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Caroline Flint: I take on board the hon. Gentleman's comments that if we are to be part of a reciprocal procedure, we want to ensure that other people abide by the same rules. That is fair and just. The Bill and the protocol from which it has come will ensure that that happens.
The purpose of the amendment is to restrict the application of the provisions on customer information orders to countries which have implemented the protocol, but that is unnecessary because to make requests under the protocol, a country must have completed the necessary implementation procedures and notified the Council of the European Union accordingly. Until that time, they cannot make requests citing the protocol's provisions, nor do we have to assist them. The protocol creates the obligation to comply with requests and the arrangements are reciprocal, so the amendment is redundant. However, this debate allows us to discuss how important it is that all countries participate and apply equal standards.
Let me offer a little more detail. Clause 51(2) allows countries to be defined as participating countries. That mechanism allows different countries to be designated as participating countries for the purposes of different provisions of the Bill. A country participating in one provision will not automatically be a participating country for all the relevant provisions in part 1. That means that we can restrict the applications of some provisions of the Bill.
The provisions of chapter 4, to which the amendments relate, enable us to request and provide assistance in identifying and monitoring bank accounts. These forms of assistance are regulated for
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the first time in the protocol to the MLA convention. We are under an obligation to provide those forms of assistance only to countries that are party to the protocol, and we have chosen as a matter of policy to restrict the application of chapter 4 to designated countries, rather than to give it general application. That restriction contrasts with our policy more generally on the provision of mutual legal assistance, whereby we do not require the existence of reciprocal arrangements as a condition for assisting. However, these new types of assistance are new and specialised and the amount of work that will be involved in executing such requests will be fairly substantial. We did not consider it appropriate to give the provisions general application when many countries will not be in a position to reciprocate.
Although we will initially apply the provisions only in respect of EU member states that have implemented the protocol, it is possible that in future the provisions could be extended to cover countries beyond the EU. A definition restricting applications to EU member states only would not be appropriate. We have previously given Norway and Iceland as examples, as we are aware that they are interested in fully participating in the protocol and we would be able to extend the provisions to them on the basis of their participation in Schengen. It is possible that there might in future be benefit in extending other mutual legal assistance agreements to cover such matters, but participation of countries outside the EU would be achieved only following consideration of an order by both Houses once such an agreement had been reached.
I hope that that reassures the hon. Member for Surrey Heath that we feel that the protocol has sufficient weight to ensure that we would have the right to turn down requests for information from anybody who did not meet the full scope of its requirements.
Mr. Hawkins: I am pleased that we moved this amendment, because it has been helpful to hear what the Minister has said, and to have that on the record. I am not entirely reassured by her opening up the prospect of extending the categories beyond the EU, but I understand what she says about needing to help countries such as Norway and Iceland. I am sure that, in the light of the Minister's reassurances that are now on the record, great care will be taken before this operation is extended more widely—I certainly hope that that will be the case. It is helpful to have an explanation—stated by the Minister on the record—that there is some protection in the protocol. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 ordered to stand part of the Bill.
Clause 33
Making, varying or discharging customer information orders
9.45 am
Mr. Hawkins: I beg to move amendment No. 89, in
clause 33, page 20, line 3, leave out paragraph (a).
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The Chairman: With this it will be convenient to discuss the following:
Amendment No. 91, in
clause 34, page 20, line 19, at end insert 'within the specified period'.
Amendment No. 96, in
clause 38, page 22, line 33, leave out paragraph (a).
Mr. Hawkins: The amendments in this group run together. Amendment No. 96 to clause 38 effectively makes the same amendment for Scotland.
Clause 33(3)(a) is too wide. We should never have a situation in which absolutely every financial institution can be included under the draconian measures of the clause. Amendment No. 91 would introduce a time limit, which would be a useful protection.
We can see the logic of stating in subsection (3)(b) that the application may specify a particular description or descriptions of financial institutions, and that, in subsection 3(c), a particular financial institution or institutions may be specified. However, to state that an application may specify all financial institution reinforces the point on which my hon. Friend the Member for Leominster was helpfully supporting me earlier. We are talking about onerous burdens in terms of the amount of work that will be created. Surely, it must be possible, when an application is being made, that those applying should be able to specify at the very least either a particular group or a description of financial institutions. The clause should not apply to the entire financial sector, as that is too wide.
The phrase ''financial institution'' is defined widely for the purposes of the Bill. We know that there has been huge expansion in recent years because of the success of the City of London and banking in the UK; we are one of the world's great financial centres. However, it is far too wide to allow an application to be made, albeit on worthy grounds, without the other side being heard by a judge in chambers—in other words, ex parte—which states that every financial institution in the whole of the UK must provide particular information. Although the amendment is small, it reflects a matter of concern.
I know from the people with whom I worked when I was group legal adviser for a large financial institution—I used to have meetings with those on the legal committee of the British Bankers Association—that this kind of all-embracing legislation causes problems. I hope that we will have the opportunity to cut down the breadth of the application and put the onus on those who are applying for the order. They should be able to specify either a financial institution or a group, and not the whole financial sector.
Mr. Heath: I have great deal of sympathy with the hon. Gentleman's comments. It worries me that the classification of a request to all financial institutions has two effects: it creates a great deal of work for many people at inordinate cost; and it renders of less value the information that comes back.
One of the facts that we know about financial investigation is that the amount of information that is coming in, mainly to the National Criminal
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Intelligence Service, is vastly in excess of what it is successfully able to work its way through to good effect. Unless we shall have a doubling of the resources that are available—I literally mean doubling—to deal with such matters, I am not sure that useful information will be gained by an all-embracing request that covers every financial institution.
If the intelligence on which the request were based were so weak as not to narrow the scope from all financial institutions to a class of financial institutions, it seems that that intelligence would not pass the original test. It would not be a genuine request for information to enable an investigation to proceed. It would become much closer to a fishing expedition that seeks evidence when none is available. That worries me, too. I hope that the hon. Gentleman's words will be listened to with some care. No one wants to reduce the efficacy of the process. My argument is that the provision would increase the efficacy of the process by focusing it on certain classes of financial institutions.
We should not discount the implications for the industry, nor the investigations and work that will be required to comply with requests. If a customer information request is aimed at all financial institutions and one of them does not reply, it will be guilty of an offence under the Bill. That is inappropriate. Whether or not the institution has valuable information, it will be guilty of an offence. I do not want to overburden either the industry or investigating organisations in such a way that they cannot do the job that we want them to do effectively and at a reasonable cost. I hope that the hon. Lady will seriously consider the amendments.
Caroline Flint: We have had a good debate about customer information orders, not wasting time and not being frivolous. We discussed how good it is to be clear about the protocol and how it applies to all the countries taking part in accordance with the Secretary of State when making a decision to proceed. It is important to remind the Committee of that debate, because no one wants a situation in which resources are used unwisely, as the hon. Member for Somerton and Frome said. That will put a burden on those who are investigating, because they could not do anything with the information with which they were provided. There may be an occasion when an order has to specify all financial institutions. That would not happen in each case, but it would be given considerable consideration. We want the provision to be in the Bill, because there may be occasions when it is needed.
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