Proceeds of Crime Bill

[back to previous text]

Ian Lucas: But should that suspicion not trigger internal procedures concerned with asking the client about the money? Is that not the correct course of action to take?

Mr. Field: We shall discuss internal procedures and regulation later in part 7, and I do not want to rehearse those arguments. As I said in response to the hon. Gentleman's speech, large banks and firms of accountants will probably have to build up an enormous regulatory infrastructure. However, for small practitioners, such as the average sole practitioner, almost the opposite is true. Either they must incur enormous expense and employ or contract staff for the purpose, or they will turn a blind eye and may be regarded as fair and easy game by both the

Column Number: 999

regulatory authorities and would-be money launderers.

Mr. Ainsworth: We are enormously grateful to the hon. Gentleman for bringing to the Committee his experience not only of working in the City but of representing his constituency. Although we are all worried about the well-being of the City, he is bound to be extra worried. As the suspicion test is already in the existing legislation on concealment, what does he believe the effect on our reputation for financial institutions would be if we were now to remove it?

Mr. Field: That is a fair comment. Such consideration must be carried out in the round and include all regulations, because part and parcel of the Bill is to put in place and encapsulate a lot of other rules, and put them under the single head of money laundering. That is a worry. In spite of the view of the hon. Member for Glasgow, Pollok, the Opposition are here not to do the City's talking but to do what is right in all circumstances. The Minister is right to highlight an anxiety that the perception might be that we were moving away from the provisions relating to money laundering and making them less highly regulated That might cause anxiety both in the City of London and in a European context, where people are trying to ensure a level playing field in Europe.

Mr. Grieve: I am interested in this discussion, because most of our discussion has centred on the regulated financial sector. However, as my hon. Friend may agree, part 7 applies not only to the regulated financial sector but to everyone, including those who, unlike the people whom my hon. Friend describes in the City, will have no knowledge of or access to such provisions. My hon. Friend may agree that that should colour the Committee's approach to this part, to clause 321 and to the tests under it.

Mr. Field: I could not agree more. The point is well made. However, inevitably the money-laundering provisions will in the main highlight the regulated sector. To be candid, I suppose that professionals who deal with such matters on a day-to-day basis should have a greater burden, which goes beyond that of the everyday man in the street. As my hon. Friend the Member for Beaconsfield pointed out, people might ask whether the courts would use the provisions if anxiety were expressed about an everyday man in the street who would otherwise fall foul of them. Are they geared towards the regulated financial services sector? I accept that the burden might be slightly different between professionals and the everyday man in the street. Equally, however, I would have great anxiety if we did not recognise that if a person is to fall foul of the draconian measures in part 7, he must have at least some knowledge.

Mr. Stinchcombe: I am grateful for the opportunity to speak on the amendment and the clause, as I want to explain why I shall support the provision, and the Minister's argument. It is because the questions that I have asked have been answered to my satisfaction.

However, there is a real point to be made about the amendment. It is not the point made in the speech by the hon. Member for Spelthorne, which was breathtaking nonsense; it is what the Conservative

Column Number: 1000

spokesman said about whether to incorporate mens rea into the offence under discussion, and if so, to what extent. In this country, offences of strict liability are not ordinarily created, so that one can be convicted whether one acted intentionally, recklessly, negligently or whatever. How do we incorporate mens rea, and what is the appropriate mens rea to incorporate into this offence?

As the Committee heard, the mens rea thus far incorporated into the Bill derives not directly from clause 321 but from clause 329, whereby the person would have to know or suspect that the property with which he was dealing was criminal property. That could be compared with the provision under section 22 of the Theft Act 1978, in respect of handling stolen goods, whereby the person would normally have to know or believe that the goods were stolen. The difference is therefore small—it is between belief and suspicion. The question is whether the threshold in the Bill should be lowered from belief to suspicion. Having heard the arguments put forward by the Minister, I am persuaded that it should be lowered. The principal reason is that, as the hon. Member for Cities of London and Westminster just said, this part of the Bill, which deals with money laundering, will hit the regulated sector most obviously and massively.

Mr. Grieve: Perhaps I am intervening too early, but I am sure that the hon. Gentleman would agree that one might have greater sympathy with the Minister's position if this part of the Bill were confined to the regulated financial sector, which it is not. The hon. Gentleman may agree with me that clause 323 provides a total replacement for the offence of handling, which could be used against any individual, anywhere in this country. It introduces a completely different and lower test from that which has historically been applied to handling stolen goods. Clause 321 is slightly different, because it relates to other activities, but clause 323 covers exactly the same offence.

Mr. Stinchcombe: I am grateful for that contribution, and I think that the hon. Gentleman is right about clause 323. However, I will not refer directly to that clause at this stage, as we have not reached it.

Mr. Hawkins: Will the hon. Gentleman give way?

Mr. Stinchcombe: I shall first deal with the initial point made by the hon. Member for Beaconsfield, which was that he would have more sympathy for the Minister's position if clause 321 were confined to the regulated sector. On the contrary, if it were confined to the regulated sector, the Minister's arguments would be compelling, for two reasons. First, in the regulated sector one is dealing with professionals who are making large sums of money out of dealing with particular property, and who are trained to deal with it in a professional and appropriate way, as my hon. Friend the Member for Wrexham said.

Secondly, as the hon. Members for Surrey Heath and for Cities of London and Westminster both argued, the sheer scale of the laundered money with which we are dealing must be taken into account. If it is true that virtually every transaction with which big

Column Number: 1001

City firms are dealing involves money that they suspect may be tainted by criminality, a different culture and a new professionalism should be introduced in the City of London and big institutions, to stop that happening. That is precisely the reason why people in the constituency of my hon. Friend the Member for Glasgow, Pollok are dying: we are allowing a huge culture of criminality relating to drugs money and other factors to infect ordinary people in the drawing rooms of Pollok and the institutions of commerce in this country.

11 am

Mr. Hawkins: May I make two points to the hon. Gentleman? First, he said that he could not deal with issues that relate to clause 323 because we have not yet reached it. However, I remind him, as I reminded the hon. Member for Wrexham, that one of the amendments in the group relates to clause 323, so we are dealing with that clause, although we shall have another debate about it later. However, this is the only debate that we will be able to have on this specific issue in clause 323. It would be out of order to return to it later.

The hon. Gentleman genuinely misunderstood what my hon. Friend the Member for Cities of London and Westminster and I said. There is a regulatory and compliance culture in the City of London now. All reputable institutions want to stop money laundering now. However, the over-draconian way in which the Bill is drafted will impose huge unnecessary regulatory burdens that will enforce a reporting regime in which things that have nothing to do with money laundering cost our institutions huge sums for no good purpose. That will not stop deaths. We all want to stop deaths and money laundering.

The Minister and the hon. Member for Wellingborough both know that there is no difference between what we and they want the legislation to achieve. However, the provision will be ineffective and unworkable, and so costly and bureaucratic that it will be counter-productive.

The Chairman: Order. May I remind the Committee that interventions should be just that? That intervention was rather long.

Mr. Stinchcombe: I am grateful for the intervention, which brings me directly to the point that I was about to address.

We are conducting a balancing exercise. On one hand, we have criminality, which causes the loss of many lives. On the other hand, there are administrative burdens for institutions in the City of London and elsewhere, which are simply to make a disclosure to a nominated officer. The balance struck in the Bill is right because of the policy reasons that my hon. Friend the Minister explained. If a professional is suspicious that money with which he deals is criminal, the least he should do is disclose that. If the problems are on the scale that has been suggested, the burden is not too big to bear; it is a burden that must be borne.

Column Number: 1002

We are considering not only the regulated sector, but money launderers and other fences whom the provision would criminalise. I will be happy to do that. We read about money launders in the papers, and we see what happened to gold bullion that was stolen and melted down. Such criminals should be prosecuted if there is suspicion that property with which they deal is criminal property, and they subsequently conceal, disguise, convert, transfer or remove that criminal property.

If I, as an ordinary citizen, dealt with property that I thought to be criminal, I would stop dealing with it, and I would want to bring it to the attention of an appropriate person, because of my obligation to act responsibly in civil society. I would have responsibility for not only my actions, but for people who might be harmed should I act wrongly.

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2002
Prepared 17 January 2002