Proceeds of Crime Bill

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Mr. Hawkins: On a point of order, Mr. McWilliam. Unlike a former President of the United States, I can walk and chew gum at the same time. I can have one ear listening to the Minister while having a brief but urgent discussion with one of my hon. Friends.

Mr. Foulkes: I accept that, but I warn the hon. Gentleman against trying any pretzels, because that can be dangerous.

John Robertson: I do not know what my hon. Friend thinks about walking and chewing gum, but perhaps he opens his mouth only to change feet.

Mr. Foulkes: At least that has given the Opposition spokesmen some time in which to sort out their problem so that they can consider an important point that relates to how criminals could break up such sums in order to secure immunity from prosecution. A de minimis provision would give criminals the opportunity, especially if the level were £1,000, to secure that immunity from prosecution and reduce the likelihood of being reported on by those who handle their money for them.

Mr. Hawkins rose—

Mr. Foulkes: In a moment. It is better to give way at a logical point, such as the end of a sentence or paragraph. That makes what is said more understandable, and easier for Hansard, too—I like to look after the interests of the workers. The form of evasion that my hon. Friend the Member for Glasgow, Pollok and I describe is a genuine phenomenon known internationally as smurfing. I am sure that that will add to his knowledge. I have now finished my sentence.

Mr. Hawkins: I am grateful to the Minister. I believe that he had finished a different sentence from the one on which I intervened. The fact that after having said that he would not take my intervention he moved on to an entirely different subject in order to pass information on to the hon. Member for Glasgow, Pollok perhaps proves my point that he had paused for breath at the end of what I understood to be a phrase. I, too, want to look after the workers, especially at Hansard, to whom we all pay tribute.

The Minister said, ''Especially if the level were £1,000.'' I said in moving the amendment that we shall not go nap on a particular level: the Minister could introduce a Government amendment to make it £500 or £250. We simply want to establish the point that no one should be subject to huge burdens for an amount that is not regarded as serious. Worryingly, the Minister referred earlier to laundering in relation to minor offences such as shoplifting. Surely that is not what the Bill is targeted at.

Mr. Foulkes: I gave way to the hon. Gentleman at the right time, because his intervention brings me to my third point on why we reject the amendment.

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There is no doubt in our mind that even small—very small, in some cases—transactions can provide vital leads on money laundering. The National Criminal Intelligence Service has the necessary systems and analytical tools to make use of all the reports that it receives. The hon. Gentleman was worried about wasting the time of NCIS through the volume of reports that it receives. Our officials have discussed extensively with NCIS the possible increase in work load, and we are assured that it can cope with the increase. It considers that it would be far better for it to have the opportunity to dismiss a report as relating only to a minor crime than to risk losing an important money laundering lead. I hope that my argument has convinced Opposition Members.

Mr. Hawkins: It would be a convincing argument if we were being told by the industry that NCIS was, even given its current much lower work load than that envisaged by the Bill, responding to dismiss minor reports. The clear information that we received—I cannot stress how strongly it was put to us—is that NCIS is not responding. It is leaving the professionals in limbo.

Mr. Foulkes: That is the third time that the hon. Gentleman has raised that matter. When he referred to it the second time, I said that we would take it on board and consider it. I hope that he will not raise the matter a fourth time. If transactions or assets are suspect, it is right that they should be reported. More reporting does not mean that all reports will lead to a prosecution. The usual public interest considerations that we have discussed and the limitations on the resources of law enforcement and prosecution agencies will, of course, continue to guide decisions about when to initiate criminal proceedings. Nevertheless, reporting is vital.

The Government remain unconvinced by the calls for minimum thresholds, even if they are set at £1,000. It is difficult to justify introducing artificial limits to such offences. Such a provision would work against the policy that we are trying to achieve under the Bill. Moreover, it would make it easier for criminals to launder the proceeds of crime, a matter that my hon. Friends and I are worried about. It looks again as though the Opposition are trying to make it easier for criminals.

Amendment No. 521 is especially unpersuasive. It would introduce a minimum threshold into the tipping off offence under clause 325 with which we shall deal next week—or perhaps the week after. [Laughter.] I just remembered clause 324. The tipping off offence applies only if a person has found it necessary to report a suspect transaction. It cannot be right that anyone should jeopardise an investigation that may follow that disclosure. The tipping off offence already contains safeguards. It applies only to disclosures that are likely to prejudice an investigation and there is a defence if the person in question did not know or suspect that the disclosure would be prejudicial. In

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light of what I hope have been convincing arguments, I urge Opposition Members not to press the amendment.

Mr. Grieve: I agree with what the Minister said about amendment No. 521. It was an attempt to look across the board of part 7 at those areas where minimum provision should be provided, but he advanced a cogent argument why such matters should not apply in the case of the amendment. We shall not press it to a Division.

I turn now to the response to amendment No. 518. We want money laundering to be suppressed, but we are concerned about the administrative burden that may be placed on those who have to carry out the reporting system, which is backed up by a major criminal sanction of 14 years imprisonment on indictment. To that extent, it places a burden on individuals and organisations. While, I accept—well, the Minister made the point so I suppose that I must accept it—that he is looking at the Bill in the context of financial organisations, solicitors' firms and other ''City'' activities, the net has been cast wide and it applies beyond such organisations and the regulated financial sector.

At what point should an individual start to worry about the provenance of money that he is given? Clearly, in that context, the amount is relevant. If the Minister of State offers me £25,000 in cash as payment for an item, I might be alerted to something unusual, because as we have discussed, most people do not carry £25,000 in cash. If he offers me a £5 note for an item that is worth £5, that cash transaction is unlikely to excite any anxiety or suspicion.

4.30 pm

I simply say to the Minister that if we do not have a de minimis provision, a considerable burden will be placed on individuals in small-value transactions. Many such transactions are likely to be outside the regulated financial sector and may involve individuals who would not have read the part 7 or be aware of how to ring up NCIS. What publicity do the Government plan to give to the Bill to inform the wider public that they would be subject to severe criminal sanctions if they were not constantly on alert for these problems during transactions?

One of two things seems likely. In reality, notwithstanding the Minister's arguments about minimum provisions, NCIS will have neither the time nor the desire to lay its hands on the information, or certainly to bring criminal sanctions on those involved who did not comply in transactions that involved minuscule sums. That is the most likely outcome. The alternative outcome is that many people will be in serious jeopardy of criminal prosecution because they had not made declarations for transactions that may have seemed a little odd but were forgotten about because the sum was so trivial. Such triviality and the small quantity of the sum are clearly legitimate and compelling reasons why a person may dismiss suspicions.

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Mr. Paul Stinchcombe (Wellingborough): I appreciate the eloquent point that the hon. Gentleman makes. However, he is aware that the principal vice of the amendment is that it could be evaded so easily. The hon. Member for Surrey Heath acknowledged that Conservative spokesmen were aware of that when the amendment was tabled. Has the hon. Member for Beaconsfield thought of a solution to that problem? If he has, what is it, and if he has not and cannot, will he still support the amendment?

Mr. Grieve: There are several ways in which that could be addressed. The amount could be reduced, and I am bound to say that there is a point at which the Minister's objection ceases to be valid. If the minimum amount were £250, the evasion would have to be convoluted if it were to be realised.

A further alternative would be to draft an amendment that provided for a de minimis provision but provided that if transactions were linked and their aggregate total was more than £1,000, they should be declared.

I am prepared to accept such ideas, but I continue to be concerned about a blanket legal requirement that starts at a halfpenny. That is what we are talking about, because that is the smallest monetary consideration available in our currency—and it might be even smaller than that in some foreign currencies. The Minister must address that. He is aware of my anxiety about discretion. He has repeatedly told the Committee that provisions will be enforced with discretion, so nobody needs to worry.

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Prepared 17 January 2002