Economic Crime (Transparency and Enforcement) Bill

Lord Pannick Excerpts

Committee stage
Monday 14th March 2022 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

I think that is a story for the noble Baroness’s memoirs, and I look forward to reading it.

There are lots of good amendments in this group but I want to speak to Amendments 56, 57, 61 and 62 about the implementation period. For me, the six-month implementation period makes absolutely no sense. We are trying to rush this through—we here are going to sit until I do not know what time tonight or tomorrow morning to make this emergency legislation happen, but we are still giving people six months to do this. The Government are taking so long that activists are going into oligarchs’ mansions and seizing them in London and Paris to house refugees, if we ever get any refugees here. I cannot blame this Government for the Paris seizure, but it suggests that people are getting very tired of the fact that they are being so slow about this. Why would anyone need six months? If they have been honest about paying their taxes, declaring profits and detailing the origin of their money, why do they need six months? Surely, any decent accountant—I am sure that there are several in your Lordships’ House—could sort this out within 14 days or, at the worst, 28 days. I think there is no reason for the Government not to support one of these two pairs of amendments that shorten the implementation period.

[Lord Pannick (CB)]

My Lords, I shall speak about Amendment 92 in the names of the noble Lord, Lord Coaker, and the noble Baroness, Lady Kramer, which would introduce a new clause headed:

“Asset freezing in respect of individuals considered for sanctions”.


Before I address that amendment, I need to give a fuller description of my interests—or, more accurately, my non-interests—than I would normally give. The reason for that is because in the House of Commons last week during the Second Reading debate on this Bill, Mr Matt Hancock complained that the 2018 Act contained amendments that

“came from those who are acting for oligarchs and then legislating for loopholes.”—[Official Report, Commons, 7/3/22; col. 31.]

The Home Secretary responded that she “wholeheartedly” agreed with Mr Hancock.

The position is this: with the noble and learned Lord, Lord Judge, who I see is in his place, I tabled amendments to what became the 2018 Act. They were designed to ensure a fair procedure and compliance with the rule of law. On Report, on 15 January 2018, the Government brought forward at column 442 amendments of their own on these subjects which were supported by me and, much more importantly, by the Labour and Liberal Democrat Front Benches. The House of Commons was content with the provisions approved by your Lordships’ House.

It is correct that in 2017 and 2018 I did not mention that I have advised and represented one client on sanctions matters in the last 10 years. I mention it today for the avoidance of any doubt. It was President Putin’s close associate Arkady Rotenberg. I represented him in 2014 and 2015 in the Court of Appeal on a sanctions issue in family law proceedings. I also advised him in relation to his claim in the General Court of the EU in mid-2015 challenging the sanctions against him, although I did not represent him at the hearing of his case in Luxembourg in 2016.

Of course, I did not put forward amendments to the sanctions Bill in late 2017 and early 2018 to legislate for loopholes. I put forward amendments with the noble and learned Lord, Lord Judge, as I have done on so many other Bills, because I am concerned about the width of ministerial powers and the need for fair procedures.

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[Lord Fox (LD)]

My Lords, it is a pleasure to follow the noble Lord, Lord Pannick. I am glad that he had the opportunity to say what he had to say; I was surprised that he did not speak on Second Reading, for that very reason, so I am glad he has now had a chance—

[Lord Pannick (CB)]

I am very grateful to the noble Lord. I had an unavoidable other professional commitment, and the Second Reading took place at very short notice.

[Lord Fox (LD)]

It did indeed, and I am glad that the noble Lord has had the opportunity to speak.

Once again, we have a huge number of varied amendments lumped into the same group, which I think is a side-effect of the process we are travelling through. I am going to focus on two themes. I am not going to interpose myself between lawyers on the subject of Amendment 92, but I look forward to the Minister’s response to the comments of the noble Lord, Lord Coaker, and my noble friend Lady Kramer.

I will turn to Amendments 56, 61, 80 and 83 in the name of the noble Baroness, Lady Chapman, and signed by myself. I will be brief because I do not think we have to speak for very long on this. The noble Lord, Lord Coaker, has been eloquent in this vein already in the unfortunate absence of the noble Baroness, Lady Chapman.

During Second Reading we heard a chorus of disapproval on the six-month transition period, and there is a good reason for that. The noble Lord, Lord Coaker, was clear on those reasons, as were other speakers, including the noble Baroness, Lady Jones, and the noble Lord, Lord Sikka. We have to focus on what the Government are seeking to achieve and how they are going to achieve it. While that number is very important, the second number, introduced by the noble Lord, Lord Coaker, may be even more important, and it is the one covered by Amendment 97 in my name. It seeks to bring commencement forward to the First Reading of this Bill in the Commons. When I tabled that amendment, I was thinking of the National Security and Investment Act, which did just that.

In one of the meetings that the Minister kindly invited me to, he set out a number of reasons why that commencement date is, in Government’s view, not popular. The longer the Minister’s explanations were, the more alarmed I became, because it is clear now that the commencement date is subject to the pace of the slowest moving IT project. That is a matter of great concern, and certainly should be to your Lordships’ House.

In looking at the six-month transition period, we cannot isolate it from the commencement period, as the noble Lord, Lord Coaker, wisely stated. What the Minister has to think about and convince your Lordships of is how these two times work together. Can they be concurrent? Indeed, can commencement start without the whole system being in place? In other words, can there be some flexibility in how parts of the Bill come in? That would be controlled through statutory instruments, which the Government have control over.

Commencement is one thing, statutory instruments are another and the transition period is a third. They all add up to either a long time or a medium amount of time. The Minister needs to explain the formula the Government have in mind, because at the moment it seems to be a blank number. We do not really know when the terms of this Bill will be in place.

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[Baroness Kramer (LD)]

My Lords, I will speak briefly on this issue, because I am very much of the opinion, as are many in the Committee, that a combination of both a public register—so that civil society groups, journalists, activists and people in different countries will have access to different kinds of information—and vigorous verification is the kind of safeguard we need if we are to end the history of the London laundromat and prevent London remaining a magnet for a great deal of dirty money that is floating around the globe.

Like many people, when I heard that there would be a register of beneficial owners of property that would have a verification component and that verification would be introduced at Companies House, I was elated. Then I actually read the language in the Bill and it seemed, as the noble Lord, Lord Faulks, said, so light touch that there might be something vigorous, but on an exceptional basis and not as a matter of routine. As there is little in the Bill to strengthen the responsibilities of the enablers, I am worried that we will end up with the worst of all worlds—a headline that makes it looks as though we are taking significant and serious action, but implementation that completely misses the mark.

I know the Minister has sometimes said that we have plenty of legislation to deal with enablers, and which has been strengthened somewhat, but if we had adequate legislation to deal with enablers we would not have a single instance of money laundering in this country, because nobody bringing in dirty money is able to buy a single piece of property, take control of a company or engage in any other activities without using an enabler. You need the lawyers, accountants and property developers. We clearly cannot choke off that particular avenue to sustain the London laundromat. All these things come together. I hope the Minister will look again at verification. It will partly be a matter of resources—those absolutely matter—but it also has to be standard practice that a very high level of verification is embedded to deal with every item in the register.

[Lord Pannick (CB)]

My Lords, I share the concerns expressed about the need for rigorous verification. I note that Clause 16 confers a broad power on the Secretary of State to make regulations in this field. Is the Minister able to assure the Committee that those regulations will impose a rigorous form of verification and requirements along the lines of those that have been proposed?

[Lord Cromwell (CB)]

Before the Minister tries to answer that, we need to recognise delivering what the noble Lord, Lord Eatwell, wants would be absolutely transformative to Companies House. There is no tinkering at the edges here; this would be a massive transformational change and, unless we get that, this amendment will not deliver what is being asked of it.