Proceeds of Crime Bill

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Norman Baker: Does the hon. Lady agree that it might be a question not simply of inattention but of a failure to appreciate? One of my concerns is that someone may be judged to have been in a position to know or suspect that there were reasonable grounds for reporting a transaction, but did not do so, although they were carrying out their work in a proper manner. Their character may be such that they would wish to prevent money laundering: they would have taken action to prevent it, if they had been aware that it had taken place. However, if it had taken place, but they simply did not appreciate that it had, it might subsequently be levelled at them that they should have known.

Vera Baird: That is right.

Ian Lucas: Although we have fully debated the matter, I wish to make two points.

First, I endorse the remarks of my hon. Friend the Member for Wellingborough about the clause, and especially his recommendation that the subjective and objective offences should be split. I want the Minister to consider doing that.

Secondly, the key issue regarding subsection (2)(b) is whether someone should be criminalised because of what I would describe as a mistake. I do not agree with my hon. Friend the Member for Redcar that such a

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person would be entirely innocent, because we are talking about circumstances in which someone has made a mistake, which means that they did not attain, or maintain, a reasonable standard in the performance of their work. It is relevant to note that we are discussing the regulated sector.

My point is that there are circumstances in which the criminal law imposes liability on individuals who are negligent.

Mr. Grieve: The hon. Gentleman is right. For example, to pick up the point about road traffic law, there is an offence of driving without due care and attention. However, it is notable that a distinction is drawn between that offence—for which one can be fined, or at most disqualified for a period under certain circumstances and after the points have been totted up—and dangerous driving, where one has to fall well below the acceptable standard, and the penalties are much more serious. That is significant: serious penalties can be incurred as a result of a due care and attention test.

Ian Lucas: It is also the case that, for example, manslaughter can be established on grounds of negligence.

The issue of policy that we are making a decision about is whether the effect of this subsection is strong enough to persuade institutions in the City to increase the monitoring element of their work. That is the key point with regard to these provisions, and we must not lose sight of it. Do we consider the matter to be important enough for us to compel institutions in the City to improve their performance? As our constituents' feelings and experiences tell us, offences such as drug trafficking have a deeply negative effect on the communities that we represent.

The issue of policy that we must decide about concerns the question of balance. It is very difficult to make a decision about that, and we have heard different opinions about what to do. I wish us to focus on this point, and to decide whether we consider the issue to be sufficiently important to import this offence into the legislation.

The Chairman: It might be helpful if I remind the Committee that if we do not finish debating the amendment before 7 o'clock, the knife will fall at that time, because I will not be in a position to put the programme motion.

Mr. Ainsworth: I have already been reminded of that by the Whip, so it is good that you have reminded the Committee of the position, Mr. McWilliam.

I have listened with great interest to the debate and many serious points have been made, and well made, too. I can only hope that all members of the Committee will listen to my response. My starting point is a combination of the points made by my hon. Friend the Member for Wrexham (Ian Lucas) and the hon. Member for Orkney and Shetland. It is necessary and it is to be expected that a burden of proof at that level is all that should be available to the prosecution when dealing with only the regulated sector.

My hon. Friend the Member for Redcar said that there were other issues and clauses, but they can apply

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to the whole of the population. As she knows, clause 324 applies to the regulated sector. Is it necessary and will it be effective? Will it bring the culture change that we require in the regulated sector? Is it a price worth paying? Is there any other way in which to deal with the matter? Those are the issues that we should be thinking about as we deal with the amendments.

I believe that the clause will be effective. I am not trying to be funny, but some of the arguments advanced by the hon. Member for Surrey Heath were those that impressed me least. I am sorry that he is not here. He made three substantive points, one of which was that he questioned whether we are listening to NCIS about the past record of reporting. All he can bring to his argument is a second-hand report of what a senior NCIS officer said at a lecture somewhere in the country and pray that in aid against what NCIS is saying to the Home Office and the Committee about the reporting record. Its views go to the heart of the matter. As my hon. Friend the Member for Wrexham said, we are concerned about the necessity for such a provision.

I have replied to the British Bankers Association and made it aware of what NCIS is saying to us. NCIS believes

    ''that this is a vital change to the current legislation. The absence of a negligence test has resulted in abuse of the system. Professionals working within the financial sector have, on numerous occasions, facilitated the laundering of criminal assets, claiming as a defence that they had no suspicion or knowledge of money laundering.''

I invite the Committee to believe that, in many such cases, such claims are nonsense. It is effectively impossible under the current legislation to prove that suspicion. My hon. Friend the Member for Redcar asked where the need arises. I have explained that.

Mr. Grieve: Let me pick up on two points that the Minister has made. I understand his argument, although I am sure that he will agree that part of the problem is that only NCIS is telling us that. We are wholly reliant on its expertise for the evidence for the failure to declare what it believes is major money laundering. Secondly, my hon. Friend the Member for Surrey Heath may be wrong, but it was right to flag up that he had been given contrary information to that of the Minister. If the latter can confirm the number of declarations and what has happened over the past three months, that will clearly reassure the Committee that we have the factual evidence right. It was plainly not wrong to show that to the Committee and to ask him to confirm his position.

Mr. Ainsworth: Considering the time, and the dilemma that we are in, as you have rightly pointed out, Mr. McWilliam, I do not consider that such issues are essential to our consideration of the amendments. The matters raised by my hon. Friend the Member for Wrexham and the hon. Member for Orkney and Shetland are exactly what we need to consider now.

The hon. Member for Surrey Heath referred to the British Bankers Association, person A and person B and the cheque that subsequently bounced and so on. I sat and waited for him to say that somebody in the organisation might be accused of having reasonable

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grounds, but he never did so. I do not know whether he was talking about de minimis regulations, or some other matter. We should not be surprised that financial institutions are worried about our introducing a negligence test. However, he did not raise the issue of grounds for suspicion, knowing or reasonably being expected to know. The point that he raised was irrelevant to the case.

The other point on which I want to touch quickly is that raised by my hon. Friend the Member for Wirral, West, because I agree with him. It has been suggested that the fact that having reasonable grounds to suspect is included in the prosecution's armoury will lead to a huge increase in reporting. How will that happen? It will happen only if people suspect or know of money laundering now, and the fact that they can be prosecuted if we can show that they had reasonable grounds to suspect leads them to make a report that they should have made anyway. If that cultural difference is made, the number of reports will increase. However, reasonable grounds on its own will not lead to an increase. As my hon. Friend points out, if people do not know or suspect, they will not make a report. The only way in which the provision will make a difference is if it raises standards as we want them to be raised.

Stephen Hesford: I have been accused of all sorts of things, and on many occasions rightly, but I am afraid that I did not make that point. I have not made any of those points. I agree with the Minister.

Mr. Ainsworth: I am sorry. I am getting my hon. Friend mixed up with my hon. Friend the Member for Wrexham, who made the point in a previous intervention.

The hon. Member for Surrey Heath also asked what would be reasonable grounds for not making the disclosure, which relates to what would be caught by the provision. Ultimately, that will be a matter for the court. The point about illness, it will be a matter for the prosecution. If the prosecution decides to go ahead, it will be a matter for the court. Of course, if somebody had been put into a job or position, and wound up having information thrown at them when they were a brand new learner on the job, the prosecution would have to consider that before targeting them rather than their employer for having put them in that position. I cannot say what will be the parameters of what is acceptable as a reasonable excuse. That will be a matter for the prosecution and the court. For the benefit of the hon. Member for Surrey Heath—despite the fact that he is not present—it will be an English court, not a foreign, European one, about which he worries all the time.

My hon. Friend the Member for Redcar said that the provision is not in the existing legislation, and not in the other offences. It is not in the other offences because they apply far more widely than the regulated sector. It has been included in the Bill because the existing legislation is not working, as we are not managing to prove cases.

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