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Lord Filkin moved Amendment No. 110:



"In relation to Scotland, a power of attorney includes a factory and commission."

On Question, amendment agreed to.

Clause 43, as amended, agreed to.

Clause 44 [Monitoring banking transactions]:

[Amendments Nos. 111 to 112A not moved.]

Clause 44 agreed to.

Clause 45 agreed to.

5 p.m.

Viscount Bridgeman moved Amendment No. 112B:


    After Clause 45, insert the following new clause—


"ANNUAL REPORT ON EFFECTS OF REQUESTS FOR BANKING INFORMATION
(1) The Secretary of State shall publish each year a report on the effects of requests for banking information introduced under this Act.

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(2) In each report under subsection (1) the Secretary of State shall include—
(a) a cost assessment of complying with a request for information,
(b) the frequency of requests from participating countries, and
(c) the time taken to comply with requests."

The noble Viscount said: The amendment could be described as a good housekeeping amendment, inspired by the British Bankers' Association. It would require an annual report, which would evaluate how much the banking provisions of the Bill are used. In particular, it would be useful to review the unit costs of handling individual cases or the number of inquiries received by the UK under the protocol, if it proves to be significantly greater than estimated.

Consideration should be given to simplifying the procedures for responding to such inquiries so as to reduce the average time that must be spent on handling an inquiry. That might be particularly important for small banks with more limited resources—a point that I have sought to make before. I must also add that the BBA and its member banks hope that they will be invited to participate in any future discussion of the procedures for handling requests, once an order has been made. I beg to move.

Lord Renton: Whether or not one agrees with the detail—and I do—this is an important amendment. The Bill breaks new ground internationally and will affect people's rights all over the world—potentially, at any rate. We should know, from time to time, what progress has been made in implementing it.

The new clause merely asks for details of the effects of requests for banking information. That is not a big demand, but it is important, and I would have hoped that the Government would be sympathetic.

Lord Monson: On this occasion, I am happy to agree with the noble Viscount. As the noble Lord, Lord Renton, said, we are in uncharted waters. Parliamentarians and the public have a right to know the cost to the taxpayer of complying with the requests and to know how often such requests are made.

Lord Filkin: Clearly, something has gone wrong with our procedures. Normally, when we discuss annual reports, it is my noble friend Lord Bassam of Brighton who responds. That apart, I shall address the meat of the issue.

The Opposition proposed a similar arrangement, with the addition of having an independent person to make the report, in respect of the new arrangements for orders freezing evidence. We understand the reasons behind the proposal; the arrangements for providing and receiving banking information to and from our EU partners are new, and it is right that Parliament should have a continuing interest in their use and operational experience, as several noble Lords have said.

As with the proposal relating to freezing orders, we do not see a need for a statutory requirement for a report. It will be open to Members of the House of

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Lords and MPs to obtain information on the working of the new arrangements by tabling Parliamentary Questions. That will be a proper and existing method of scrutiny for the working of the provisions. In other words, I agree with the noble Lord, Lord Renton, that it is right that we should know, from time to time, how the measures are progressing. Parliamentary Questions provide a good means of doing that. However, imposing for time ever onwards a requirement for an annual report would be disproportionate and a potential waste of resources.

Noble Lords have referred to the cost of complying with the requests. It might help if I gave some further information about our estimate of that. As part of the process of planning implementation of the protocol, the Home Office published a regulatory impact assessment that considered the likely cost of complying with the requests. It estimated that the cost of complying could be between 1.26 million and 3.77 million a year for the banking industry, depending on the number of requests received.

Our estimate of the number of requests that we might receive was based on the estimates made for the Proceeds of Crime Act 2002 and on the volume of mutual legal assistance requests that we already receive. We considered that, under the protocol, we could expect to receive between 250 and 350 requests a year from our EU partners in respect of customer information orders and account monitoring orders. A high proportion of those requests will relate to money laundering, the costs of which are already included in the regulatory impact assessment for the Proceeds of Crime Act. The extra cost referred to above related to the estimated number of requests that would relate to other forms of crime.

For customer information orders, it was estimated that we might receive between 50 and 100 additional serious crime requests. For account monitoring orders, we estimated between 50 and 75 additional requests. In both cases, they are annual figures. All that is set out in detail in the regulatory impact assessment, available on the Home Office's website.

I shall say a little about how the process will be administered in practice. I shall respond to the noble Viscount, who asked whether the British Bankers' Association would be invited to participate in handling arrangements. We will, of course, consult the association and other relevant bodies about the handling of such matters.

All requests will be received centrally by the UK Central Authority, which will establish whether the request meets the necessary criteria set out in the Bill and the protocol. If it does, the authority will forward the request to the National Criminal Intelligence Service. NCIS will undertake certain intelligence checks to see whether accounts exist and will then apply to a court for an order. A customer information order will be directed at a number of institutions. It might involve one or two institutions, to obtain details of accounts identified by the initial checks, or a larger number, if that is appropriate to the case. In the case

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of account monitoring orders, the account will already have been identified, so the order will be directed at only one institution.

As noble Lords will, no doubt, point out, regulatory impact assessments are an honest endeavour to make the best assessment that one can of volume, scope and burden. I have no doubt that practice will show some variation from those figures, upwards or downwards. So, it is right and proper for Members of the House to be able to make inquiries after a year or two about how the process is working. Parliamentary Questions are an adequate means of doing so and, if necessary, ensuring that the Government are brought to account for the operation of the measures.

Viscount Bridgeman: We are, of course, mindful that unnecessary expense must not be incurred in an exercise such as that outlined in the amendment. Nevertheless, I shall study carefully the Minister's reply. Transparency and reporting to the public are desirable, and we may revisit the issue on Report. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 46 [Interpretation of Chapter 4]:

Lord Filkin moved Amendment No. 113:


    Page 26, line 11, at end insert "and


"senior customs officer" means a customs officer who is not below the grade designated by the Commissioners of Customs and Excise as equivalent to that rank."

On Question, amendment agreed to.

Viscount Bridgeman moved Amendment No. 113A:


    Page 26, line 14, leave out paragraph (a) and insert—


"(a) an offence which carries a prison term of 10 years or more, or"

The noble Viscount said: I shall speak also to Amendments Nos. 113B and 113C.

This is a probing amendment. "Serious criminal conduct" is defined as an offence under the 2001 protocol or as an offence specified in an order made by the Secretary of State. The matter was the subject of a previous amendment. Which other countries follow the guidelines? Have the guidelines ever been or could they be amended? Would it not be better to list them in the Bill, for the sake of clarity?

With regard to the other two amendments, it should be well known that we oppose the idea that the Secretary of State should have more power. These standard amendments would ensure that new offences added to the list were properly debated by Parliament and would make similar provision for Scotland. I beg to move.

Lord Goodhart: Although I am reluctant to support Amendment No. 113A, I think that there is much to be said for making either Amendment No. 113B or 113C. Given the intrusive nature of the customer information orders, it is important that we make sure that their use is limited to genuinely serious offences.

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Any extension of the order using subsection (3)(b) should be subject not to the negative resolution procedure but to affirmative resolution.


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