Clause 322 - Arrangements

Proceeds of Crime Bill – in a Public Bill Committee am ar 22 Ionawr 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Amendment proposed [17 January]: No. 518, in page 186, line 39, at end add—

'(d) the amount of money involved in the arrangement or the value of the property does not exceed £1,000'.—[Mr. Hawkins.]

Question again proposed, That the amendment be made.

Photo of Mr Bill O'Brien Mr Bill O'Brien Llafur, Normanton 10:30, 22 Ionawr 2002

I remind the Committee that with this we are taking the following amendments: No. 519, in clause 323, page 187, line 14, at end insert—

'(e) the value of the property involved does not exceed £1,000'.

No. 520, in clause 324, page 187, line 41, at end insert—

'(c) the amount of money involved does not exceed £1,000'.

No. 521, in clause 325, page 188, line 40, at end insert—

'(d) the disclosure relates to money or property not exceeding the value of £1,000'.

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

At the end of our previous sitting we were discussing the introduction of de minimis provisions. The Minister of State, Scotland Office, had just suggested that the amendment was completely at odds with the philosophy of the Bill.

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

I hear the Under-Secretary agreeing with his hon. Friend. I am indebted to those in the Law Society of England and Wales who have carried out a great deal of work in the few days since our previous debate and have sent further information to my hon. Friend the Member for Beaconsfield (Mr. Grieve) and me. It turns out that, far from what the Minister of State so confidently asserted, there are already de minimis provisions that he failed to mention. I am sure that that was merely an error on his part, but let us consider the Money Laundering Regulations 1993 and the second European money laundering directive. Labour Ministers are keen on European directives now. I remember when the Labour party was the most Euro-sceptic party of them all, but it has done a 180 degrees volte-face since those days.

The Minister of State, Scotland Office (Mr. George Foulkes) rose—

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

I shall give way to the Minister later; no doubt he will wish to defend his European honour. I imagine that he will tell me that he was always pro-European, but I make an honourable exception about such matters in the case of the hon. Gentleman. In the

days when his party was Euro-sceptic he used to be unorthodox, but now his party has come round to his traditional way of thinking.

Under the Money Laundering Regulations 1993, identity must be verified for the following one-off transactions: first, if

''payment is to be made by or to the applicant for business of the amount of ecu (euro) 15,000 or more'',

which under the regulations was roughly equivalent to £9,300. I am not sure whether the euro has fallen in value yet further so that that exchange rate is out of date. Perhaps I should not intrude on private grief, given that I read in my daily paper that the hon. Member for Glasgow, Pollok (Mr. Davidson) was leading the charge against his own Government on European matters. Unaccountably, he is not in Committee this morning. I am not sure whether the Whip has had anything to do with his absence.

Secondly, under the Money Laundering Regulations identity must be verified if it appears, at the outset, to a person handling any of the transactions:

''(i) that the transactions are linked, and

(ii) that the total amount in respect of all of the transactions, which is payable by or to the applicant for business is ecu 15,000 or more; or

(b) at any later stage, it comes to the attention of such a person that paragraphs (i) or (ii) of sub-paragraph (a) above are satisfied.''

I am sure that to those listening to me read them out, such provision are as clear as mud, but I would be happy to copy them for members of the Committee. The consequence of the requirements is that identity does not need to be verified when the amount involved is £9,300 or less in a one-off transaction or linked one-off transactions. Even though the Minister failed to mention it, we have had such de minimis provisions, and those in Europe to whom he refers so often have been happy with them. The provisions under the second money laundering directive are similar, and they were finalised as recently as October 2001.

We have picked a figure of £1,000 and Ministers have said that they will not enter into a Dutch auction on the appropriate level of the limit. We said that we would be happy if it was £500, or even £250. Ministers rejected those figures out of hand. Now we discover that in October 2001, the Government concurred with a second money laundering directive that had much higher de minimis thresholds. In the view of the Law Society of England and Wales, and in that of my hon. Friend the Member for Beaconsfield and myself, a combination of the provisions that the Government have already agreed to in Europe and what we have suggested would entirely address the Government's worries.

Although we have had a good and thorough debate, we may need to return to such matters. I have received from the Law Society some forms from the National Criminal Intelligence Service, which I will copy to any interested members of the Committee. I have not seen the forms before. They are blank and do not contain any confidential information, but they give guidelines. They are printed on the headed notepaper of the economic crime unit of NCIS, and at the top is the

name of Mr. Abbott, QPM, BA (Hons), who is the director general of NCIS. The form provides notes on how disclosures are made, and there are blank spaces for all the details of the main subject, such as account details. Now that we know something about how NCIS operates, Ministers may be forced to provide more thorough responses to some of the worries that we have expressed.

When we come to amendment No. 520—the crucial part of the de minimis provisions—I shall press it to a Division, so we shall not press the lead amendment, No. 518, now. I am willing to withdraw that amendment, but only on the basis that we are sticking to our arguments in favour of the whole group. Although it is not the first amendment in terms of the order of the Bill, we believe that amendment No. 520 is the most appropriate one on which to divide the Committee. I shall not press the earlier amendments in the group, but I want to make it clear that I will seek a Division when we come to clause 324, to which amendment No. 520 refers.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

Before you ask the Committee to give the hon. Gentleman leave to withdraw amendment No. 518, Mr. O'Brien, may I say that I thought that I had made some very convincing arguments last time we met—[Hon. Members: ''Hear, hear.''].

None of those arguments has been refuted by the hon. Gentleman. He spoke only about the fax that he has received the Law Society of England and Wales. However, that deals with money laundering regulations, which cover different grounds. The Bill is about criminalising people who are carrying out money laundering, whereas the regulations deal with procedures and good practice to avoid money laundering. That is an entirely different matter. De minimis provisions in regulations are for identification requirements. We could not ask for identification and record retention in an infinite number of tiny transactions. That would be ridiculous.

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

I did not think that there was any need to repeat all the arguments that we proposed at our previous sitting. Does the Minister not understand that the fact that in another area the Government have agreed to de minimis limits that also relate to reporting, reinforces our point? Although he says that those cover different ground, the concept of de minimis and the reasons for it are germane in both cases.

Photo of Mr George Foulkes Mr George Foulkes Minister of State, Scottish Office, Minister of State (Scotland Office)

The hon. Gentleman may think that, but I do not believe that a de minimis provision would be germane. He is talking about something different from cases in which we report that we suspect that a crime has occurred. Regulations require banks to report suspicious transactions of any size. He has mixed up the issue. The Law Society of England and Wales has taken up an entirely different matter. That is an extra reason why the hon. Gentleman is wise to suggest that he will withdraw his amendment. I think that he would be wise not to press amendment No. 520, either.

Photo of Mr Nick Hawkins Mr Nick Hawkins Ceidwadwyr, Surrey Heath

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 322 ordered to stand part of the Bill.