New Clause 11 - Requirement to register foreign activity arrangements

National Security Bill – in a Public Bill Committee am ar 18 Hydref 2022.

Danfonwch hysbysiad imi am ddadleuon fel hyn

“(1) A person (‘P’) who makes a foreign activity arrangement must register the arrangement with the Secretary of State before the end of the period of 10 days beginning with the day on which P makes the arrangement.

(2) A ‘foreign activity arrangement’ is an arrangement with a specified person pursuant to which the specified person directs P—

(a) to carry out activities in the United Kingdom, or

(b) to arrange for activities to be carried out in the United Kingdom.

(3) ‘Specified person’ means—

(a) a foreign power specified by the Secretary of State in regulations;

(b) a person, other than a foreign power, specified by the Secretary of State in regulations.

(4) The regulations may specify a person other than a foreign power only if—

(a) the person is not an individual, and

(b) the Secretary of State reasonably believes the person is controlled by a foreign power.

(5) A person is controlled by a foreign power if—

(a) the foreign power holds, directly or indirectly, more than 25% of the shares in the person,

(b) the foreign power holds, directly or indirectly, more than 25% of the voting rights in the person,

(c) the foreign power holds, directly or indirectly, the right to appoint or remove an officer of the person, or

(d) the foreign power has the right to direct or control the person’s activities (in whole or in part).

(6) In subsection (5) ‘officer’—

(a) in relation to a body corporate, means a director, member of the committee of management, chief executive, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity;

(b) in relation to a partnership, means a partner or person purporting to act as a partner;

(c) in relation to an unincorporated association other than a partnership, means a person who is concerned in the management or control of the association or purports to act in the capacity of a person so concerned.

(7) The Secretary of State may make regulations specifying a foreign power or a person other than a foreign power only if the Secretary of State considers it reasonably necessary to do so to protect the safety or interests of the United Kingdom.

(8) The requirement in subsection (1) does not apply to a foreign power.

(9) Regulations specifying a foreign power or a person other than a foreign power may provide for subsection (1) to apply, with modifications specified in the regulations, in relation to a foreign activity arrangement made with the specified person before the regulations come into force.

(10) A person who fails to comply with subsection (1) commits an offence if the person—

(a) knows, or

(b) ought reasonably to know,

that the arrangement in question is a foreign activity arrangement.”—

NC11 to NC28 require certain arrangements with, and activities of, foreign powers and foreign persons to be registered. They are intended to form a new Part 2A, referred to in explanatory statements as the registration scheme. This new clause requires registration of arrangements with specified persons to carry out activities in the UK.

Brought up, read the First time, and Question proposed (this day), That the clause be read a Second time.

Question again proposed.

Photo of James Gray James Gray Ceidwadwyr, North Wiltshire

I remind the Committee that with this we are discussing the following:

Government new clause 12—Offence of carrying out activities under an unregistered foreign activity arrangement.

Government new clause 13—Requirement to register activities of specified persons.

Photo of Maria Eagle Maria Eagle Llafur, Garston and Halewood

As we adjourned this morning, I was expressing concern about the complexity of the two-tier scheme embodied in the new clauses. I was suggesting that it might be more effective to have one tier that applied to all countries and a broad range of covert activity, rather than this two-tier arrangement, which is more difficult to understand and which presents more barriers to the Government of the day, and to the Minister in particular, in designating those who ought to be covered by the secondary tier, which the Minister referred to as the enhanced tier. It might be more sensible to have a simpler but more extensive scheme that does not require lots of extra Government activity and inter-departmental negotiations between the Security Minister and other Ministers who are looking at relations with foreign countries and companies through a different lens. That was my basic point.

It is difficult to understand why, unlike comparable schemes in Australia and the US scheme, there are two tiers, and why the registration of harmful activity outside of political influencing—some of which is more serious—applies only where the foreign power has been designated by the Government. If it is not designated, or while the Minister is desperately trying to persuade other bits of Whitehall that it ought to be, such activity could go on unimpeded by these arrangements and the necessity for registration. That will have a consequent, knock-on effect on the transparency that should be gained, which is supposed to be one of the purposes of the scheme. If we cannot get something registered because there is no agreement in Government, we will not get the additional transparency that is supposed to be one of the major benefits of the foreign influence registration scheme.

I am questioning the entire underpinning of the way in which the scheme has been designed. I am certainly not convinced that it is better than a simpler but broader arrangement. That was the essential point that I wanted to make. I do not wish to repeat every point that my right hon. Friend the Member for North Durham or the shadow Minister, my hon. Friend the Member for Halifax, have made. However, I believe that the scheme, as set out in the new clauses, is too complicated and could be simpler, and that, were it simpler, it would be more effective.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

I pay tribute to the hon. Member for Garston and Halewood and the right hon. Member for North Durham for the tone with which they have approached the debate. I appreciate their comments and those of the shadow Minister, who has made similar points. They have made them in the spirit of openness, proper debate and trying to improve what they see, correctly, as a Bill that will keep our country safe. I am grateful to them for that.

I will go through some of the points that have been made. First, the right hon. Member for North Durham asked about the purpose. Part of the objective of registering under the scheme is to highlight and to be clear. This is not a sanction. The very fact that a scheme exists for foreign companies that trade with British companies does not in any way mean that it is a sanction. The intention is to bring transparency to relationships that might otherwise lie hidden. It is intended not as a punishment, but merely to promote openness.

The requirement to register an arrangement within 10 days is made so that the person acting on behalf of the Government, or the individual, makes that clear at that point or within a reasonable period of time. I am happy to hear arguments for a slightly longer or less long period, but I think 10 days is a reasonable period for a registration to be made. Again, that is not supposed to be a sanction or an obstacle, but it is merely supposed to be a way of achieving transparency. It is not really supposed to be stopping the entire process, but merely supposed to be enabling people to know what is going on. If there was a requirement, and if it was a sanction, that would be different and the process would have to stop immediately. That is not what this is about.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

Briefly, because we have so much to get through.

Photo of Holly Lynch Holly Lynch Shadow Minister (Home Office)

Of course, and I am grateful. May I bring the Minister’s attention to an example that I have had a chance to look at, and which has broken today? Up to 30 former UK military pilots are thought to have gone to train members of China’s People’s Liberation Army. They have been offered lucrative packages of up to £237,000 for their expertise in training Chinese pilots. Actually, a Ministry of Defence spokesperson has said that they are attempting to disrupt that activity

“while the new National Security Bill will create additional tools to tackle contemporary security challenges—including this one.”

Just looking at that example of where presumably some of those involved in headhunting might need to register that activity—

Photo of Holly Lynch Holly Lynch Shadow Minister (Home Office)

There is a need to try to put a stop to some of this activity, and I just wonder what the relationship is between the visibility and the need to stop it.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

As the hon. Lady will know very well, I share her deep concern at this information, which was reported just this morning. First, may I say that there are already many different clauses in the Bill that are designed to make sure that individuals should not be co-operating with those who may be trying to steal secrets or to gain from secret information. It is possible, although I have not got the details of the case, that similar sorts of cases may be covered under other clauses in order to prevent the acquisition of information. The foreign agents element—the foreign influence element—would also come to play, but it is not the only element in the Bill that would come into play. It is absolutely correct that we do need the Bill in order to prevent such actions, which at the moment are more loosely defined, and therefore possible. The foreign influence element is not the only element, but I appreciate the spirit in which the hon. Lady has entered the discussion.

If I may, I will speed up a little.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

You are very welcome, Mr Gray.

Subsections (3) and (4) of new clause 11 make it clear that a specified person can be a foreign power or an entity that is not an individual. Parliamentary drafters use that terminology for the legislation, but detailed guidance will be prepared so that it is clear to the public and businesses who is included.

I will follow up on other questions in writing, if I may, because a whole load of questions were put before lunch and I think many of us have forgotten which elements they related to. I will therefore conclude my remarks.

Question put and agreed to.

New clause 11 accordingly read a Second time, and added to the Bill.