Asked by
To ask Her Majesty’s Government what plans they have, if any, to
commission an independent assessment of the scale of money
laundering in the United Kingdom.
The Minister of State, Cabinet Office and the Treasury () (Con)
My Lords, the UK money laundering regulations require the
Government to make an assessment of the UK’s money laundering and
terrorist financing risks and to keep this assessment up to date.
The Government accordingly published a national risk assessment
in 2015, 2017 and 2020. Assessments detailing specific threats
are published by UK law enforcement more regularly, including by
the National Crime Agency’s National Assessment
Centre and the National Economic Crime Centre.
(Lab)
I thank the Minister for his Answer, but is he not curious about
the effects of transnational kleptocracy by British professional
service providers such as HSBC and Mishcon de Reya, which enable
crooked elites to launder their money and reputations? Would he
condemn, as does the recent Chatham House report, the lawyers and
PR agents who make quasi-libel defamation cases against
journalists and researchers researching money laundering and then
go on to deter the ill-resourced regulators, who can be bought
off, as in the recent Mishcon case?
(Con)
I am sure the noble Lord will be aware that a number of very
substantial fines have been levied for breaching money laundering
regulations over the last few years. In 2020, Goldman Sachs was
fined £48 million; in 2019, Standard Chartered was fined £102
million; and, even in the last few weeks, NatWest was handed a
fine of £264 million. This just emphasises our commitment to
dealing with this whole area.
(Con)
My Lords, having had the dubious privilege of being one of those
who helped to draft the anti-money laundering directives in
Brussels, and thereby finding himself described by friends as an
expert in money laundering, may I enquire about the word
“proportional”, which appears in the directive? Does my noble
friend feel that that word is being properly applied by our
financial institutions to small investors and those who will
never be engaged in money laundering? Does he think that that is
balanced and fair and that we have the right approach?
(Con)
I would certainly defer to my noble friend as someone who is an
expert in this area, which I am not. It is extremely difficult to
get the right balance in these things, because what one person
would consider an intrusion, another would consider a protection.
We have to remain alert and sensitive to the different forces,
but what is most important is that we have a coherent system
which is clamping down on an extremely complex and fast-evolving
crime.
My Lords, in last year’s parliamentary debate on the Church
Action for Tax Justice report Tax for the Common Good, the
Minister assured us that progress was being made on reducing
money laundering and financial fraud in our British Overseas
Territories and Crown dependencies. Would he be able to update
the House on this? If he cannot do so now, would he please write
to me with information on the progress we are making?
(Con)
It is important to remind the House that the overseas territories
are independent entities and that we cannot just force them to
comply with our own regulations. But we have an ongoing dialogue
with them. For example, we have a very useful exchange of
information through the exchange of notes arrangements, and they
have agreed to introduce publicly accessible registers of
companies’ beneficial ownership. The discussions are very much
ongoing and I respect the right reverend Prelate’s concern.
(CB)
My Lords, at the anti-corruption summit in 2016, the Government
committed to producing a register of overseas owners of British
properties. In 2018, they produced a draft Bill on that which has
still to become law. Could the Government say whether they are in
fact committed to stopping this sort of overseas activity in the
UK?
(Con)
My Lords, I can assure the House that we are absolutely committed
to stopping that. I accept that the introduction of the Bill is
taking too long, but active discussions are going on at the
moment about a new economic crime Bill and I hope that we might
see its introduction within the next few months.
(Lab)
My Lords, the Minister’s colleague, the noble Viscount, Lord
Younger, said during our proceedings on the NICs Bill:
“In the last three years, we have recovered over £550 million
from the proceeds of crime, charged over 100 people with
money-laundering offences, and seen over 75 people convicted for
money laundering.”—[Official Report, 10/1/22; col. GC 113.]
That is a pathetic figure—or at least it feels like one. In his
original Answer, the Minister indicated that assessments had been
made over three recent years. What he failed to do was tell us
what the answer was. Could he provide the answer so that we can
judge the success so far and see whether the right resources and
energy are being devoted to this issue?
(Con)
My Lords, if we were to go the very top-down figures, which are
ultimately the most important, I would look at the tax gap, which
we have been very successful in closing over a number of years.
In 2005-06, the gap was 7.5%; in the last year for which figures
were available, 2019-20, it was down to 5.3%. That is of course
against the enormous headwinds of the build-up of hot money
around the world. I would therefore be more optimistic and say
that we are making good progress.
The Lord Privy Seal () (Con)
My Lords, it is the turn of the Liberal Democrats. The noble
Lord, of Cheltenham, wishes to speak
virtually. I think this is a convenient point to call him.
of Cheltenham (LD) [V]
My Lords, the Royal United Services Institute suggests that the
scale of money laundering in the UK is “too big to measure”.
Transparency International has had a stab at it and says that the
problem may be causing £325 billion-worth of harm to the UK
economy each year. Why has the UK become such a magnet for this
illegal activity, which damages the vital financial services
sector and our reputation as a safe place to do business?
(Con)
My Lords, as I am sure the noble Lord will be aware, the City of
London is one of the largest financial centres in the world and
therefore the flows of money going through our economy,
particularly in the City, are enormous. However, we lead the
world in our attempts to reduce bad activity. I refer the noble
Lord to the Economic Crime Plan, which lists some 48 action
points to tackle the whole spectrum of money laundering and
financial crime. We are in good shape in implementing those, and
we are committed to an economic crime plan 2.0 that will be
announced this autumn.
(Con)
My Lords, to take us back to the question on resources, there is
some evidence that where banks refer cases to the police, such
cases are not high on their agenda. Do the police have sufficient
resources to tackle this crime and to investigate it
thoroughly?
(Con)
My Lords, we have the National Crime
Agency as the main crimefighting force in
anti-money laundering. It is an extremely effective organisation,
and it is well funded. Of course, one could always say that more
money is needed, but I can assure my noble friend that we believe
that we have adequate resources.
(Lab)
The Minister has mentioned some fines in respect of a limited
number of banks, but much money laundering is in respect of
property transactions, particularly in London. Since the passing
of the Sanctions and Anti-Money Laundering Act 2018, how many
prosecutions have there been of professional people who
facilitate money laundering: the estate agents, the solicitors
and others?
(Con)
My Lords, more than 97,000 organisations are monitored for money
laundering in this country and some 54 anti-money laundering
inquiries are open with the FCA at the moment.
(Lab)
My Lords, the Minister has referred to the work of the Assets
Recovery Agency. Paramilitary organisations have undertaken
considerable money laundering over many years throughout the UK.
Can the Minister provide us with a detailed assessment, including
figures, of the amounts that have been laundered by paramilitary
organisations? I am thinking in particular of Northern Ireland,
where it has had an insidious impact on society.
(Con)
I share the noble Baroness’s concern about money laundering
getting into the hands of serious organised crime groups, but we
are very much aware of such concerns. I do not think that one can
put a figure on it, because, if we knew what it was, we would be
able to stop it. We have created a large umbrella structure to
oversee all these organisations. It is overseen by the Chancellor
and the Home Secretary. Underneath that sit a number of
organisations; for example, the Office for Professional Body
Anti-Money Laundering Supervision. A whole range of such agencies
are now working and sharing intelligence. I believe that we are
getting better all the time.
