Proceeds of Crime Bill

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Norman Baker: That might not always be possible. Someone who has fleeting doubts might investigate a

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transaction, but although they might fail to find evidence of criminal activity, their doubts might linger. Should a disclosure be made under such circumstances? With regard to the legislation, I suggest that ''a reasonable suspicion'' is not an unreasonable test.

Mr. Ainsworth: It appears that the hon. Gentleman is concerned about the volume of disclosures. We will discuss the advice that we have received, and whether NCIS and other forces of law and order are happy with the potential increase in the volume of disclosures. Of course, such a doubt should not be considered fleetingly but examined further. However, if on reflection the person cannot dispel that doubt, he should be required to disclose it.

Mr. Hawkins: Before we continue to explore the impact of the Bill, I ask the Minister to consider a point that relates directly to his response to what the hon. Member for Glasgow, Cathcart (Mr. Harris) said about Northern Ireland. Representatives of some of the most reputable firms in the country—who have never been suspected of being dishonest—have spent considerable time discussing matters with me and my hon. Friend the Member for Beaconsfield. When the Minister seriously thinks about the matter rather than wanting to score a political point, does not he recognise—as those representatives did—that, as drafted, the Bill will be unworkable?

If the Minister introduces a provision that representatives of reputable firms tell us will not work, there will be a problem with organised crime. It is a cheap point to say that the Government cannot be accused of both not dealing with organised crime and introducing unworkable legislation. We are saying both: the Bill will not work, because it will not deal with organised crime.

Mr. Ainsworth: There are Opposition Members to whom—if they accused me of making a cheap political point—I would pay some attention. The hon. Gentleman is not one of them. I am not trying to make a cheap political point. I am entitled to point out that there are clear contradictions between what the Opposition say in one forum and what they say in another. They cannot have their cake and eat it.

The hon. Gentleman talks about reputable organisations, but he is wrong if he believes for a moment that we have not discussed the issue or received representations, or that we did not publish a draft Bill and did not enter into a consultation process. Our officials repeatedly met representatives of such organisations. If he believes that I have not listened to those representations and have tried to minimise the burden through that process, he is wrong. Our decision is that those powers are needed, and I am sorry if he does not accept that.

Mr. Stinchcombe: On disclosures and the threshold of suspicion that would require disclosure to be made, I am worried about the dovetailing of the provision with clause 327(3). If a person disclosed information solely on the basis of a fleeting suspicion, the disclosure might not be protected. Has that matter

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been taken into account, and what would be the outcome?

Mr. Ainsworth: We are talking about a different situation when referring to protected disclosures. Under clause 324(4), the third condition is that the disclosure be made to

    ''a constable, a customs officer or a nominated officer as soon as is practicable''

after the information or other matters come to the discloser.

If the discloser believed that his suspicion required further thought and investigation before a disclosure was made, he would potentially be protected under clause 324(4). Such a person could say that he disclosed the matter as soon as it was practicable, after he had obtained the information and had satisfied himself that the information was valid, bona fide and warranted disclosure.

10 am

Mr. Davidson: Does the Minister agree that we should join together and give thanks to God for the hon. Member for Henley, because his comments about sneaking, which I am waiting for the Opposition spokesman to rebut, reveal the Conservatives' attitude? They see disclosure as sneaking—or clyping, to use a Scottish term. They consider that good chaps together should be able to launder drugs money without the nanny state intervening. That is what this is all about.

The Minister is in danger of being too soft on this matter. He mentioned, in the context of fleeting doubts, that a person might know or suspect that cash is dishonest. I worry that that allows somebody to choose not to know or suspect that. We should have a provision to say that if a person did not know or suspect, they bloody well ought to have. Does the Minister agree that that would be a valuable addition to the Bill and would stop corrupt lawyers, bankers and accountants from washing their hands of the deaths that drug money causes in my constituency and many others?

Mr. Ainsworth: Let us not pre-empt our possible discussion on clause 324.

I do not want us to be complacent about the matter. From time to time we hear, ''We haven't got a problem. It is good old English law. Aren't we marvellous?'' We are one of the major financial institutions of the world, and our reputation is extremely important. We should protect that and do nothing through negligent or positive action to damage that position.

Mr. Grieve: I agree with the Minister. It is worth pointing out, to pick up the point of the hon. Member for Glasgow, Pollok, that even today, if a financial adviser or lawyer has any doubt about the legitimacy of a transaction, under the current confidentiality requirements, he should not carry it out. That is a well-established and well-observed rule, although I accept that there may be exceptions to it.

The Minister has not answered the question about the workability of the provision, although we may address it later. To what extent will the quantity of

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disclosure that will be required make ordinary, commercial transactions impossible? There must be disclosure, but as he will acknowledge, a person must get the consent of NCIS or the police before going ahead with the transaction. There is ample current evidence that that causes enormous problems because people are left in limbo and not told what to do about such transactions.

Mr. Ainsworth: The hon. Gentleman is absolutely right. We discussed the issue extensively with those who lobbied us. We must ensure that the provision works and does not cripple the ability of people to do their jobs.

NCIS is urging us on because it wants this level of disclosure. That may come out during our discussion of other clauses. If we want NCIS to be effective, it is phenomenally important that it gets that. Even a small and isolated disclosure may lever up something that is concealed and much larger than that.

Mr. Hawkins: The Minister has been very helpful during our sittings by giving members of the Committee further information. I think that I am right in saying that we have not seen in the public domain, either during the consultation process or when the Bill was drafted, the specific advice from NCIS on the point to which he has referred. Given that he is relying directly on that to support his case, will he consider, either today or at a later stage, allowing all members of the Committee to have sight of it?

Mr. Ainsworth: NCIS has made public statements, as it did during the consultation process, and I have not tried to restrict what it has said about all the measures in the Bill, nor am I attempting to do so now. If a member of the Committee wishes to approach NCIS and ask for its opinion on the matter under discussion, I will be relaxed about that. I am sure that what it says publicly will be in line with what I have told the Committee. The hon. Gentleman knows that it is not my practice to publish advice to Ministers and I shall not open up such issues.

I want again to put on the record what I said on Second Reading. When conducting evaluations of all its members—there have been two rounds since 1991—the Financial Action Task Force issued information in an attempt to promote policies to combat money laundering. It has 29 members, including major financial centres throughout North America, Europe, Asia and South America. The information exposes the assertion that the United Kingdom has a massive burdensome system of reporting. It is quite the reverse. In 1994 to 1999, there were 273 prosecutions in Belgium. In Germany, there were 298. In the latest year for which there are figures, there were 118 prosecutions and 39 convictions in the United Kingdom. In Belgium, the figure for convictions was 182. We know the relative size of the financial sectors in our two countries, and that is the top example that I can give.

We do not have a good record in such matters. A substantial change is needed if we are to combat money laundering. An integral part of organised crime is that so many of its facets cannot operate unless it

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can turn its ill-gotten gains into seemingly legitimate moneys. Tough action is needed. I ask the hon. Member for Surrey Heath to withdraw the amendment. If he does not, I shall ask my hon. Friends to vote against it.

Mr. Wilshire: I seek your guidance, Mr. O'Brien, on how to deal with the amendment without straying into stand part issues. Similarly, it is difficult to talk to the amendment or the clause without referring to clause 329. I know the dangers of straying too far into a clause that we have not reached, and I apologise in advance if I do.

One or two of the arguments that have been advanced during the past hour are worthy of comment. I agree with the Minister that we must be as hard as we can on people who want to launder money. I have no difficulty with that. He said that we had a problem. I agree with that, too. However, we cannot go from saying that we have a problem to saying, ''And this is the only solution.'' The solution suggested by my hon. Friend the Member for Surrey Heath does not commend itself to the Government. I have received that message clearly. I am not a lawyer, so I shall not try to improve on my hon. Friend's solution—

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Prepared 17 January 2002