|Proceeds of Crime Bill
Mr. Davidson: I think that what the Law Society is advancing as good practice is exactly that. If lawyers operated to the standards to which the Law Society pretends and suggests that they do, many of our problems would be overcome. However, many lawyers are seduced by the prospects of the rich pickings to be made through dealing with criminals and being
Column Number: 1045prepared to co-operate in laundering money on their behalf. I hope that that is sufficiently unsubtle for the hon. Gentleman to comprehend.
Mr. Hawkins: It is certainly unsubtle. I can accuse the hon. Gentleman of many things, but rarely of subtlety. The Under-Secretary accused me of beingor correctly described me asblunt. I hope that I can be as blunt as the hon. Gentleman. I think that he is relating his experiences north of the border, and in particular his experience of his area, as he often does. I wonder whether he means to praise the Law Society of England and Wales but attack the solicitors who operate under the Law Society of Scotland. I am not sure that he does.
Mr. Davidson: That is disingenuous. The hon. Gentleman knows full well that I am saying that the guidelines of the Law Society, if operated in practice, would overcome many of the problems. The reality is that the Law Society of England and Wales and the Law Society of Scotland are either unable or unwilling to police their members to an appropriate standard, so the legal authorities have to do it for them.
Does the Minister accept that resources must be considered? I have spoken, along with several colleagues, to Strathclyde police and to representatives of other authorities. They are worried about resources. There are several individuals who they are well aware that they would wish to target and pursue, but they are worried that they will not have the resources to undertake such action adequately. I hope that my hon. Friend will give me assurances further to those that he has given in writing already that such matters will be considered as a priority.
I also draw the Minister's attention to the press release of the Serious Fraud Office, which I am unable to lay my hands on at the moment. The gist of it was that one of the major difficulties faced by the SFO was precisely the practice of smurfing to which he referred. With modern electronic technology, it is possible for people to move small sums around the world in different waysthe payments being made from funny banks to respectable banks to circulate the moneyand once money gets into the system, modern technology can make it much easier for it to be dispersed.
The issues of smurfing and small amounts are essential. We cannot allow, as my hon. Friend the Member for Redcar said, offences to be committed for £1,000 but not for £999.99. While there is some merit in the Conservative Members' argument, yet again the effective result of their proposal would be to act as the criminals' friendthe launderers' friendand allow people to get away with practices that would otherwise be tort. I do want to be unduly critical of hon. Gentlemen, but only when they deserve it.
Mr. Hawkins: Accepting as I did the argument of the hon. Member for Redcar about a particular level, would the hon. Gentleman be less unhappy if we discussed a de minimis limit of £250 or £200? I am being serious.
Column Number: 1046Mr. Davidson: I understand the hon. Gentleman's point, but the principle of an offence being committed for £250, but not for £249.99, in multiple doses, as it were, would not deal with smurfing. Like him, I want the provision to work. I recognise the problem of bureaucracy and burdens on business. I referred to a list of banks earlier, but because such people cannot be trusted to police themselves, we must adopt an unfortunate mechanism. If banks, lawyers and accountants operated informal systems that were so rigorous that virtually all criminals were deterred, the number of cases that required to be reported would be minimal. Few occasions would arise when efforts were made to get money into the system.
The fact is that that is not happening. Solicitors and others have got themselves into the position of creating so much public mistrust that we are required to take action that, regrettably, will place a heavy burden on them. I do not think that hon. Gentlemen have responded adequately to the point, as a result of which I shall be forced to support the Government, even though I recognise that their argument is a difficult and almost undesirable approach to take.
Mr. Hawkins: I do not know whether I understand what the hon. Gentleman says. Would he be persuaded if I conjured up out of the ether clear evidence for him before our next sittingI suspect that I would be able to do that if I had toof how many reputable organisations produce such reports under the current legislation? Would he be persuaded that the system results in many reports from many reputable institutions? He suggests that the bodies cannot police themselves and that that never happens. Would he be convinced if I gave him evidence that it does happen and that the unamended provision would make the burden 10 times worse?
Mr. Davidson: By all means, the hon. Gentleman can produce the information. If I think that it is helpful and I am shown that the resourcing that is provided now and in the future would be unable to cope, that would influence my view. I am interested in anything that he can produce in the context of how the Minister tells us that we will deal with the pressures.
Mr. Foulkes: I hope to be able to deal with the debate tonight. I can be brief and comprehensive at the same time, although I do not know about anyone else.
I can assure my hon. Friend that we are examining the resources both north and south of the border and we bear in mind the worries that he and others expressed. It is right and proper that the Law Society publishes guidelines, and such guidelines have been published by many organisations that contain members that encounter money laundering during their work. However, we expect all members of such organisations to pay close attention to the guidelines and to adhere to them.
The hon. Member for Surrey Heath made a point on three occasions. Ninety-eight per cent. of cases that are received are reactive rather than proactive. In other words, consent is sought in only very few cases. NCIS responds as promptly as possible to cases in which consent is sought. However, NCIS has assured us that
Column Number: 1047it is willing to discuss any problems that arise with the organisations concerned. I hope that such meetings will follow on from the points that the hon. Gentleman helpfully raised.
Mr. Hawkins: I am grateful to the Minister for that. Following further inquiries of NCIS by his officials, it would be helpful if he could tell us by next Thursdaywe will not deal with all of part 7 tonighthow many outstanding reports led to delays that were greater than 72 hours before NCIS reported back.
Mr. Foulkes: We shall have other opportunities to discuss many aspects of part 7. My hon. Friend the Under-Secretary and I heard the hon. Gentleman's point and we will examine it.
I turn to smurfing. Lowering the threshold would always allow smurfing unless the threshold was so low as to be meaningless. The hon. Member for Beaconsfield almost invited me to enter a Dutch auction about the level of the de minimis threshold. That is not a productive exercise. Linked transactions can be apparent to NCIS, which receives all the information, but they are rarely apparent to the person who reports.
Confidentiality issues have nothing to do with thresholds. We are discussing a point of principle. Do we wish to create loopholes through which launderers may avoid prosecution?
Mr. Grieve: The Minister may have misunderstood my point. I said that an adviser who acts properly and receives information must put several things through his mind, one of which is, ''Is this suspicious, or am I making a mistake, and in doing so breaching the normal client confidentiality that I should try to maintain.'' Of course, he must not try to maintain confidentiality if there is suspicion or knowledge that the transaction is criminally connected, but he must bear the issue in mind. It would be unfortunate if he disclosed a completely innocent transaction and
Column Number: 1048breached client confidentiality. A person who thinks logically, honestly and properly must take that factor into account.
Mr. Foulkes: The hon. Gentleman must take into account what my hon. Friend the Under-Secretary said. The reporting occurs within a restricted, confined and privileged area.
I listened carefully to the hon. Gentleman, and I have two main points. The introduction of a de minimis threshold would deprive law enforcement agencies of valuable intelligence and would have a harmful effect on the overall fight against crime. We are not just dealing with serious crime and organised crime. There is a perception, which has been reflected in the comments of various hon. Members, that serious crime always involves large sums of money. However, in very serious crime, it is often the small amounts that allow detection to take place. I could give many examples, but there is not enough time tonight to give all of them.
In people smuggling, exchanges of money can be relatively small, but their detection can allow us to tackle the problem. In the drugs trade, youngsters are hooked on drugs through the payment of small amounts, which results in much serious crime in the longer term. In relation to terrorismthinking back to 11 Septemberthe transfer of small amounts can allow the planning of major offences to be detected. Tax evasion, pornography and paedophilia are other examples of serious crimes in which the amounts involved can be relatively small.
I hope that I am beginning to convince Opposition Members that we should not enter a Dutch auction. The smallness of the sum does not necessarily represent the seriousness of the crime. In 2000, 10 per cent. of all suspicious transactions made known to the NCIS were of less than £500 in value. I hope that that figure is persuasive. We recognise the Opposition's argument that we should accept a de minimis provision, but a very strong contrary argument exists. I hope that that convinces the Committee.
Adjourned accordingly at two minutes past Five o'clock till Tuesday 22 January at half-past Ten o'clock.
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McWilliam, Mr. John (Chairman)
Ainsworth, Mr. Bob
Clark, Mrs Helen
Field, Mr. Mark
Harris, Mr. Tom
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Johnson, Mr. Boris
|©Parliamentary copyright 2002||Prepared 17 January 2002|