Proceeds of Crime Bill

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Mr. Grieve: Are there, then, numerous instances of NCIS being unable to prosecute because it concluded that it could not show that the matter amounted to

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more than mere negligence? We have not received that detail, although the statistics must be available. Facts are bandied about without evidence that may be important. I do not know whether the Minister wishes to amplify the point, but I would be grateful to hear whether there have been numerous instances when NCIS has wanted to have a go at a company to set an example under the Drug Trafficking Act 1994, but has been unable to do so. Is that the case, because I am not aware of it?

6.15 pm

Mr. Ainsworth: I read NCIS's position to the Committee. There are people who have facilitated the laundering of criminal assets in numerous offences but who claimed the defence that they had no suspicion or knowledge. Obviously, if the matter continues to worry hon. Members, I will attempt to amplify on that.

My hon. Friend the Member for Redcar asked why such cases could not always be dealt with as an internal matter. In many cases, they could and should. As I told the Committee before, a minority of organisations produce most of the reports. However, there are organisations in which there is neither the will nor the ability to prove matters and to bear down. We must put pressure on such organisations because they are more likely to be involved in money laundering. We must remove excuses that can be used to prevent prosecutions.

The central worry that remains was mentioned by my hon. Friends the Members for Wellingborough and for Wrexham. They said that things would be better if we split the Bill and made two separate offences with, perhaps, two levels of penalty. Currently, we propose the single offence of failure to disclose. As my hon. Friend the Member for Wellingborough rightly said, the measure on which people may be judged is a mixture of the objective and the subjective. We believe that that will work in practice. The consequences of splitting the offence are not simply drafting matters, and he knows that.

There would be situations in which it would be impossible to prove that one or other offence led to continuing money laundering through an organisation. The Bill closes that loophole. Many examples of such circumstances may come to mind, although I cannot think of an exact example. An individual may have information that is passed through them all the time. As the clause is structured, we must be able to show on the objective or subjective test that that person knew or suspected something, or had reasonable grounds to believe it. Of course, if the court is satisfied beyond reasonable doubt that the person had such suspicion or knowledge, there is no doubt that it will take that into account when sentencing. If it is not satisfied of that, there will be differentiation.

If there were separation, we would make two different offences. One offence would be knowing or suspecting, which currently exists in legislation and is difficult to prove, and the other would relate to reasonable grounds for suspicion. The potential for us to be able to prove one or the other issue and the

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dichotomy that that would give to the prosecution about which offence to bring in the first place could be very real. The matter is more than a drafting problem. To split the offence in such a way will potentially give the prosecution a real problem.

Mr. Stinchcombe: Indeed, it is my suggestion to draft the clause in such a way as to make two different offences, the reason for which is that, first, such a measure would have an advantage by being drafted in the way that I have outlined. Secondly, it is arguable that we should be looking at different levels of penalty under the Bill for different levels of criminality and the criminalising of the negligent. Thirdly, as my hon. Friend the Member for Redcar said, there are additional protections that we would wish to draft into an offence of negligence in any event. That is a good reason for not appreciating the criminality, rather than not disclosing it.

Mr. Ainsworth: I hear what my hon. Friend said. As I have said, I shall think about his argument as we proceed. I hope also that he will consider what I have said. I do not think that he has come back to me about the difficulties that could be caused by one or the other type of offence. The dichotomy that will be given to the prosecution is that it goes for one or the other offence.

Mr. Stinchcombe: I do not understand why the Government could not draft the Bill so that it will enable prosecutions in respect of the alternative offence.

Mr. Ainsworth: There could be real difficulties in taking such action. As drafted, the clause covers the simple offence of failing to disclose and the level of proof applies if the person

    ''knows or suspects, or . . . has reasonable grounds for knowing or suspecting''.

Stephen Hesford: I seek clarification from my hon. Friend. Is it the policy that there should be one offence?

Mr. Ainsworth: Under clause 324, yes.

Stephen Hesford: The offence has two potential limbs. A person can know, if that is the state of the evidence; a person can be shown to suspect, if that is the state of the evidence or such an offence should be known or suspected if there are reasonable grounds for so doing. If my hon. Friend agrees that there is one offence, can the prosecutor decide under the Bill to prosecute on either of the limbs if he believes that the state of the evidence warrants it? If a prosecutor said that he was prosecuting on knowledge because that is the most serious level on which to prosecute, would not that show to the court the appropriate penalty?

Mr. Ainsworth: I do not know. I should have thought that it was for the court to listen to the evidence and to take that into account before sentencing.

Norman Baker: Government Back Benchers are making some important points. If the proposition that they are advancing is correct and the prosecutor can separate the charge that is being made—whether it is A or B—different levels of penalty should be prescribed, and in a sense that would be separating the offence as

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they suggest. However, if there were no such opportunity, the offence of knowing and suspecting would be equated with that of having reasonable grounds for knowing and suspecting. Given the comments of the hon. Member for Beaconsfield about dangerous driving and driving without due care and attention, members of the Committee do not support the two offences being put together.

Mr. Ainsworth: I am being asked to contemplate splitting the clause. This is a key clause, as the hon. Member for Orkney and Shetland pointed out. If we render it ineffective, we will do a great injustice to part 7.

Mr. Carmichael: The Minister is right—I did make that point—but I also made it clear that I supported the position of the hon. Member for Wellingborough.

There are, perhaps, stronger parallels than that which the hon. Member for Beaconsfield mentioned. One that springs readily to my mind is the misreporting of fish landings, as that offence used to comprise a substantial part of my practice. There were two offences: knowingly misreporting, and recklessly misreporting. The alternative charge was always made, which is also the practice with regard to several similar offences. However, the Criminal Procedure (Scotland) Act 1995 contains provisions that state that where two offences exist, and one is greater than the other, evidence can be led in respect of the greater, but a conviction will be allowed on the lesser, if that is what the evidence justifies. A similar provision probably exists south of the border.

Mr. Ainsworth: I acknowledge the hon. Gentleman's point. I have also listened carefully to what some of my hon. Friends have said about the matter, and it is clear that there are serious concerns. However, I am also concerned about the time.

There is not a proposal before the Committee to split the offence, so we could not consider that now, even if we wanted to—and in any case I am concerned that if we decided to do that, we might create difficulties, and the legislation might become less effective.

At the moment I can deal only with the amendments before us, and I urge the Committee to reject them, because it is essential to preserve the current wording of the Bill. Although I acknowledge that a serious problem has been identified, and that it needs to be tackled, we are dealing with a key clause, and I do not want it to be watered down. With regard to that phrase, I note that the hon. Member for Cities of London and Westminster (Mr. Field) has been pulled into line: he is now talking about the clause being ''made effective'' rather than ''watered down.'' However, he said what he said.

Although my hon. Friends have raised serious concerns, I hope that they will think about the fact that changing the clause could cause damage. We have pored over the matter. People are worried about issues concerning junior staff and untrained staff, and representations about that have been made to us. If the legislation could be made effective without that

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burden being put on such staff, we would consider going down that road. However, it is such staff who have the information that can prevent money laundering from taking place to anything like the current extent, and if we do not take the kinds of measures that are in the Bill, we will not effect the sea change that is required to achieve our goal.

The Chairman: I wish to remind the Committee that if the motion to change the business is not reached before 7 o'clock, the original motion will stand, and the knife will come in.

Mr. David Wilshire (Spelthorne): I will not speak for more than a few moments, Mr. McWilliam, because that is the point that I wish to raise with you and the Committee.

Some of the Committee members who have not contributed to the debate feel strongly about the matter, and they would like to contribute. If they could do that, it would enable us to vote sensibly, and on mature reflection, at the next sitting. However, we cannot do that. In my judgment, it is in the best interests of the Committee to focus as a priority on the business motion, so that other things can be considered in a sensible fashion. We should give notice that we are prepared to make no more speeches and to press the matter to a Division. We can return to the subject on Report if necessary. My hon. Friends and I judge that we need a business motion more than anything else at the moment.

6.30 pm

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