Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 2) Regulations 2023

Tulip Siddiq Excerpts

Monday 8th January 2024 General Committees

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve under your chairship, Ms Fovargue. We support the regulations, which amend the list of high-risk third countries to reflect the changes made to the Financial Action Task Force list.

I heard what the Minister said about the Cayman Islands and its progress, and have just one question to ask him about it. It is welcome that, five years after the Sanctions and Anti-Money Laundering Act 2018 legislated for public registers in the overseas territories, the Cayman Islands has finally announced that it will introduce company registers, but I worry that the registers will not be made fully public. There will be a filter that allows access only by those who can demonstrate a “legitimate interest”. Does the Minister share my concern? Will he work with his counterparts in the Cayman Islands and the other overseas territories to ensure that they raise their standards where they may be lacking?

[Bim Afolami]

I thank the shadow Minister for supporting the regulations. It is incumbent on me to make two key points to address her question about the Cayman Islands. First, a country’s being taken off the list reflects that it has now satisfied what the Financial Action Task Force has set out for it, that it has worked hard and has evidenced how it is doing that. The point about ownership lists and whether a legitimate interest is required is a fair and interesting one, but it has not triggered the Financial Action Task Force to say that the Cayman Islands is not largely compliant. That is the first point. The second is that this is always evolving and no country in the world is perfect. Illicit activity is a scourge that we are trying to remove from our financial system, so we continue to work with the Cayman Islands to make sure it does everything it can.

[Tulip Siddiq]

I draw the Minister’s attention to Transparency International’s warning that the requirement to demonstrate a legitimate interest could limit access for civil society organisations and journalists, who in recent years have been key in uncovering corruption and money laundering. That is my point when I ask about access to the registers. Does he share my concerns about that?

[Bim Afolami]

I am happy to look into that. The UK and various overseas territories, not just one in particular but across the whole landscape, have been working at official level technically to improve access and visibility in terms of beneficial ownership. The UK, when Lord Cameron was Prime Minister, was a leader in doing that internationally, and we will continue that work. I am happy to continue discussing with the hon. Lady what more we can do in respect of the Cayman Islands.

I listened carefully to the hon. Lady’s speech, and it is the Government’s view that the amendment will ensure that UK legislation remains up to date and in line with international standards. It is clear that money obtained through corruption or criminality is not welcome in the UK and should not be welcome anywhere. That is why we are playing such a leading part in the Financial Action Task Force.

The new procedure for dealing with the problem will enable regulations to allow the UK to automatically reflect changes agreed by the Financial Action Task Force in our own list. In the event that the Government choose to deviate from the list, such updates will need to proceed through a draft affirmative SI.