1.     Criminal Finances bill – Consideration of Lords Amendments

Unless otherwise stated, clause references are to the Bill as introduced in the Lords (HL 104).  The Section below sets out government amendments agreed to in committee.

1.1   Government amendments

Terrorist Property

Sharing of Information

Clause 34 relates to disclosures of information made in connection with a) a suspicion that a person is involved in the commission of a terrorist financing offence, or b) the identification of terrorist property or of its movement or use. The Bill provides that disclosures, made in good faith, do not breach any obligations of confidence or any other restrictions on disclosure.

The amendment extends this legal protection to cases where the disclosure conditions (section 21CA Terrorism Act 2000) have not been met, but the person making the disclosure had a reasonable belief that the conditions had been met. Baroness Williams of Trafford explained at HL Deb 28 March 2017 c521 that the Bill, as currently drafted, may deter the exchange of information and that the amendment introduced legal certainty.

Further Information Notices

Clause 35 deals with further information notices, which are notices given by law enforcement officers requiring further information in relation to a disclosure.

Amendments were made to remove the provisions for further information notices. As explained at HL Deb 28 March 2017 c521 by Baroness Williams of Trafford, the National Crime Agency can already request information to be provided voluntarily under existing powers, such that further information notices are not required.

Forfeiture of Terrorist Cash

Clause 36 allows for the forfeiture of different types of terrorist property.

The amendment expands the definition of “terrorist cash” to include betting receipts, defined in clause 37(b) as a “receipt in physical form that represents a right to be paid an amount in respect of a bet placed with a person holding a betting licence.” As explained by Baroness Vere of Norbiton at HL Deb 28 March 2017 c541, if law enforcement agencies suspect that the funds used to place a bet are the proceeds of crime, this amendment allows them to seize the betting slip.

Offences in relation to counter-terrorism financial investigators

These amendments deal with the offences of assaulting and obstructing a counter-terrorism financial investigator. Two amendments were made to clause 40.

The first limits the fine for offences of assaulting or obstructing a counter-terrorism financial investigator to one “not exceeding level 3 on the standard scale” (£1000).

The second expands the definition of a “relevant power” exercised by a counter-terrorism financial investigator to include the exercise of disclosure order powers. As discussed by Baroness Williams at HL Deb 28 March 2017 c585 the amendment therefore extends the offences to include the assault or obstruction of a counter-terrorism financial investigator in the course of exercising disclosure order powers.

Enforcement in other parts of the UK

A new clause (clause 42 in the Bill as amended in Committee) is inserted to provide for investigatory orders made in one part of the UK to be enforced in another part. It was agreed to without debate at HL Deb 28 March 2017 c587. Significant changes were also made to Schedule 5 as a consequence.

1.2   Discussion on other amendments not agreed to

Clause 42 of the bill introduces a new offence of “failure to prevent facilitation of UK tax evasion”.  This adds to the existing offence under the Bribery Act of failing to prevent bribery.  The purpose behind the amendment (HL Deb 3 April 2017 c865) suggested by Baroness Bowles of Berkhamsted was:

  • It therefore makes sense to have an extended family of failure to prevent offences for other serious crimes for which the UK has spectacularly failed to prosecute large companies. The purpose of this type of offence, along with a defence of due diligence, is to make companies have better prevention procedures as well as providing deterrent and punishment.

The amendment was withdrawn.

A new clause was proposed by Lord Kennedy of Southwark (HL Deb 3 April 2017 c876) which would require:

  • the Secretary of State to publish a report on the number of companies that have been excluded from tendering for public sector contracts, or had an existing contract terminated as a result of being charged with the offence of failing to prevent the facilitation of UK or foreign tax evasion offences.

The justification for this was that the more ‘light’ that is shone on the subject the greater was the likelihood of success in preventing bad behaviour.

Baroness Bowles moved a further amendment that would expand the circumstances under which a director might be disqualified from office.  Currently, she claimed, offences other than those dealt with under competition law were less likely to result in disqualification.  She said (HL Deb 3 April 2017 c877):

  • This means that the Competition Commission can seek disqualification orders as part of its suite of enforcement powers. In contrast, after a corporate criminality finding, the matter would have to be brought to the attention of the Secretary of State, who is the only person entitled to make a disqualification application to the court. However, there does not seem to be a mechanism by which conduct reports or the like are sent to the Secretary of State in such a case, as they would have to be for insolvency; nor does the Secretary of State have the specialised knowledge to address the public interest issues arising out of the prosecution. It also prevents the prosecuting authority having the power to use disqualification as a direct tool to punish or deter criminal behaviour by companies.

Baroness Williams responded by saying that “I am pleased to say that the Government are supportive of the intentions of these amendments, although that is not to say that further legislation is necessarily required”.

Baroness Stern moved a new clause (HL Deb 3 April 2017 c883):that would require offshore financial centres in British Overseas Territories to allow public access to registers of beneficial ownership.  Responding Baroness Williams explained at length the progress made towards the goals of effective registers of public ownership by the British Overseas Territories (HL Deb 3 April 2017 c905).  Concluding she said (HL Deb 3 April 2017 c908). 

  • I will talk now about the long-term ambition. The UK is the only G20 country to have established a public register, which has been in operation for less than a year. The Government have made it very clear that it is the Government’s long-term ambition that publicly accessible registers of beneficial ownership will in time become the global standard. Should this happen, we would expect the overseas territories and Crown dependencies to implement this standard. Given that so many jurisdictions fail even to reach the standards set by the Financial Action Task Force for beneficial ownership transparency, it is right to focus our efforts on persuading others to up their game, while ensuring that the overseas territories, as well as the Crown dependencies, deliver on what they have promised.

The amendments were withdrawn, Baroness Williams saying that the Government wanted to work consensually with the Overseas Territories rather than on the basis of compulsion.

Related posts