Proceeds of Crime Bill

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Mr. Davidson: The hon. Gentleman has been giving us the views of the Law Society and the British Bankers Association. What is the view of the police? I understand that the police forces of England, Wales and Scotland support the Government's proposals and disagree with those of the BBA.

Mr. Hawkins: As the hon. Gentleman knows, I have asked the Minister on several occasions to produce something more specific from NCIS, but as yet, answer came there none. I am also interested in the views of the police, especially those who are specialists in the field. I heard what the hon. Gentleman and the hon. Member for Glasgow, Anniesland said about the views of a senior officer in the Strathclyde police. That was a relevant contribution to the Committee. I am sure that if the police had a round table meeting with the BBA and the Law Society and those two organisations said, ''If this clause is left unamended the whole system will grind to a halt''—according to the people who advise us, it is bad enough already because NCIS does not

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respond when offences are reported, leaving transactions in limbo—

John Robertson: Will the hon. Gentleman give way?

The Chairman: Order. We are miles off the amendment now. Can we return to the negligence test?

Mr. Hawkins: This is relevant, Mr. McWilliam, because if the test is different the number of reports is different. That is why the test should be based on negligence rather than on reasonably suspecting.

John Robertson: The Minister and I have both pointed out that the Bill is being backed by drug enforcement agencies not only north but south of the border. Would the hon. Gentleman like to comment on that?

Mr. Hawkins rose—

The Chairman: Order. Not unless they are backing this particular point about the negligence test.

Ian Lucas (Wrexham): Will the hon. Gentleman give way?

Mr. Hawkins: In a minute. I repeat the answer that I gave the hon. Member for Glasgow, Pollok: I would like to see a round table conference on whether the system will be unwieldy, involving the British Bankers Association and the experts of the Law Society of England and Wales, who believe that this will not work, and the drug agencies. If the hon. Gentleman has something in writing from the drug enforcement people that touches on that point, which he can share with the Committee, I will be interested to see it.

Ian Lucas: Is it not the case that were the Opposition amendments to be successful, they would have no impact on the number of cases reported, because subsection (2)(b) refers to those who should report having

    ''reasonable grounds for knowing or suspecting''?

If they do not know, they will not report, and there will therefore be no increase in the number of cases reported.

Mr. Hawkins: I do not think that hon. Gentleman's logic is right, but I will not take up the Committee's time by going through the semantics. His interpretation is not mine. I will not labour the point, but will be interested to hear what the Minister thinks is a reasonable excuse.

Stephen Hesford: I want to finish my earlier lengthy intervention. I gave two examples, and I notice that the hon. Gentleman did not demur from them. A third example of a reasonable excuse could be that the employee was not trained sufficiently, which would not have been his responsibility. The Minister said that because of other regulations it is incumbent on a company to train its staff properly, and that it will commit an offence if it does not; those elements should run side by side. The fourth legitimate excuse could be that the compliance with the requirement for training that the industry has set up and which is addressed in subsection (6), is not up to the job at the time.

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Mr. Grieve: I am interested in the hon. Gentleman's remarks. I can understand his argument in respect of illness, but it strikes me that the reasonable excuse that he now offers is ignorance of the law. I am a little startled to discover that he thinks that that could constitute a defence.

Stephen Hesford: The hon. Gentleman entirely misunderstands. My argument is not that anyone who falls under the four categories that I have outlined would be ignorant of the law. They would know the law, but because of specific circumstances they could be absolved in terms of what would otherwise be an objective test. That is not the same as being ignorant. Such people may well know what should happen.

The Chairman: Order. May I direct the hon. Gentleman's mind to subsection (6)? He seems to be arguing about that, rather than the subsection that we are debating.

Stephen Hesford: Subsection (6) addresses itself to subsection (2)(a) and (b). With respect, unless we discuss the failure to disclose as a whole, we will be discussing matters in a vacuum, and we will never fully expand the point.

The Chairman: Order. The hon. Gentleman misunderstands me. The Committee has the opportunity to discuss subsection (6) under other amendments.

Mr. Grieve: On a point of order, Mr. McWilliam. It must surely be in order to allow discussion of parts of a clause that are directly related to the amendment in question. The issue that faces the Committee is whether to remove the objective test and keep only the subjective test in respect of guilt. If other clauses merit being looked at, because they temper the harshness of clause 324, that must be relevant to the Committee's consideration of this amendment.

The Chairman: It is in order only in a clause stand part debate. It is not in order under such a narrow group of amendments. The Committee's debate has ranged extremely widely, and I direct it to the amendment. The debate is on negligence, the test and nothing more.

Stephen Hesford: In that case, I shall sit down.

Vera Baird (Redcar): Much of what I was going to say has already been said. We are not discussing the watering down of the legislation. Certainly, Labour Members are trying to assist the Minister, who this morning said openly that he was prepared to listen on the question of striking the right balance, and to deal with the question of whether it is necessary to criminalise the innocent in order to regulate the financial sector efficiently against money laundering.

Amendment No. 525—I shall give way if I misunderstand it, and it can be explained to me—seems to make the situation no better. Under it, the condition would be that the putative defendant has reasonable grounds for reasonably believing that another person is engaged in money laundering, but it still does not require him to believe it.

Mr. Grieve: I rather concur with the hon. Lady, which is one of the reasons why I have not developed my arguments a great deal.

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Vera Baird: Then we can put that aside and consider the real point: whether it is necessary to criminalise the innocent in order to regulate the finance industry. If we are not careful, that will be the result. My contribution is not intended as opposition—I want my hon. Friend the Minister to reconsider certain points.

The Minister said that it was necessary to make the City diligent in identifying and reporting money laundering. He made the point that the provision is applicable only to the regulated sector, which, he says, is aiming it at the right people. The fact is that the whole of the clause is applicable only to the regulated sector, which is therefore the victim or target of a separate offence that does not apply to anyone else. Subsection (2)(a) also applies only to the regulated sector.

To disclose money laundering, if one knows or suspects that it is taking place, is a defence for anybody under clauses 321 to 323, but if one does not disclose, it does not make one criminally offending under any of those clauses. If one is a member of the regulated sector, however, and one does not disclose, one becomes a criminal if one knows or suspects that money laundering is taking place. An extra burden on the regulated sector is implicit in the mere existence of clause 324. I question whether it is necessary to take that further.

The hon. Member for Orkney and Shetland made the point that the regulated sector—the financial sector—has extra rights and privileges, and should therefore have extra burdens, which are set out in subsection (2)(a). A person must merely suspect in the slightest way—we heard many contributions, mainly from the Opposition, about how low a test suspicion is—and it is only that test that must be passed before a criminal offence is committed if there is no immediate disclosure. That is quite strong.

The state of mind—although it is not fair to call it that—countenanced in subsection (2)(b) is that someone is guilty of not disclosing money laundering even if he does not know or suspect that it is happening. He does not need to have the slightest suspicion and may be utterly unaware of the laundering, but he would still be guilty of not disclosing what he does not know and does not suspect. He is innocent.

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That is the purpose of the subsection. If there were sufficient grounds for prosecuting someone on the suspicion that he had been collaborating and knew or suspected, he would no longer be covered by that subsection but by another one. In other words, the deliberate intention behind the subsection is to criminalise the innocent. A person need not necessarily have known or suspected, turned a blind eye or been naive about something about which he should have been sceptical. Even if he had not collaborated and was unaware that anything had gone wrong, he could be found guilty.

Mr. Davidson: Does my hon. Friend recall my point about Sir Michael Richardson, one of whose alleged friends said in The Daily Telegraph article:

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    ''I think you can call into question his judgment''?

Could not that be a defence for almost anything? The question then becomes one of judgment—it is not even about defending the innocent. If something is open to judgment, people may be handed a ''get out of jail free'' card.

 
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