, but to police economic crime more generally. In the long term, we could introduce measures that would let our law enforcement agencies take a share of the proceeds of successful prosecutions—why not? Some overseas agencies do. However, in the short term our agencies need to be properly funded in order to bring them up to speed and take these many criminals to task.

Putin thinks that the west is weak, and he thinks this country is weak when it comes to this issue. It is up to this House, on a cross-party basis, to prove him wrong, but to do that we need to fund our enforcement agencies properly. I look forward to hearing from the Minister how the Government are going to set about doing so—if not in this economic crime Bill, then perhaps in the one that I hope will come around the corner very soon.

17:58
Stephen Flynn Portrait Stephen Flynn (Aberdeen South) (SNP)
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I have been listening closely to a lot of the contributions made by Members across the House. It is important to reflect on the fact that this Bill is an important piece of legislation, and one that is clearly long overdue. Will it have an impact on the situation as it stands—the invasion of Ukraine and the mindless slaughter of its people? I sincerely hope it will.

This is also a time for reflection, and for the Government in particular to reflect on how we have found ourselves in this situation. As my hon. Friend the Member for Stirling (Alyn Smith) said, this is not a time for self-congratulation. The issues dealt with in the Bill are not new: they have been spoken about for years upon years, because this Government have wilfully—I repeat: wilfully—presided over this city becoming a laundromat. They have been content to allow that to happen. Despite all the outrage from politicians, civic society and some financiers, not a single finger was lifted. We had the Russia report, the Intelligence and Security Committee report that has been mentioned at length and the promises from Prime Ministers now long gone past, and we had the Panama papers not that long ago—I think it was about four years ago—with 11.5 million documents highlighting corruption and how those with vested interests facilitate it, yet we still had absolutely nothing from this Government. This is not a time for self-congratulation; this is a time for head shaking, reflection and a promise to do better.

Does the Bill do better? Of course it does better than nothing, but will it be the panacea? Will it be the thing that delivers the change we all want to see? Like I said earlier, I sincerely hope that it does, but I am somewhat sceptical. My scepticism sits not just in the fact that this is the very same Government who have overseen much of this laundromat corruption within the City, but in the question of how we make the Bill function, which is raised by some of its details. The hon. Member for Basildon and Billericay (Mr Baron) rightly spoke about this in his remarks. There is nothing in the Bill on funding. Is the enforcement going to be clear? Will it happen swiftly? Will those involved seriously face the wrath of the law in good time and in time enough to have an impact on the situation as it stands at this moment?

There are some positives, such as the situation in relation to sanctions. Subsequent to the initial drafting of the Bill, the Government came forward with additional new clauses that outline how we will be able to sanction in timely collaboration with our partners elsewhere in the world, and we should be grateful for and positive about that step, which is to be encouraged, but that stands alone from a lot of the Bill. I still genuinely believe that individuals—in particular those who are linked to the Kremlin, who have hidden their money and who have stolen their money—will be using the time it has taken for this Government to put these measures in action to hide their money. Much of it will already be gone. That is why time is so crucial in all this. I sincerely urge the Minister to reflect on the fact that not only did his Government think it acceptable for 18 months to pass before people had to acquiesce to what the Government are seeking to do here, but they now think that six months is suitable. I simply ask: will six months help those in Ukraine?

18:02
Matt Hancock Portrait Matt Hancock (West Suffolk) (Con)
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I rise to support the Bill, and I am delighted to hear the full-throated support across the House for it. As the anti-corruption tsar in 2015-16, I had some role in putting together the policies that are finally making it on to the statute book now, in what I regard as the first half of an economic crime Bill. I pay tribute to the current anti-corruption tsar, my hon. Friend the Member for Weston-super-Mare (John Penrose), who has done a magnificent job of making progress since.

While I welcome many parts of the Bill, I focus in particular on sanctions, because the action taken on sanctions against Putin’s cronies by the UK so far is among the strongest in the world. We have designated £258 billion and more than 200 individuals, entities and subsidiaries, and 3 million companies are debarred from raising funds in the City of London. The Government and the Prime Minister deserve credit for their leadership, but I believe that measures can and should go further, whether tonight or in the second half of the legislation. For instance, I am attracted to amendments 26 and 27 and new clause 29, and I would love to hear from the Minister the Government’s attitude to those.

I also put on record the answer to the question of why we have to act legislatively at such pace. It is because the Sanctions and Anti-Money Laundering Act 2018 was riddled with holes by the other place during its passage. If we look back now at the speeches made in the other place then, some of those that looked unwise at the time look extremely unwise now. For instance, there was an explicit argument for more judicial review. On Report, the question was asked:

“Can the Minister explain why sanctions should be imposed on a person simply because they are connected to a specified country”?—[Official Report, House of Lords, 1 November 2017; Vol. 785, c. 1394.]

I think we have an answer to that question now. There was opposition to delegated powers, when Ministers need discretion to act quickly in relation to sanctions. Even the shadow Home Secretary, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), described those who act for oligarchs and then legislate for loopholes as “clever lawyers”. I hope that the other place listens to this debate and hears the strength of feeling. The same thing must not happen this time.

One further point—perhaps it is a point of detail—is that I am surprised to discover that some of those who spoke so powerfully for putting loopholes in place, and who made the case for confusion and delay in law, are also those who stand to benefit from confusion and delay in law, and they do not declare this conflict. Simply declaring earnings from the Bar is not good enough. Parliamentarians should make their interests crystal clear so that there is no confusion around them when they legislate in this area.

Finally, while we legislate rapidly in this case, we must also understand the cause of the challenges faced by Ministers trying to sanction Putin’s cronies. The cause is not the technology and how money is held, but the weakness in the law due to the 2018 Act and the flaws introduced to it during its passage. For instance, the shadow Home Secretary mentioned the challenges around cryptocurrency, but cryptocurrency is not a cause of avoiding sanctions. By contrast, by its nature and the nature of the technology, there is potential for more transparency in some of these new financial assets, so long as the legal framework is correct. Indeed, cryptocurrency exchanges can find out and follow the flow of the money more easily than can be done with traditional forms of finance, because of the nature of the technology, as the FBI has recently demonstrated with some excellent actions to crack down on economic crime in the United States. Let us put the right law in place and give Ministers the discretion they need to act fast. Let us get this legislation through fast, and then let us use it, because with shells raining down on innocent Ukrainians, there is not a moment to lose.

18:07
Jim Shannon Portrait Jim Shannon (Strangford) (DUP)
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I am pleased to be called to speak in this debate. As others have said, and as I recognise, none of us can be untouched by the images on our screens from the TV and media. Indeed, the image just last night of a mother and her two children lying lifeless on a pavement will remain with me and others for a long time to come. Those images stir up an anger within me that is difficult to manage. While this is a time for righteous anger—I am a great believer in that—I welcome this economic crime Bill today to take on Russia’s oligarchs and Putin at the same time. It is important that we do that.

It is clear that this Chamber is not the place for anger and knee-jerk reactions; it is the place for cool heads and measured useful action and for the message to be sent to Putin that the sanctions will be targeted, that this Bill will continue and that there is preparation for further action. Will the Minister give some idea of what is intended to come out of this and what will happen with the next stage, which will be even more necessary to support Ukraine and ensure that Russia is sanctioned?

Putin’s decision to invade Ukraine was based on—I say this with great respect—a USA reeling from covid and infighting. He looked to the same in the EU and perhaps in the United Kingdom. Tonight, we have an opportunity in this place to do our bit, and then the EU and the USA can do their bit and maybe a bit more. Will this legislation freeze the assets and ensure that moneys, bank accounts, houses, vehicles and boats can be seized and used to rebuild Ukraine?

Putin is very much wrong. What he has forgotten is that the British stand together in times of conflict. He has forgotten that the people of this great nation of the United Kingdom of Great Britain and Northern Ireland remember the sacrifices made by their grandparents in the wars and are prepared yet again to sacrifice comfort and more to prevent the spread of oppression. He has forgotten that our DNA rebels against injustice and that we refuse to turn a blind eye. He has forgotten that we pull together when needs be. He must remember that very shortly, before he receives a response that he has not anticipated. That is why the Bill and its measures on sanctions are so important.

The right hon. Member for West Suffolk (Matt Hancock) mentioned cryptocurrencies. I understand that it is difficult to follow them around the world and to know where they come from or where they go. Perhaps the Minister can tell us whether, rather than people trying to get out of it in some way, the trail and history of cryptocurrencies can be followed so that people can be held accountable.

My heart goes out to the Russian citizens who do not support the actions of the despot Putin, who sees young Russian soldiers as mere cannon fodder. As long as his oligarchs have the funds, he does not care that his people starve, which is why we must hit every oligarch with a British link, and hit them hard. That is also why the sanctions are not against the Russian people; they have to hit at the highest levels—at Putin and all those around him.

As the Secretary of State mentioned, it is important to have a two-pronged strategy. Tonight’s debate is about the Bill and about sanctions, but we also have to recognise the great work that has been done and the generosity of spirit across this great nation and across the religious divide in Northern Ireland. Hope for Youth NI has sent 20 40-foot lorries from Northern Ireland in the last week. My councillor colleague Janice MacArthur said that she has been overwhelmed by how far people are willing to go to meet the need.

We also have missionaries in situ in Ukraine, such as Mr and Mrs Sloan, who are feeding the Ukrainians. All those things are so important, and it is important that they can continue to do that. The fact that they have to do that is the reason we have the Bill before us tonight. Faith in Action Missions, based in Newtownards, has a church in Ukraine. Sadly, one of its workers was killed last week.

We in this Chamber recognise the need to have the legislation in place and to make it as hard-hitting as it can be to ensure that we can make changes. The words spoken in this Chamber are important to send a message to Putin, but actions are essential. We say that we stand with them but we need to show that alignment with Ukraine and across the world.

I ask the Government to hit Putin and his cronies where it hurts, make it hard for them and stop their ability to live a normal life. They should freeze their assets, take those assets off them and use the moneys to help to rebuild Ukraine—use Russian moneys to rebuild the land that they are destroying. I ask the Minister whether we can do that. If we cannot, that is the sort of legislation that I want to see. I want to see them hit where it hurts most—in their pocket—and probably somewhere else in their anatomy as well.

18:12
Nickie Aiken Portrait Nickie Aiken (Cities of London and Westminster) (Con)
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I am sadly fully aware that my constituency holds potentially the largest matryoshka doll of Russian-owned investments in the UK. Dirty money is an issue with deep Kremlin-linked roots. As the Member of Parliament representing the Cities of London and Westminster, I support the Government’s objectives to cut the financial and professional arteries to the Kremlin.

Clearly, one of the biggest barriers to tackling money laundering has been the inability to track funds overseas. The Bill undoubtedly raises the bar for transparency globally and may also prove to be a watershed for global economic crime enforcement, given the increase in international collaboration between law enforcement agencies across the world. Broadly speaking, the register of overseas entities is most welcome but, like other hon. Members, I would like it to be implemented in a shorter timeframe. On that note, I welcome the amendments that will see the register updated annually and those that work to fortify our long-term defences against illicit finances.

Of course, I would like the Government to go as far as possible and even consider strengthening our compulsory purchase order laws to allow local authorities to sell long-term empty properties that do not comply with the proposed new register. Indeed, I am sure that council leaders in Surrey and central London would not argue if they were allowed to sell one or two £10 million-plus properties and invest the proceeds in building more affordable homes. Equally, we must ensure that buyers, conveyancing solicitors and estate agents play their part when involved in the sales of prime properties on the register.

Siobhan Baillie Portrait Siobhan Baillie (Stroud) (Con)
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I welcome the Bill and I share the desire to look carefully at the enforcement issues that have dogged previous legislation. As my hon. Friend represents such a multicultural constituency, does she agree that it is important for us to be careful about the anti-Russian message not being against all Russians and about comments about Russians being made to go home, because the law-abiding citizens who live here should be made welcome and continue to be so?

Nickie Aiken Portrait Nickie Aiken
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I completely agree with my hon. Friend. We must remember that many Russians are living in this country because of Putin and because they have escaped his clutches.

To return to the register, I would welcome the Minister’s thoughts on whether it could be made law that, on day one of its coming into effect, nobody could sell a property that may be on it unless it had been registered. I am not talking about six months ahead, but from the day that the law comes into force. That could close the loophole of there being six months.

In a similar vein, strengthening the use of unexplained wealth orders will be a valuable tool in our arsenal. I have spoken to Charles Begley, the chief executive of the London Property Alliance, at length on that issue. Billions are settled in Westminster property alone. Most are under shell companies and very few are ever lived in. I have lost count of the number of times that I have knocked on doors when canvassing in Belgravia, Mayfair, Knightsbridge and other places to be met by housekeepers who tell me that sir or madam does not live there very often.

I am relieved to see that the Bill encompasses property and land, is tied together with reasonable retrospective clauses, and formally recognises complex ownership structures such as properties held in trust. All of that will create a potentially significant compliance burden for relevant entities, with breaches causing serious criminal liability. I hope that the Bill, soon to be an Act, will mean that Londongrad is finished and that the severity of the sanctions is the beginning of a new London.

Right now, oligarchs enjoy the grandest lifestyles that money can buy: they shop in Selfridges and on New Bond Street, they eat in the Michelin restaurants of Mayfair, they easily move money through shell companies, and their children benefit from being privately educated in the UK’s world-renowned public schools. No doubt this Bill, and the one that will follow, are the first step in cleaning up dirty money in our capital once and for all. I commend the Bill.

18:17
Jonathan Reynolds Portrait Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
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We all know that a week can be a long time in politics but, amazingly, it is just 40 days since the resignation of Lord Agnew, who cited, among other things, that he thought the Government would not be willing to bring forward an economic crime Bill this year as his reason for walking out. That statement was of huge concern to many of us. The urgent question that we asked on that matter showed the coalition that exists on both sides of the House which wants real action to be taken on those issues.

Having listened to the Second Reading debate today, I think it is clear that the coalition has assembled again. It should not have taken Ukraine for the Bill to happen, but at least we have the first stage of the legislation. I counted 19 contributions from Back Benchers, all of whom agreed that the legislation should proceed. The Opposition also welcome the Bill and what it contains. There are things that we want to strengthen but we are clear that we will work with the Government to secure its passage today.

As was evident from the beginning of the debate, however, the Bill is not the totality of what is required. Other reforms, such as those to Companies House and to Scottish limited partnerships, must follow. The economic crime Bill promised in the next Queen’s Speech must be presented in the early part of the next Session and must make those reforms. I was in conversation with the Minister for much of last week. I welcome the assurances that have been given and that the Home Secretary gave from the Dispatch Box when she opened the debate.

The Bill covers three main areas: the register of overseas entities, the changes to unexplained wealth orders and the changes to the sanctions regime. I will cover all three. The main part of the Bill deals with the register of overseas entities, on which many hon. Members understandably focused. I very much agree with the hon. Member for Amber Valley (Nigel Mills) that that should be considered a mainstream part of a healthy transparent economy, and that it is not economic warfare to expect that level of transparency—to tell us for the first time who actually owns property in the UK and to make that information publicly available. I have long believed that transparency in this area is essential. Football clubs and luxury yachts get attention because they are visible. What I want to know is who owns the property in plain sight all around us, not just because of oligarchs and their position in the Putin regime, but because of the money launderers and the tax evaders. We have needed transparency in this area for years.

Sammy Wilson Portrait Sammy Wilson (East Antrim) (DUP)
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Does the hon. Member accept that it is one thing to have a register and insist that people fill in the register and fill it in honestly, but it is another thing to ensure that that register is properly checked? Without the resources, skills and acumen to do that, this could become just another piece of legislation that people can bypass.

Jonathan Reynolds Portrait Jonathan Reynolds
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I understand the right hon. Member’s scepticism, and he is of course right to acknowledge, as we have heard many times in this debate, that any measures are only as good as the enforcement mechanisms that exist and the resources behind them. What is significant about a register of property is that, if we do it properly, we can essentially prevent the sale of a property, because we can refuse to register the new ownership unless the measures have been followed. However, his argument about the wider reform required, certainly in relation to Companies House, is absolutely well made, and that is why the second piece of this legislation—the second Bill—is so essential.

David Davis Portrait Mr David Davis
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The issue of the register is obviously important, but I do not think it answers all the questions that the Government assert it does, because we may want to refuse the re-registration of a sale, but on what basis will we do it? If the individual concerned—the oligarch or whatever—is already being sanctioned, we can of course do that, but if they are not being sanctioned and it is taking six months or a year to get to that point, we can do nothing about it.

Jonathan Reynolds Portrait Jonathan Reynolds
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The right hon. Member pre-empts my comments about the timescale for implementation and the worries relating to that, and there have been some very interesting and valid speeches from all sides pointing out such dangers.

However, I want to address the fact—we have not actually heard about it in the debate today, such is the seriousness of the issues—that there is, and we should acknowledge this, an argument against the transparency that all of us are seeking. It is that there are some celebrities or people of high net worth who will cite concerns about privacy in relation to this measure. They would say that they are worried there will be potential risks to them from this register coming into effect.

Kevan Jones Portrait Mr Kevan Jones
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On transparency, and I raised this with the Home Secretary when she was here, there is the issue of Companies House. It was only because of Caroline Wheeler from The Sunday Times that we actually found out who the other shareholder is in Aquind, a company that has donated tens of thousands of pounds to individual Members of this House. That was because, strangely enough, the Luxembourg register is more open than ours. Does my hon. Friend think that, if Members wish to accept donations, this would be helpful to them, because at least they could then discover where the money actually came from originally?

Jonathan Reynolds Portrait Jonathan Reynolds
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My right hon. Friend’s point about donations is absolutely well made. His earlier point was about how some of the things we are seeking to address with this legislation we know about because of whistleblowers and investigative journalists. It is only because of them that we have been able to get some sense of the scale of the problem, and that is what should worry us, because we have to decide, as British Members of Parliament, about the proportionality of the concerns about this. I would ask those people who have such concerns to understand that the lack of transparency in the UK, as things currently operate, does not just open us up to risks of criminal activity, but is now a threat to our national security.

Like many people, I once believed that, as countries developed and became wealthier, that created an irresistible pressure for political reforms—for strong institutions, independent courts and the rule of law—but the fact is that that has not happened in many parts of the world. We are all too familiar with stories of people who have looted the national wealth of their countries, and then stashed those assets safely here in the west. There are examples from Nigeria, Kenya, Indonesia, China, Afghanistan, Russia and many others, and I would like to thank Transparency International for its campaigning and advocacy on these matters. Ukraine itself was once a major victim of this under the corrupt presidency of Viktor Yanukovych. Such corruption often leaves behind countries that are poor and dysfunctional, where the state is starved of the resources and legitimacy it needs to function properly, and where millions are denied the path to prosperity that they deserve. In that space, extremism and terrorism can thrive, so we simply cannot allow this to go on.

Tackling this properly clearly requires international co-operation, but when it comes to registers of beneficial ownership, that co-operation does now exist. That is why there is clear consensus on this happening in relation to property in the UK. This debate has shown that the principal difference of view between ourselves and the Government, which we will obviously discuss in Committee, is what length of time is reasonable to give people to register the beneficial ownership of the near 100,000 properties that will be affected. I think people know that we want 28 days. The Government originally proposed 18 months, and I do acknowledge that they have moved some way in reducing that to six months. I also acknowledge that this is a significant change for some people in relation to their property rights.

However, I would say that this change was announced in 2016 by David Cameron. The pre-legislative scrutiny took place in 2018, and my right hon. Friend the Member for Barking (Dame Margaret Hodge) outlined some of the history of that. So this change has been a long time coming, and people have known it was coming. It is not really the 28-day implementation period we are seeking, but the six years and 28 days that that adds up to. That is why I believe it is reasonable, proportionate and necessary to ask the Government to act at speed.

The second part of the Bill proposes changes to unexplained wealth orders. I raised the problems with these orders when we had the urgent question. I am pleased to see them included as part of this Bill, and I again acknowledge that the Government have already accepted several Labour amendments on this matter. The problems with these orders relate to issues with implementation that have occurred in the courts, so it is clearly good to see those addressed. However, many Members went further in their speeches because there are concerns, because of the way that Russia operated in the 1990s, that it can be hard to use unexplained wealth orders to take the action required now. Several Members have proposed a new set of powers that could freeze relevant assets while cases are made, and again we can deal with those amendments in Committee, but I am sympathetic to the arguments put forward.

The third part of the Bill relates to sanctions and their application. People are asking us as Members of Parliament why those who have been subject to sanction by the US and the EU are not currently sanctioned by the UK. The debate today recognises that the regime laid out in the Sanctions and Anti-Money Laundering Act 2018 is not sufficient. There is clearly a widespread desire to see this improved, and proposals in this area are welcome. However, I would also say, separate to this, that there are the issues of resources and enforcement. My right hon. Friend the Member for North Durham (Mr Jones) and the hon. Member for Basildon and Billericay (Mr Baron) made that point in detail. My understanding is that, as a country, we are under-powered in the resources and capacity we devote to this. Just last month, the former Leader of the House—now the Minister for Brexit Opportunities and Government Efficiency —said he wanted to cut 65,000 civil servants over the next three years. However, this is a clear example of an area where we need more capacity, as well as the right legal regime, to do what is required. The seriousness of these matters means that the Government must devote the resources required to do that.

John Baron Portrait Mr Baron
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Very briefly, we are going to see a second economic crime Bill come through, and I think it would do the House a great service if the Labour party actually put forward concrete proposals when it comes to funding that would perhaps gather more support across the House than the hon. Member imagines. At the moment, the Opposition are just talking in very vague terms, but everybody seems agreed, so we need to see some concrete action.

Jonathan Reynolds Portrait Jonathan Reynolds
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I am always happy to be of service to the hon. Gentleman, and we will be looking to do that. He will of course know that a comprehensive spending review is imminent.

David Davis Portrait Mr David Davis
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Will the hon. Gentleman give way?

Jonathan Reynolds Portrait Jonathan Reynolds
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I feel I must proceed so we can go into Committee, given how important this is.

To conclude, the measures in this Bill are necessary. They are overdue, but I am pleased that they will make progress today. There is much more to do, but I hope that this legislation will mark a turning point in the UK no longer being known as a destination of choice for hiding ill-gotten gains. The measures will have an effect, and it is possible some people will argue that they will limit foreign investment in the UK. I would say that any money stopped by this Bill is money we should never have been open to in the first place. As the journalist Edward Lucas wrote a decade ago in his book “The New Cold War”:

“If you believe…money matters more than freedom, you are doomed when people who don’t believe in freedom attack using money.”

Too many parts of this country have been compromised by their proximity to the extreme wealth and influence the oligarchs can wield. The perception that the UK has been willing to turn a blind eye to this has been of considerable detriment to our reputation and legitimacy. If this Bill marks the moment when that starts to change, it will be very welcome indeed.

18:29
Paul Scully Portrait The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
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It is a pleasure to follow the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) and I thank him for his engagement over the last week, because it is important that, despite any differences in terms of finessing this Bill, we are all in agreement, as I think we are, and it is very important that this Parliament and this House are united in our drive to right the wrongs done to the people of Ukraine and to drive Russian money out of London and indeed to punish the oligarchs. I shall cover as many of the points raised by hon. Members as I can in the time available, but first I want to remind the House about what the Bill signifies and what we are hoping to achieve and believe it will achieve.

The Bill will improve transparency about the ownership of companies and property in the UK and strengthen the enforcement of financial sanctions. It will create a register of overseas entities to crack down on foreign criminals using UK property to launder money. The new register will require anonymous foreign owners to reveal their real identity to ensure criminals cannot hold property behind secretive chains of shell companies. By legislating now, we will send a clear warning to those who have used, or are thinking of using, the UK property market to launder ill-gotten gains, particularly those linked to the Russian Government.

John Baron Portrait Mr Baron
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The Minister is absolutely right and this Bill is of course welcome, although many of us believe it should go further. However, putting that to one side for the moment, do he and his Front-Bench colleagues accept that all these well-intended regulations and rules will come to nothing if not enforced properly? When will the Government bring forward concrete figures on the proper increase in funding required to make sure that these rules and regulations, and others, have full effect?

Paul Scully Portrait Paul Scully
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I will come to those figures because I totally agree with my hon. Friend that the rules and new laws must be enforced. We can talk as much as we like, but this is about action, and we are leading the way on action.

This Bill will also reform unexplained wealth orders by removing the key barriers to their use by law enforcement and include amendments to financial sanctions legislation, helping to deter and prevent breaches of sanctions.

Questions have been raised today about why it has taken this long to come up with the legislation. We had prelegislative scrutiny on the register of ownership a couple of years ago, which obviously was interrupted by the pressures of covid on parliamentary time. None the less, that means we have been able to adapt the paragraphs that have already been drafted, undergone prelegislative scrutiny and had a clean bill of health from Committees in this place to the new norm following the Russian invasion of Ukraine.

Angela Eagle Portrait Dame Angela Eagle
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We on the Treasury Committee have just published a report on economic crime and some of the evidence we took highlighted a great deal of frustration among those working in this area and trying to make the system work, in particular at the Minister’s Department’s lack of progress with reform of Companies House. That is in the Minister’s own specific bivouac; why has more not been done faster?

Paul Scully Portrait Paul Scully
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I am thinking of the word bailiwick rather than bivouac, but I hope the hon. Lady will agree that our being able to reflect on that legislation and align it with the broader reforms of Companies House that we have subsequently announced has enabled the broader legislation to work together and be more effective. That has been absolutely essential in ensuring that the new requirements are workable and proportionate and the register strikes the right balance between improving transparency and minimising burdens on legitimate commercial activity.

Peter Dowd Portrait Peter Dowd
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On Second Reading of the Sanctions and Anti-Money Laundering Act 2018, the Prime Minister, who was then Foreign Secretary, said:

“The aim of the Bill is to grant Her Majesty’s Government full power over British sanctions policy after we leave the EU and, in a memorable phrase, to take back control.”—[Official Report, 20 February 2018; Vol. 636, c. 77.]

Does the Minister think we have used the full power in the fullest way to take sanctions against those we think are a threat to us in economic terms?

Paul Scully Portrait Paul Scully
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I thank the hon. Gentleman for raising that because the now shadow Chancellor boasted afterwards how she managed to weaken the Government’s approach during the passage of that Bill. I believe we have gone as far as we can, but we need more measures, which is what today is all about. This is the first half of those measures to make sure we can introduce the remaining economic crime Bill, which includes Companies House reform.

We have tabled an amendment to reduce the transition period from 18 months to six months, but I will outline a little further how we can make this work effectively to ensure that people cannot just move money out of this country.

Matt Hancock Portrait Matt Hancock
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Will the Minister welcome the conversion of the Labour party to supporting strengthening the sanctions regime, because a strong Bill was introduced in this House by the then Foreign Secretary, but it was watered down in the House of Lords with the support of the Labour party? I do not like to make party political points out of this because we should be united on it, but that is a matter of fact.

Paul Scully Portrait Paul Scully
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I agree that it is, but let us come back to a sense of unity. We have had some ding-dongs throughout, but it is time now to make sure we can come together and send the most powerful message as a House and Chamber to the oligarchs that their behaviour will not be tolerated for a moment longer.

It is also important to remember that the majority of property held by overseas entities will be owned by entirely law-abiding businesses and people. We are talking about 95,000 properties in England and Wales owned by 30,000 or so overseas entities. Only a tiny fraction of them are likely to be held by criminal or corrupt interests. The transition period is an important protection of the rights of those legitimate owners of property. The Government do not interfere with individuals’ rights lightly and the interference could not reasonably have been expected when rights over the properties within scope of the register were acquired, so we must ensure that we respect those rights in a way that cannot be challenged. No doubt those who wish to avoid these requirements and who are able to afford expensive legal teams will take any advantage of opportunities to do so.

Kevin Hollinrake Portrait Kevin Hollinrake
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The transition period—the debate on the timescale of 18 months, six months or 28 days—is key. Does the Minister agree that the most effective way of dealing with this and preventing the asset flight we are all concerned about is through something along the lines of manuscript amendment 64, which would require people who want to sell or transfer their asset to disclose the beneficial owner prior to doing so to Companies House and therefore Her Majesty’s Land Registry could block it? Will he accept that that is the right way forward?

Paul Scully Portrait Paul Scully
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He will, and I thank my hon. Friend for his work and for raising that. I will come back to his point shortly.

There will also be law-abiding British companies that have adopted such structures and that type of ownership for legitimate commercial reasons, including real estate investment trusts, which are public companies, whose core business is to manage and own properties that generate income, and in particular pension schemes holding land and properties. Others will be British nationals who have adopted the arrangements for legitimate reasons of privacy—as we have heard, perhaps celebrities who do not want their address to be known publicly. They may wish to apply to Companies House for their personal details to be protected from public view on the new register, but the threshold for exemption from the public register will be high, so it is right for individuals to have time to seek advice on their options and how to make a case to the registrar.

None Portrait Several hon. Members rose—
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Paul Scully Portrait Paul Scully
- View Speech - Hansard - - - Excerpts

Before giving way further, I want to acknowledge that I am very aware of the strength of feeling that corrupt people must not be allowed to set up ways to escape the transparency this register will bring. I can therefore see merit in requiring all who are selling property to submit a declaration of their details at the point of the transfer of land title during that transition period. That would mean we would give anyone selling a zero-day transition period; that goes further than the 28 days, but it is an acknowledgement of the work done across this Chamber, in particular with the help of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). They would have to register ownership if selling, and in that way we would either get their ownership details, or if they did not sell, we would get it at the end of the transition period in a way that still protects legitimate owners. We will give this further consideration ahead of finalising the Bill in the Lords next week, because it is not right for British businesses to bear the brunt of Her Majesty’s Government’s pursuit of the Russian cronies.

Margaret Hodge Portrait Dame Margaret Hodge
- Hansard - - - Excerpts

I am interested in where the Minister has got his information from, because I have not seen that data. I understand about the Hollywood stars and those people who do not want their ownership of property to be revealed, but my understanding from both Transparency International and Global Witness is that most properties are bought through shell companies—often located in the British Virgin Islands—probably as a mechanism for laundering money. I wonder where he gets his data. Some of the British companies that choose that structure do so to avoid stamp duty, and the House does not want to endorse that, either, does it?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

No, indeed. If the right hon. Lady looks at the Panama papers, I think she will see that they cite Emma Watson as having bought a house under a shell company owing to security risks, and the Pandora papers cite a former Prime Minister of this country buying a house in Harcourt Street and ultimately saving £300,000 in stamp duty. We clearly should not support that. So we have to get the balance right. There will be legitimate reasons, and there will be people avoiding tax, which we want to stamp out, but, in repurposing these measures, we want first to ensure that we are stamping out oligarchs’ money.

Layla Moran Portrait Layla Moran
- Hansard - - - Excerpts

The Minister will be aware of amendment 4—we will discuss it in Committee—which asks why there is an exemption on the so-called economic wellbeing of the UK. He will be well aware that many of these oligarchs own big companies that employ thousands of people, so the exemption could be used as a loophole. Will he accept the amendment? If not, will he explain why the loophole is there in the first place? We are very confused.

Paul Scully Portrait Paul Scully
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I will happily talk about that amendment in Committee. However, I take the hon. Member’s point and the spirit in which she makes it. Perhaps we can debate that later, because I totally get what she is saying.

In respect of Russia specifically, we have swiftly implemented the strongest set of economic sanctions ever imposed against a G20 country, including the recent sanctioning of Kremlin associates Alisher Usmanov and Igor Shuvalov. That is worth a combined $19 billion with immediate effect. The Government’s new amendments will also streamline current legislation so that we can respond even more quickly.

We had discussion about funding and resource. The Government have developed a sustainable funding model, including about £400 million over the spending review period. We have announced new investment of £18 million in the next financial year and £12 million in the years after that for economic crime reforms, in addition to £63 million over the spending review period for the Companies House reforms. Since 2006-07, just under £1.2 billion of the assets recovered under the Proceeds of Crime Act 2002 have been returned to law enforcement agencies.

Paul Scully Portrait Paul Scully
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I will give way one last time.

Gavin Robinson Portrait Gavin Robinson
- Hansard - - - Excerpts

I am grateful to the Minister. He will know—I raised this with him earlier—that there was confusion in Northern Ireland about whether, without a legislative consent motion, some of the Bill would not apply to Northern Ireland, creating another loophole that would allow oligarchs to retain assets in the United Kingdom through the back door. Will he confirm that, through the transition period, and knowing that the majority of the Bill does extend to Northern Ireland, he will ensure that there are no loopholes or back doors?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Yes, the Bill does contain provisions relating to the register of overseas entities and unexplained wealth orders that engage devolution powers in both Scotland and Northern Ireland. The Government are engaging closely with colleagues across all three devolved Administrations, who are all supportive of the Bill’s measures, and we continue to work closely with Scotland and Northern Ireland to complete those respective legislative processes at the earliest opportunity.

We clearly want to ensure that we have that Companies House reform, which will be the biggest since its inception 200 years ago. It is a complex area of law, and we will return to it at the earliest possible time. I thank right hon. and hon. Members for their contributions to this excellent and informative debate. I look forward to discussing the Bill in Committee.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Further proceedings on the Bill stood postponed (Order, this day).

Economic Crime (Transparency and Enforcement) Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a),

That, for the purposes of any Act resulting from the Economic Crime (Transparency and Enforcement) Bill, it is expedient to authorise:

(1) the payment out of money provided by Parliament of any expenditure incurred under or by virtue of the Act by a Minister of the Crown or a government department; and

(2) the payment of sums into the Consolidated Fund.—(Amanda Solloway.)

Question agreed to.

Economic Crime (Transparency and Enforcement) Bill

Proceedings resumed (Order, this day).
Considered in Committee (Order, this day)
[Dame Rosie Winterton in the Chair]
Rosie Winterton Portrait The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
- Hansard - - - Excerpts

The selection paper includes three manuscript amendments that the Chairman of Ways and Means has selected: amendment 63, in the name of David Linden; new clause 41, in the name of the Secretary of State; and amendment 64, in the name of Kevin Hollinrake. A separate paper containing those amendments is available from the Vote Office.

Clause 1

Overview

Question proposed, That the clause stand part of the Bill.

Rosie Winterton Portrait The First Deputy Chairman
- Hansard - - - Excerpts

With this it will be convenient to discuss the following:

Clauses 2 and 3 stand part.

Amendment 24, in clause 4, page 2, line 18, at end insert—

“(aa) a statement either—

(i) of the names of any persons who are registered beneficial owners of the entity and are designated persons listed on the UK Sanctions List, or

(ii) that no registered beneficial owners of the entity are so listed;”

This amendment would require the identity of any sanctioned registered beneficial owners of the entity, or a statement that there are no such persons, to be included in an application for registration.

Clauses 4 to 6 stand part.

Amendment 5, in clause 7, page 4, line 11, after “update period” insert “or trigger event”.

This amendment would extend the duty to update the registrar to certain trigger events.

Amendment 25, page 4, line 11, at end insert—

“(aa) an updated statement in accordance with section 4(1)(aa)”.

This amendment requires statements made under amendment 24 to be updated annually.

Amendment 6,  page 5, line 18, at end insert—

“(8A) For the purposes of this section, trigger event means the date on which an overseas entity has reasonable cause to believe that anyone has become or ceased to become a registrable beneficial owner.”

This amendment defines a trigger event.

Clause 7 stand part.

Amendment 42, in clause 8, page 5, leave out lines 30 to 35 and insert—

“(a) on the first day of contravention, a fine,

(b) on the second continued day of contravention, an additional fine of £500, and

(c) on each subsequent day of continued contravention, an additional daily default fine of the value of the previous day’s fine plus £50.

(2A) If the contravention continues for a period of six months beginning with the first day of contravention, the Court must order the seizure of assets from the person guilty of the offence of the value of the cumulative fines to which that person is liable.”

The purpose of this amendment is to provide progressively higher fines for a registered overseas entity, and every officer of the entity, for an initial default in complying with its duty to update the register, leading to a seizure of assets if non-compliance continues for 6 months.

Government amendment 45.

Amendment 7, page 5, line 31, leave out “£500 and one-tenth of level 4 on the standard scale” and insert

“£2,500 and half of level 4 on the standard scale.”

This amendment would increase the daily default fine for an offence committed under section 8 in England or Wales.

Government amendment 46.

Amendment 8,  page 5, line 35, leave out “one-tenth” and insert “half”.

This amendment would increase the daily default fine for an offence committed under section 8 in Scotland or Northern Ireland.

Amendment 43,  page 6, leave out lines 1 to 6 and insert—

“(a) on the first day of continued contravention, a fine of £500, and

(b) on each subsequent day of continued contravention, an additional daily default fine of the value of the previous day’s fine plus £50.

(6) If the contravention continues for a period of six months beginning with the first day of contravention, the Court must order the seizure of assets from the person guilty of the offence of the value of the cumulative fines to which that person is liable.”

The purpose of this amendment is to provide progressively higher fines for every officer of the entity for a continuing contravention of its duty to update the register, leading to a seizure of assets if non-compliance continues for 6 months.

Government amendments 47 and 48.

Clause 8 stand part.

Amendment 9, in clause 9, page 7, line 14, leave out subsection (8).

This amendment would extend the definition of an overseas entity registered as the proprietor of a relevant interest in land for the purposes of sections 9 and 10 to include such entities irrespective of date of registration of the entity.

Clauses 9 to 11 stand part.

Amendment 41, in clause 12, page 8, line 32, at end insert—

“(3A) If an entity declares that there is no person whom it knows, or has reason to believe, is a registrable beneficial owner in relation to that entity, the registrar of companies in England and Wales must give an information notice under this section to that entity requiring full details of how the entity is controlled.”

This amendment requires an explanation to be given where an entity claims there is no registrable beneficial owner. Making a false statement in purported compliance, or failing to comply, with a notice under this section is an offence under section 15.

Clause 12 stand part.

Clauses 13 to 15 stand part.

Amendment 10, in clause 16, page 10, line 29, at end insert—

“and (d) prior to the registrar taking action under section 5(1).”

This amendment establishes that such verification processes made under regulations should take place prior to the registrar recording the date of registration in the register, allocating an overseas entity ID to the entity and record the overseas entity ID in the register.

Amendment 11, page 10, line 30, leave out “may” and insert “must”.

This amendment requires the Secretary of State to include the specified information in regulations.

Government amendment 49.

Amendment 12, page 10, line 35, at end insert—

“(4) The Secretary of State must make regulations under this section no later than 28 days following the commencement of Part 1 of this Act”.

This amendment would require the Secretary of State to make regulations under this section within 28 days of the commencement date.

Clauses 16 and 17 stand part.

Amendment 4, in clause 18, page 11, line 16, leave out subsection (1)(b).

This amendment removes the ability of the Secretary of State to exempt an individual from the requirements to register their overseas entities on the grounds of the economic wellbeing of the United Kingdom.

Clauses 18 to 20 stand part.

Amendment 37, in clause 21, page 13, line 1, leave out from beginning to end of line 2 and insert—

“(3) No cause of action in civil proceedings shall lie against a person in respect of the making of a protected disclosure as defined in section 1 of the Public Interest Disclosure Act 1998 in relation to information from the register.

(3A) In a prosecution of a person for any offence prohibiting or restricting the disclosure of information it is a defence for that person to show that, at the time of the alleged offence, the disclosure was, or was reasonably believed by the person to be, a protected disclosure.”

Clause 21 stand part.

Clauses 22 to 25 stand part.

Amendment 44, in clause 26, page 16, leave out lines 10 to 15 and insert—

“(a) on the first day of contravention, a fine,

(b) on the second continued day of contravention, an additional fine of £500, and

(c) on each subsequent day of continued contravention, an additional daily default fine of the value of the previous day’s fine plus £50.

(2A) If the contravention continues for a period of six months beginning with the first day of contravention, the Court must order the seizure of assets from the person guilty of the offence of the value of the cumulative fines to which that person is liable.”

The purpose of this amendment is to provide progressively higher fines for a registered overseas entity, and every officer of the entity, for providing inconsistent information for the register, leading to a seizure of assets if non-compliance continues for 6 months.

Government amendments 50 and 51.

Clause 26 stand part.

Clauses 27 to 30 stand part.

Amendment 26, in clause 31, page 18, line 13, leave out “knowingly or recklessly”.

This amendment removes the requirement that a false statement to the registrar needs to be proven to have been given knowingly or recklessly for that statement to constitute an offence.

Amendment 27, page 18, line 18, at end insert—

“(1A) If the registrar has reason to believe that a person may have committed an offence under section 31 the registrar may require—

(a) any person connected with the entity, including in any professional or advisory capacity,

(b) any public body, or

(c) any other person

to provide information in connection with that potential offence.

(1B) A requirement under subsection (1A) applies notwithstanding the data protection legislation (within the meaning in section 25).

(1C) A person who fails to comply with a requirement under subsection (1A) commits an offence.”

This amendment gives the registrar powers to demand information in connection with suspected false statement offences.

Clause 31 stand part.

Clauses 32 and 33 stand part.

Amendment 34, in clause 34, page 20, line 20, at end insert—

“, provided that the person can show that he or she was not acting knowingly, recklessly or carefully.”

This amendment would require those giving advice in a professional capacity to show that they were not acting knowingly, recklessly or carelessly if they are not to be caught by the provisions of subsection (2).

Clause 34 stand part.

Clauses 35 to 37 stand part.

Amendment 29, in clause 38, page 21, line 4, leave out from “if” to “the” in line 5 and insert

“it is reasonable to assume that, on the balance of probabilities,”.

This amendment reflects the civil law standard of proof.

Amendment 30, page 21, line 6, at end insert—

“, or conduct which would have been an offence if the word ‘recklessly’ in clause 15(2)(b) were replaced with ‘carelessly’”.

This amendment expands the test to behaviour which may reflect a lack of due diligence as well as deliberate intent.

Amendment 31, page 21, line 6, at end insert—

“(1A) Where the failure relates to the ownership of a qualifying estate (as defined in Schedule 4A to the Land Registration Act 2002), any penalty imposed by the registrar shall be calculated by reference to the market value of that qualifying estate.”

This amendment makes provision for the calculation of penalties by reference to the market value of the qualifying estate.

Amendment 32, page 21, line 9, at end insert—

“(ba) for penalties to be reduced in cases where a person was acting carelessly, and not recklessly or knowingly;”.

Manuscript amendment 63, page 21, line 12, insert—

“(f) disqualifying the person from the electoral roll.”

Amendment 33, page 21, line 20, leave out subsection (4) and insert—

“(4) The regulations must provide that—

(a) if a person is convicted of an offence and is liable to a fine, and is subsequently the subject of a financial penalty under this clause relating to that same conduct, the penalty shall be reduced by the amount of the fine (but not below zero), and

(b) if a person is subject to a financial penalty under this clause, and is subsequently convicted of an offence relating to that same conduct, any fine for which they are found liable shall be reduced by the amount of the financial penalty (but not below zero).”

Clause 38 stand part.

Clauses 39 to 49 stand part.

Amendment 38, in clause 50, page 32, line 9, at end add—

‘(2) The Secretary of State shall establish an inquiry into the use of legal intimidation and strategic lawsuits against public participation (SLAPPs) to prevent such actions from being used to prevent economic crime from being uncovered.”

Clause 50 stand part.

Government amendment 59.

Clauses 51 to 52 stand part.

Government amendments 52 to 54.

Clause 53 stand part.

Amendment 1, in clause 54, page 33, line 7, after “force”, leave out “on such day as” and insert

“at the end of six months from the day on which this Act is passed or on any earlier day that”.

The intention of this amendment is for the Parts 1 and 2 of the Act to come into force no later than 6 months from being passed.

Government amendments 60 to 62.

Amendment 36, page 33, line 20, at end insert—

“(8) The provisions of this Act shall have retrospective effect from the date that the Bill received first reading in the House of Commons.”

This amendment seeks to move forward the provisions of this Bill, backdating them to the day upon which it received first reading.

Clause 54 stand part.

Amendment 2, in clause 55, page 33, line 22, leave out “Economic Crime (Transparency and Enforcement)” and insert “Registration of Overseas Entities, etc”.

The intention of this amendment is for the short title to reflect more accurately the contents of the bill.

Clause 55 stand part.

Government new clauses 31 to 40.

Government manuscript new clause 41.

New clause 2—Report on funding of enforcement agencies

‘Within 28 days of this Act being passed, the Secretary of State must publish and lay before Parliament a report on the funding of enforcement agencies in connection with the provisions of Part 2 of this Act.’

This new clause would require the Secretary of State to publish and lay before Parliament a report on the funding of enforcement agencies in connection with the reforms to unexplained wealth orders, as provided for in Part 2 of the Bill.

New clause 3—Requirement on entity to register if it owns certain assets

‘(1) An overseas entity must apply for registration in the register of overseas entities if the entity is registered as the owner of—

(a) a professional football club,

(b) a jet, or

(c) a yacht.

(2) In this section—

“professional football club” means any association football club playing in the English Premier League, the English Football League or the Scottish Professional Football League.

“jet” means any jet aircraft with a value over £500,000.

“yacht” means any medium sized sailing boat with a value over £500,000.’

This new clause would require an overseas entity that owns a football club, jet or yacht to apply for registration in the register of overseas entities.

New clause 4—Registrar of companies for England and Wales: additional duties

‘(1) The Secretary of State must amend the Money Laundering, Terrorist Financing and Transfer of Funds Regulations (2017/692) to specify that the registrar of companies for England and Wales is a supervisory body in relation to overseas entities as defined in section 2 of this Act.

(2) The Secretary of State must direct the registrar of companies for England and Wales to participate in a government identity assurance scheme.’

The purpose of this new clause is for Companies House to be made an anti-money laundering supervisor and to register as part of the UK Government’s Verify scheme.

New clause 5—Duty to report on representations received by the Government relating to economic crimes

‘(1) Within 1 month of this Act being passed, the Secretary of State must lay before Parliament a disclosure report detailing all representations received by the Government in the last twelve months regarding the register of overseas entities, as provided for by Part 1 of this Act.

(2) The disclosure report under subsection (1) must include—

(a) the minutes from or any notes of meetings in which such representations were made; and

(b) all correspondence, including submissions and electronic communications, addressed or copied to any Minister or former Minister of the Crown.

(3) Information provided under subsection (2)(b) must include—

(a) the names of entities making representations;

(b) the dates on which representations were made; and

(c) a summary of what the representation was.’

This new clause requires the Government to lay before Parliament a report containing details of all representations made by entities including businesses, regarding the register of overseas entities, provided for by Part 1 of the Bill. The report must be laid within 1 month of the Bill attaining Royal Assent.

New clause 6—Transitional Period for Certain Qualifying Estates

‘(1) A transitional period of 18 months shall apply to—

(a) an entity that—

(i) is registered in the register of title kept under the Land Registration Act 2002 as the proprietor of a qualifying estate within the meaning of Schedule 4A to that Act, and

(ii) became so registered in pursuance of an application made on or after 1 January 1999,

(b) an entity that—

(i) in relation to a plot of land that is registered in the Land Register of Scotland, is (or is to be) entered as proprietor in the proprietorship section of the title sheet for the plot of land by virtue of an application for registration made on or after 8 December 2014,

(ii) in relation to a lease that was recorded in the General Register of Sasines or registered in the Land Register of Scotland before that date is, by virtue of an assignation of the lease registered in the Land Register of Scotland on or after that date, the tenant under the lease, or

(iii) in relation to a lease that was registered in the Land Register of Scotland on or after that date, is the tenant under the lease, or

(c) an entity that—

(i) is registered in the register kept under the Land Registration Act (Northern Ireland) 1970 (c. 18 (N.I.)) as the owner of a qualifying estate within the meaning of Schedule 8A to that Act, and

(ii) became so registered on or after the day on which that Schedule came into force.

(2) Overseas entities registered as the proprietor of relevant interests in land falling within the scope of subsection (1) must comply fully with all obligations under the Act at the end of the period of 18 months beginning with the commencement date.’

This new clause creates a transition period for certain overseas entities registered as the proprietor of relevant interests in land in order to provide the Government with a time frame to resolve issues with the Land Registry that currently make registration impracticable.

New clause 7—38A Further reforms to Companies House

‘(1) Not later than 28 days from when Part 1 of this Act comes into force, the Secretary of State must publish draft legislation for the purpose of making further reforms to Companies House, including to support the effective functioning of the register of overseas entities.

(2) The draft legislation must include—

(a) new powers for the registrar to aid the verification of foreign entities applying for registration as set out in section 4 of this Act;

(b) new powers for the registrar to better share data with enforcement agencies; and

(c) reforms that will improve the quality and veracity of the information on the register.’

This new clause would compel the Secretary of State to publish draft legislation on reforms to Companies House, including reforms that would support the operation of the Act.

New clause 8—47A Annual reports on unexplained wealth orders

‘(1) The Secretary of State must prepare annual reports on unexplained wealth orders made by the High Court on application by an enforcement authority under the Proceeds of Crime Act 2002.

(2) An annual report must —

(a) specify the number of unexplained wealth orders made during the relevant period; and

(b) specify the number of applications by each enforcement authorities during the relevant period.

(3) An annual report must be published and laid before Parliament before the end of the 4 month period beginning immediately after the last day of the period to which the report relates.’

This new clause requires the Secretary of State to make an annual report on the use of unexplained wealth orders.

New clause 9—Review of Act 2022 and adequacy of resources

‘(1) The Secretary of State must publish a review of the operation of this Act by 31 December 2022.

(2) The registrar of companies in England and Wales must publish a report on the operation of this Act by 31 December 2022.

(3) The report by the Secretary of State under subsection (1) must include an assessment of the adequacy of resources allocated for the operations of the registrar of companies in England and Wales, as augmented under this Act.

(4) The report by the Secretary of State under registrar of companies in England and Wales must include an assessment of what the effect on performance of the over the following 12-month period if the real-terms resources after inflation allocated by the Secretary State were increased by—

(a) 10%,

(b) 25% and

(c) 50%.

(5) The Secretary of State must publish a further review of the operation of this Act by 31 December 2023, and at least once in each subsequent calendar year.

(6) The registrar of companies in England and Wales must publish a further report of the operation of this Act by 31 December 2023, and at least once in each subsequent calendar year.’

This new clause would require annual reports from the Government and Companies House on the effectiveness of this Act, and the adequacy of resources allocated to Companies House.

New clause 10—Review of sanctions regulations: requirement for a debate in House of Commons

‘In section 30 of the Sanctions and Anti-Money Laundering Act 2018 (Review by appropriate minister of regulations under section 1), after subsection (5), insert—

“(5A) An appropriate Minister of the Crown must, not later than ten sitting days after a report under this section has been laid before Parliament, make a motion in the House of Commons providing for a debate in relation to the report.”’

This new clause would require the Government to schedule a debate on reports laid before the House in relation to the continued appropriateness of regulations made under section 1 of the Anti-Money Laundering Act 2018.

New clause 13—Power to require overseas entity to register if it owns property within a freeport

‘(1) The Secretary of State may by notice require an overseas entity to apply for registration in the register of overseas entities within the period of 6 months beginning with the date of the notice if at the time the notice is given—

(a) the entity is registered as the proprietor of a relevant interest in property within a UK freeport, and

(b) the entity is not registered as an overseas entity, has not made an application for registration that is pending and is not an exempt overseas entity.

(2) A notice under subsection (1) lapses if, before the end of the period mentioned there, the overseas entity—

(a) ceases to be registered as the proprietor of a relevant interest in property within a freeport, or

(b) becomes an exempt overseas entity.

(3) If an overseas entity fails to comply with a notice under subsection (1), an offence is committed by—

(a) the entity, and

(b) every officer of the entity who is in default.

(4) A person guilty of an offence under subsection (3) is liable—

(a) on summary conviction in England and Wales, to imprisonment for the maximum summary term for either-way offences or a fine (or both);

(b) on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both);

(c) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum (or both);

(d) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both).

(5) In subsection (4)(a) “the maximum summary term for either-way offences” means—

(a) in relation to an offence committed before the time when paragraph 24(2) of Schedule 22 to the Sentencing Act 2020 comes into force, 6 months;

(b) in relation to an offence committed after that time, 12 months.

(6) In this section “exempt overseas entity” means an overseas entity of such description as may be specified in regulations made by the Secretary of State for the purposes of this section.

(7) Regulations under subsection (6) are subject to the affirmative resolution procedure.’

This new clause requires an overseas entity to apply for registration in the register of overseas entities if they have a property within a freeport.

New clause 14—Commission for the Protection of Whistleblowers

‘The Secretary of State shall establish a Commission for the Protection of Whistleblowers for the purpose of enhancing the transparency and enforcement of economic crime covered by this Act.’

New clause 18—Publication of information during transitional period

‘(1) The Secretary of State must record the activities of overseas entities that fall within the scope of this Bill which take place during the transitional period, provided for by part 2 of schedule 3 and part 2 of schedule 4.

(2) The Secretary of State must publish on a weekly basis the information gathered under paragraph (1).

(3) “Information” under subsection (2) means details on overseas entities as provided for by Part 1 of this Act.’

This new clause would require the Secretary of State to record and publish the details of companies benefitting from the 18-month transitional period, to facilitate scrutiny as to whether they may be linked with the Russian regime.

New clause 19—Power to require registration of donations to registered political party, etc.

‘(1) The Secretary of State must by notice require a company or Limited Liability Partnership (LLP) to apply for registration in the register of overseas entities within the period of 6 months beginning with the date of the notice if at the time the notice is given—

(a) the company or LLP has made a donation to—the entity is not registered as an overseas entity, has not made an application for registration that is pending and is not an exempt overseas entity.

(i) a registered political party,

(ii) a candidate at an election,

(iii) a third party (non-party campaigner under Schedule 11 of the Political Parties, Elections and Referendums Act 2000 (PPERA)),

(iv) a permitted participant at a referendum under Schedule 15 of PPERA, or

(v) any other regulated entity under Schedule 7 of PPERA, including holders of elective office, members of political parties, and members’ associations,

and the entity has not made in written form to the recipient the declaration specified in subsection (2) of this section; and

(b) the entity is not registered as an overseas entity, has not made an application for registration that is pending and is not an exempt overseas entity.

(2) The declaration required by (1)(a) is that the company or LLP’s profits generated and taxable within the UK over the previous 12 months are greater than the value of the donation given.

(3) A declaration under this section must also state the company or LLP’s full name, address and registration number.

(4) A person who knowingly or recklessly makes a false declaration under this section commits an offence attracting the following penalties—

(a) on summary conviction in England and Wales or Scotland: to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both);

(b) on summary conviction in Northern Ireland: to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum (or both);

(c) on conviction on indictment: to imprisonment for a term not exceeding 12 months or a fine (or both).

(5) The Secretary of State may by regulations make provision requiring a declaration under this section to be retained for a specified period.

(6) The requirement in subsection (1) does not apply where, by reason of section 71B(1)(b) of PPERA, the entity by whom the donation would be made is a permissible donor in relation to the donation at the time of its receipt by the party.’

This new clause is intended to require that any donations made by UK companies or limited liability partnerships come from sources generating profits made by genuine commercial activity carried out within the UK, and prevent donations of foreign or unknown provenance from being channelled through UK companies or LLPs into regulated political entities (political parties, third parties, campaigners at referendums, candidates etc.)

New clause 21—Report on co-ordination and co-operation

‘The Secretary of State must lay a report before both Houses of Parliament no later than 31 December 2022, and at least once in each subsequent calendar year, setting out progress in co-ordination and co-operation in relation to this Act and (in particular) an assessment of the effectiveness of information-sharing in relation to entities registered or operating in—

(a) the Crown Dependencies (the Bailiwicks of Jersey and Guernsey, and the Isle of Man), and

(b) the British Overseas Territories (Anguilla, Bermuda, British Antarctic Territory, British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Montserrat and Pitcairn Islands.’

This new clause requires annual reports on transparency and enforcement in the Crown Dependencies and the British Overseas Territories.

New clause 22—Report on resources for implementing this Act

‘(1) The Secretary of State must lay a report before both Houses of Parliament no later than 31 December 2022, and at least once in each subsequent calendar year, setting out the funding and achievements in relation to this Act of—

(a) National Crime Agency and

(b) the Office of Financial Sanctions Implementation,

in the most recent year ending 31 March, with an assessment by the Comptroller and Auditor-General of value for money of each of those organisations.

(2) Each report under subsection (1) must be accompanied by—

(a) an assessment from the organisation concerned of the adequacy of the long-term financing provided by the Secretary of State, and

(b) an assessment by that organisation of the expected outcomes in terms of performance and value for money, if funding for the next financial year was increased by 20%

(3) Before laying a report under subsection (1), the Secretary of State must consult the Scottish Ministers.’

The intention of this new clause is to ensure parliamentary oversight of the funding of the National Crime Agency and Office of Financial Sanctions in relation to the implementation of this Act.

New clause 23—Scottish Limited Partnerships

‘(1) The Secretary of State must consult the Scottish Ministers on the application of this Act to Scottish limited partnerships.

(2) The Secretary of State may make regulations, including supplementary, incidental and consequential provision, to apply any provision in this Act to Scottish limited partnerships.

(3) Regulations made under subsection (2) with the consent of the Scottish Ministers are subject to the negative procedure.

(4) Regulations made under subsection (2) which do not have the consent of the Scottish Ministers are subject to the affirmative procedure.’

The intention of this new clause is to ensure that Scottish limited partnerships are covered by the provisions in the Bill.

New clause 24—Review of funding arrangements for enforcement agencies

‘(1) The Secretary of State must conduct a review of the suitability of the funding arrangements for enforcement agencies in light of the provisions of this Act and in connection with the wider context of economic crime.

(2) The report of the findings of the review under subsection (1) must be published and laid before Parliament within 3 months of this Act being passed.’

This new clause would require the Secretary of State to conduct a review of the funding arrangements for enforcement agencies in light of the provisions of the Bill and in relation to economic crime more broadly.

New clause 25—Reports on operation of Act

‘(1) The Secretary of State must lay before both Houses of Parliament no later than 31 December 2022, and at least once in each subsequent calendar year, a report on the operation of this Act.

(2) The Secretary of State must also lay before both Houses of Parliament no later than 31 December 2022, and at least once in each subsequent calendar year, a report from the register of companies in England and Wales on the operation of this Act.’

The purpose of this new clause is to ensure that Parliament is regularly informed about the operation of this Act.

New clause 26—Designation of persons under sanctions regulations: reform

‘(1) The Sanctions and Anti-Money Laundering Act 2018 is amended as follows.

(2) In section 11 (designation of a person by name under a designation power), leave out subsection (2)(b)(ii).

(3) In section 12 (designation of persons by description under a designation power), leave out subsection (5)(b)(ii).’

This new clause would amend the Sanctions and Anti-Money Laundering Act 2018. It would remove the requirement that a Minister, when designating a person by name or persons of a specified description in regulations made under that Act, to have regard to the likely significant effects of the designation on those persons.

New clause 27—Commission for the Protection of Whistleblowers (No.2)

‘(1) The Secretary of State shall establish a Commission for the Protection of Whistleblowers for the purpose of promoting transparency in relation to breaches of the provisions of this Act.

(2) The Commission for the Protection of Whistleblowers must work with relevant authorities to ensure that any concerns raised by whistleblowers in relation to breaches of the provisions of this Act are dealt with responsibly and effectively by the relevant authorities.’

New clause 28—Emergency asset-freezing orders

‘(1) The Secretary of State may make an unexplained wealth order in respect of any property or cash in whatever form, including sums held in blockchain accounts, that is held (or that the Secretary of State has reason to believe that is held) by or on behalf of a designated person.

(2) The Secretary of State may make an interim freezing order in respect of the property or cash in whatever form, including blockchain, if the Prime Minister considers it necessary to do so for the purposes of avoiding the risk of any recovery order that might subsequently be obtained being frustrated, and that it is in the interests of national security that the order be made.

(3) An interim freezing order has the same meaning as in section 362J of the Proceeds of Crime Act 2002.

(4) The Secretary of State may designate under subsection (1) any person whom Secretary of State considers meets, or is likely to meet, the criteria for sanctions to be imposed under the Sanctions and Anti-Money Laundering Act 2018.

(5) The power in this section lapses 6 months after the date on which this Act is passed, unless the Secretary of State makes an order to continue this section in force for a further period of up to six months.

(6) An order under subsection (4) may be made more than once, but every such order may be made only after a draft of the order has been approved by resolution of each House of Parliament.’

The intention of this new clause is to provide a temporary emergency power to freeze the assets of individuals, companies or other entities in order to prevent asset flight before sanctions are in place.

New clause 29—Asset freezing in respect of individuals considered for sanctions

‘(1) The Secretary of State may by notice publish the name of a person being considered as a subject for sanctions.

(2) A person in respect of whom a notice has been published under subsection (1) is immediately subject to the provisions of this section.

(3) A person in respect of whom a notice has been published under subsection (1) is prohibited from—

(a) selling any assets they own or have an interest in,

(b) moving any assets they own or have an interest in out of the United Kingdom, or

(c) moving any of their funds out of the United Kingdom.

(4) ‘Assets’ in subsection (3)(a) or (b) includes (but is not limited to)—

(a) land;

(b) houses, flats or other private accommodation;

(c) commercial, industrial, agricultural and other buildings, premises or property;

(d) businesses;

(e) personal possessions, works of art, jewellery or collectibles with an individual value of more than £500;

(f) motor vehicles;

(g) yachts or boats; and

(h) aircraft.

(5) ‘Funds’ in subsection (3)(c) means financial assets and economic benefits of any kind, including (but not limited to)—

(a) gold, cash, cheques, claims on money, drafts, money orders and other payment instruments;

(b) deposits with relevant institutions or other persons, balances on accounts, debts and debt obligations;

(c) publicly and privately traded securities and debt instruments, including stocks and shares, certificates representing securities, bonds, notes, warrants, debentures and derivative products;

(d) interest, dividends or other income on or value accruing from or generated by assets;

(e) credit, rights of set-off, guarantees, performance bonds or other financial commitments;

(f) (letters of credit, bills of lading, bills of sale; and

(g) documents providing evidence of an interest in funds or financial resources.

(6) A person who breaches any prohibition under this section commits an offence.

(7) A person who engages in an activity knowing or intending that it will enable or facilitate the commission by another person of an offence under paragraph (6) commits an offence.

(8) A person guilty of an offence under subsection (6) is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;

(b) on summary conviction—

(i) to imprisonment for a term not exceeding six months; or

(ii) to a fine which in Scotland or Northern Ireland may not exceed the statutory maximum,

(None) or to both.

(9) A person guilty of an offence under subsection (7) is liable on summary conviction—

(a) to imprisonment for a term not exceeding six months; or

(b) to a fine which in Scotland or Northern Ireland may not exceed level 5 on the standard scale,

or to both.’

This new clause would prevent individuals whom the Secretary of State has named as being considered as a subject for sanctions from selling their assets or moving funds or assets out of the UK.

New clause 30—Proposals for enforcement agencies to retained recovered wealth

‘Within 28 days of this Act being passed, the Secretary of State must publish and lay before Parliament a report setting out proposals to allow for the wealth recovered in connection with the use of unexplained wealth orders and other anti-corruption powers under the Proceeds of Crime Act 2002 and the Criminal Finances Act 2017 to be retained by the agencies involved in countering economic crime.’

This new clause would require the Secretary of State, within 28 days of the Bill being passed, to publish and lay before Parliament a report setting out proposals to allow for the wealth recovered in connection with the use of unexplained wealth orders and other anti-corruption powers to be retained by the relevant enforcement agencies.

Amendment 28, page 35, line 3, schedule 1, at end insert—

“(1A) The required information about an individual owner who is not a British citizen must include information about whether that individual has ever held a Tier 1 (investor) visa issued in accordance with paragraphs 245E to 245EF of the Immigration Rules.”

This amendment would ensure transparency over the use of overseas entities by individuals who have held so-called golden visas.

Amendment 40, in schedule 1, page 35, line 38, at end insert—

“6 In a case where Condition 5 in paragraph 6 of Schedule 2 is met in relation to the registrable beneficial owner, the required information includes details of the role of the beneficial owner in relation to the trust.”

This amendment would ensure that the required information includes details of the role of the beneficial owner in relation to a trust, where a person controls a trust which owns shares, has voting rights, can appoint or remove directors or exercise significant influence or control over an entity.

That schedule 1 be the First schedule to the Bill.

Amendment 3, in schedule 2,  page 37, line 30, at end insert—

“4A Any individual trust, company, government or public authority wherever resident shall be treated as a registrable beneficial owner in relation to an overseas entity for the purposes of this Act if a beneficial owner of a qualifying estate as defined in Schedule 4A that is held by the overseas entity whether or not the individual trust, company, government or public authority holds itself any interest in that overseas entity.

4B In relation to a trust which is to be treated as a registrable beneficial owner, full details shall be given in the registration of the senior trustees and principal beneficiaries.”

The intention of this amendment is to facilitate the identification of the beneficial owners of registered trusts.

Amendment 18, page 38, line 5, leave out “25%” and insert “10%”.

The intention of this amendment is to define as a beneficial owner a person who holds more than 10% of the shares in an entity.

Amendment 19, page 38, line 8, leave out “25%” and insert “10%”.

The intention of this amendment is to define as a beneficial owner a person who holds more than 10% of the voting rights in an entity.

Amendment 39, page 38, line 23, at end insert—

‘6A (1) A person (“A”) is a beneficial owner of an overseas entity or other legal entity (“B”) if—

(a) A is closely connected to a person (“C”) to whom one or more of the conditions in paragraph 6 applies; and

(b) A—

(i) benefits directly from C’s role in respect of B, or

(ii) previously exercised the role in relation to B that is now exercised by C.

(2) For the purposes of this Schedule two persons are “closely connected” if—

(a) they are married to one another;

(b) they are in a civil partnership with one another;

(c) one person is the parent of the other.

(d) one person is the brother or sister of the other.

(3) Where this paragraph applies, the required information under Schedule 1 must be provided in a single statement in relation to both A and C.’

Amendment 20, page 40, line 34, leave out “25%” and insert “10%”.

This amendment is consequential on Amendment 18.

Amendment 21, page 40, line 36, leave out “25%” and insert “10%”.

This amendment is consequential on Amendment 18.

Amendment 22, page 41, line 1, leave out “25%” and insert “10%”.

This amendment is consequential on Amendment 19.

Amendment 23, page 41, line 2, leave out “25%” and insert “10%”.

This amendment is consequential on Amendment 19.

That schedule 2 be the Second schedule to the Bill.

Amendment 13, in schedule 3, page 45, line 10, leave out paragraph (b).

This amendment would require the registrar to enter a restriction in the register in relation to a qualifying estate in which an overseas entity is registered as the proprietor regardless of the date of the registration.

Government amendment 55.

Amendment 15, page 48, line 20, leave out “18 months” and insert

“save as provided for by section (Transitional period for qualifying estates) 28 days save as provided for by section (Transitional period for qualifying estates)”.

This amendment would reduce the period for registration as an overseas entity within from 18 months to 28 days save as provided for by NC6.

Amendment 14, page 48, line 26, leave out paragraph (b)

This amendment would extend the offence to all overseas entities, and every officer of the entity in default regardless of the date of the registration.

Manuscript amendment 64, page 49, line 9, leave out from “estate” to the end of line 12 and insert “from the commencement date”.

Government amendment 56.

Amendment 16, page 49, line 11, leave out “18 months” and insert

“28 days save as provided for by section (Transitional period for qualifying estates)”.

This amendment would reduce the period from 18 months to 28 days for entering the restriction relating to a qualifying estate save as provided for by NC6.

That schedule 3 be the Third schedule to the Bill.

Government amendment 57.

Amendment 17, in schedule 4,  page 57, line 24, leave out “18 months” and insert “6 months”.

This amendment would reduce the transitional period from 18 months to 28 days save as provided for by NC6.

Government amendment 58.

That schedules 4 and 5 be the Third and Fourth schedules to the Bill.

18:45
Paul Scully Portrait The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
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Over the last 10 days, the world has watched the actions of Vladimir Putin in shock and horror. The ability to tackle dirty money and impose economic sanctions has never been so important. We are putting the Bill through in an expedited way. It is important that I put on the record what the Bill will do and set out the intention behind the Government amendments. I will seek to be brief because a number of right hon. and hon. Members are keen to speak to their amendments.

As my right hon. Friend the Home Secretary set out earlier, the Bill has four main objectives. First, it will prevent and combat the use of land in the UK for money laundering purposes through the establishment of the public register of beneficial owners of overseas entities owning land in the UK, which will be held by Companies House. Secondly, it will reform the UK’s unexplained wealth order regime to enable law enforcement to investigate the origin of properties and recover the proceeds of crime. Those measures remove key barriers to the effective use of UWO powers and will increase and reinforce operational confidence in relation to their use. Thirdly, it will amend financial sanctions legislation, including the test for imposing monetary penalties and powers, to publicly name those breaching financial sanctions. That will make it easier for the Government to act against those who fail to comply with sanctions. Fourthly, it will amend the Sanctions and Anti-Money Laundering Act 2018 to streamline the current legislation so the Government can respond even more swiftly and effectively to sanction oligarchs and other businesses associated with Putin’s regime.

Part 1 establishes the new register of overseas entities, which will require overseas companies owning or buying property in the UK to provide the information about their true owners. Clauses 1 to 6 provide an overview of the register, define an overseas entity and establish the register and registration process. Clauses 7 to 11 set out the duties for updating and removing entities from the register. Clauses 12 to 19 set out mechanisms for obtaining, updating and verifying information, penalties for non-compliance and exemptions to various requirements.

Chris Bryant Portrait Chris Bryant (Rhondda) (Lab)
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Amendments 24 and 25 would require that, when someone is registering or updating, they also have to notify the fact that one of the people to whom they are referring as an overseas person is a sanctioned individual. Will the Government accept those amendments tonight?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I thank the hon. Gentleman for his intervention. I have spoken to colleagues across the House. We will certainly look at how to draft the measure correctly to ensure that it serves its purpose. We will certainly look in the other place to debate that further.

Angela Eagle Portrait Dame Angela Eagle (Wallasey) (Lab)
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Will the Minister give way?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I will not give way for a second, because I want to ensure that we can cover the ground. I will deal with some of the opposing amendments at the right time: at the end of the Committee.

Clauses 20 to 30 cover the annotation and inspection of the register, and the disclosure, protection, correction and removal of information. Clauses 31 to 39 cover measures including the false statement offence and amendments to land registration as well as provisions about offences and penalties. The schedules define key terms such as “registrable beneficial owner” and cover amendments to land registration laws, for example, regarding land ownership and transactions for England and Wales, Scotland and Northern Ireland respectively.

Angela Eagle Portrait Dame Angela Eagle
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Will the Minister give way?

Stewart Hosie Portrait Stewart Hosie (Dundee East) (SNP)
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Will the Minister give way?

Stewart Hosie Portrait Stewart Hosie
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Schedule 2, paragraph 6 describes a beneficial owner as meaning someone, for example, who

“has the right to exercise, or actually exercises, significant…control over”

an “entity”. However, part 4 of schedule 2—on beneficial owners exempt from registration—goes on to describe such a person as someone who has

“the right to exercise, or actually exercises, significant influence or control over”

an “entity”. It may be that that apparent confusion is dealt with in part 3 of schedule 2, which deals with an entity

“subject to its own disclosure requirements”,

but it is not at all clear whether someone has to be a registrable beneficial owner, or whether they are exempt for precisely the same criteria.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I thank the right hon. Gentleman for that point; it comes back to something that was said in the previous debate about persons of significant control, which I did not address at the time. However, I will take that point away and discuss it with the right hon. Member for Barking (Dame Margaret Hodge) and others to make sure that we can get any drafting on that exactly right.

Angela Eagle Portrait Dame Angela Eagle
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Will the Minister give way?

Paul Scully Portrait Paul Scully
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I will not just because I want to make sure that we can cover all the areas, and we will be short of time.

Important changes in part 2 include changing the unexplained wealth order regime, increasing the scope of the existing powers to ensure that an enforcement authority can obtain the information that they need even when the assets in question are held in trusts or other complex ownership structures. That is to ensure that the true owners cannot hide their claim over assets to avoid the force of the law. The introduction of an alternative test to the existing income requirement also provides flexibility for agencies to tailor the UWO applications to the facts of a case.

Clauses 44 to 47 will mitigate the significant operational risks to an enforcement authority and provide a more encouraging basis for them to use their powers to seek a UWO: first, by extending the period for which an interim freezing order has effect, enabling agencies to review material provided in response to a UWO without significant time pressures; and secondly, by reforming the cost rules to protect law enforcement against incurring substantial legal costs following an adverse ruling.

Part 3—clauses 48 to 51—strengthens the financial sanctions legislation to change the monetary penalty test and internal review process. Those changes will allow the Office of Financial Sanctions Implementation to publicly name sanctions breaches even when no monetary penalty has been imposed and allow for greater information sharing across Government.

We are really grateful for the support of all parties in passing this legislation as quickly as possible, but in the light of the deteriorating situation and the Government’s desire to work together to strengthen and accelerate this package, I want to outline further measures that we have tabled as Government amendments.

New clauses 32 to 40 will amend the Sanctions and Anti-Money Laundering Act 2018 to streamline the current legislation so that we can respond even more swiftly and effectively to sanction oligarchs, individuals and businesses associated with Putin’s regime and others like them in the future. New clause 32 will simplify the procedural requirements that can delay the implementation of sanctions. New clauses 33 and 34 are designed to streamline the designation of individuals and entities, allowing us better to respond to fast-moving events. New clause 36 will ensure that the proposed changes in new clauses 33 to 35 will apply to sanctions regulations that are already in place. New clause 37 will remove the requirement for Ministers to review each sanctions regime every year and to review each designation every three years. That will free up vital resource to focus on developing new designations.

Angela Eagle Portrait Dame Angela Eagle
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Will the Minister give way?

Paul Scully Portrait Paul Scully
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I will—the hon. Lady has been trying so hard.

Angela Eagle Portrait Dame Angela Eagle
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I thank the Minister for giving way finally, but it all counts. He seemed to be saying to colleagues earlier that his attitude to our amendments is that he is willing to discuss them after the Commons stages of the Bill and to do something in the Lords. Is that what he is saying? Is he telling us today that the Government will not accept any more Opposition or Back-Bench amendments and that he will leave it to the House of Lords to change these things? Clearly, if that is going to be his attitude, we need to know.

Paul Scully Portrait Paul Scully
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I will cover the amendments more fully in my closing remarks, once they have been spoken to. None the less, I want to ensure that the amendments with which I have sympathy do exactly what they are intended to do and that the drafting is right. I am happy to work with colleagues who have tabled them to make sure that we can get that right and to see what more we can do in the other place.

Sammy Wilson Portrait Sammy Wilson (East Antrim) (DUP)
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Does the Minister accept that many of the amendments have been tabled today because people genuinely want to make the Bill better? There would be no better signal to send from this House tonight than the Government accepting the reasonable amendments, regardless of where they come from, if it is believed that they strengthen the Bill. If we find that they do not do what they are meant to, the opportunity is available to make them do that in the other House. At least that would send a great message from this House tonight that there is widespread support for the Bill and that the Government are listening.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

There are a number of amendments and they do not all do what is intended. On amendments 24 to 26, I respectfully ask the Members concerned not to push them to a vote, but I will happily work with them to see what more we can do in the other place.

Iain Duncan Smith Portrait Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
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My understanding is that the Government accept amendments 24 to 26 in principle and will work in the Lords to put something in the Bill that delivers what they suggest. Am I correct in that?

Paul Scully Portrait Paul Scully
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Essentially, yes. We want to make sure that we can work with hon. Members on that. I do not want to accept all those amendments here and now, but I want to make sure that we can get it right in the other place, working with them at that stage.

David Davis Portrait Mr David Davis (Haltemprice and Howden) (Con)
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I would like this to be rendered in English for the world at large to understand. If the Minister puts into law in the Lords all the amendments that we proposed, will it not still be the case that nothing can be done to stop a Russian oligarch from moving, selling or transferring his assets, even if we know all about it, until the moment when he is actually sanctioned?

Paul Scully Portrait Paul Scully
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First, I thought that when I said, “Essentially, yes,” it was a clear, two-word answer to a simple question. I will cover my right hon. Friend’s amendments in my closing remarks, but I wanted to speak to the Government amendments at this point. However, his new clause 29 would give a huge amount of powers not just to the Foreign Secretary in relation to Putin’s regime, but to future Foreign Secretaries. We need to tread carefully and look at that carefully before the House acts in that way.