Sanctions and Anti-Money Laundering Bill 2017-19 – Committee Stage report

The Sanctions and Anti-Money Laundering Bill 2017-19 Committee Stage took place on 27 February, and on 1 and 6 March 2018. The Government amended the bill seven times.

Amendments made

Government Amendment 4 reinserted the provision for sanctions to be enforced by criminal proceedings, with offences and maximum jail terms set out in regulations. This was necessary after the Government was defeated on the issue in the House of Lords.

Government amendment 3 was consequential on the amendments made in the Lords to set out in more detail the purposes for which sanctions can be made.

The Committee also approved a Government Amendment 7, reinstating the power to enforce money laundering and terrorist financing regulations by criminal proceedings. The power to create offences for this purpose had, like that for sanctions, been removed by the House of Lords. ​

Government Amendment 10 specified that any offences created by regulations under Clause 43 must only be for the purposes of enforcing anti-money laundering regulations.

Government Amendment 11 requiring Ministers to report to Parliament specifying money laundering offences and giving reasons for any terms of imprisonment that apply to them.

Government Amendment 8 set out that regulations under Clause 1 can only amend the definition of “terrorist financing” in the Bill to add a reference to an offence where the purpose of the regulations containing the offence is:

• to comply with a UN or other international obligation, or
• for a purpose related to the prevention of terrorism.

Government New Clause 3 requires that where regulations under Clause 1 are made which include offences, a report specifying the offences and giving reasons for any terms of imprisonment that apply to them must be laid before Parliament.

Amendments negatived

The Committee voted on several Opposition amendments but none of them was agreed.

One would have prevented sanctions being imposed on recognised refugees who own or operate aircraft.

Another would have enabled sanctions regulations to be made aiming to prevent, or in response to, a gross human rights abuse or violation. This would have elaborated further on the changes made in the House of Lords to define the purpose of sanctions as being to encourage compliance with international humanitarian law and prevent human rights abuses. Although this amendment was not agreed by the Committee, wording was agreed between the Government and the Opposition and a motion was tabled for Report Stage.

The Committee did not agree an Opposition motion to increase the frequency of the periodic review of designations from every three years to every year.

Likewise, an amendment to require the Government to report to Parliament each quarter on breaches of sanctions was voted down.

Another motion would have ensured that anti-money laundering regulations applied to limited partnerships in Scotland, but the Government argued it was not necessary and it was not agreed.

The Committee voted against a motion that would have removed the ability for Ministers to amend, repeal or revoke legislation for regulations under section 1 or 43. This is one of the Henry VIII powers to change primary legislation by means of secondary legislation that had provoked resistance in the House of Lords.

The Opposition also proposed an amendment that would have set up a House of Commons sanctions select committee to scrutinise sanctions decisions. It was not approved.

The Committee voted against a proposed amendment to create the criminal offence of failing to prevent the facilitation of money laundering in an organisation.

Some amendments aimed to strengthen the role of Companies House in fighting money laundering; one would have prevented the Registrar of Companies from registering a company unless the required anti-money laundering checks had taken place.

Another Opposition amendment aimed to ensure that Trust or company service providers that do not conduct business in the UK cannot incorporate UK companies without oversight from a UK supervisor; there was a related amendment to ask courts to consider director disqualification if they had failed to provide measures against money laundering. They were not successful.

An amendment would have ensured that standards published by the Financial Action Task Force (FATF) on combating money laundering and terrorist financing can be easily implemented. Government argued that this would limit the UK’s ability to go further than the recommendations of the FATF.

Remaining stages of the Bill are due to take place on 1 May.

This paper can be read in conjunction with the main paper on the Bill, produced for Commons Second reading:

The Sanctions and Anti-Money Laundering Bill 2017-19, February 2018

Other relevant papers:

Legislating for Brexit: EU decisions, January 2018

EU (Withdrawal) Bill: clauses 9, 8 and 17, December 2017

European Union (Withdrawal) Bill, September 2017

Do sanctions work?, June 2015