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Lord Rooker moved Amendment No. 256B:
- Page 192, line 10, at end insert "and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent"
On Question, amendment agreed to.
Lord Thomas of Gresford moved Amendment No. 256C:
- Page 192, line 17, at end insert—
The noble Lord said: The amendment raises a point that was discussed at some length in Committee in another place. Subsection (1)(c) refers to a person committing an offence if he,
Lord Bassam of Brighton: I am grateful to the noble Lord for his explanation. As he said, this issue was debated in committee in another place. As I understand him, his concern is that the offences in the clause and the offence in the Theft Act 1968 relating to handling stolen goods are similar in nature, in terms of the conduct required to commission them and through the maximum penalty of 14 years' imprisonment, which they both attract. However, both have different mental tests. In respect of the "handling stolen goods" offence, the test is one of knowing or believing and for the "Clause 329" offence of acquiring, possessing or using criminal property it involves knowing or suspecting.
I accept that there is a good deal of overlap between the theft and the handling stolen goods offence in the Theft Act 1968, and the offence of possessing or acquiring criminal property as set out in Clause 329. Under Section 22 of the Theft Act a person handles stolen goods if (otherwise than in the course of the stealing), knowing or believing them to be stolen goods, he dishonestly receives the goods or assists in their retention, removal, disposal or realisation by or for the benefit of another person or if he arranges to do so.
However, it should not be overlooked that as well as similarities there are also substantial differences between the activity required for the commission of the two offences. The principal difference is that under Clause 329 an offence is committed by mere possession, while under the "handling stolen goods" offence there needs to be action beyond simple possession—for example, assisting in the retention or removal of property for the benefit of another person.
It is still true, however, that a receiver of stolen goods could commit the "Clause 329" offence and the offence under Section 22 of the Theft Act. But that should not be viewed as a problem.
There are many examples in United Kingdom law where the conduct of offences overlaps. Whether a person is charged with one offence or another, or both, will, as the noble Lord is aware, depend on the circumstances. Where in the present analogy between handling stolen goods and Clause 329, a person is charged with one or other offence, or both, does not seem to us to matter a great deal because the maximum penalty that is attracted would be the same.
In addition, it is important that we leave some flexibility for the prosecutors to decide which offence it would be more appropriate to charge in the circumstances of each individual case. It may be that one charge is more likely to succeed than another. It has been put to us that the overlap between the possession offence and the "handling stolen goods" offence creates an undesirable conflict. We do not think that that is the case. It has also been said that a prosecution is much more likely under the clause than under Section 22 of the Theft Act, particularly since the prosecution would have to establish only a mental element of knowing or suspecting that the items were stolen goods rather than actual knowledge or belief, which would be a tougher test.
I re-emphasise that we consider that both offences are definitely needed. Having listened to the arguments, I hope that the noble Lord will feel able to withdraw the amendment, although I appreciate that the issue that he raised in this probing amendment is very important.
Lord Thomas of Gresford: As a result of that explanation, it appears that a person commits an offence if he has possession of criminal property, if he does not know that it is criminal property and if he does not know that he has possession of it, never mind about his belief. That appears to be a very stringent offence, which could trap an awful lot of people.
This is a probing amendment and I do not intend to take the amendment further at this stage. I shall reflect on the Minister's answer and may return to the matter later.
Lord Carlisle of Bucklow: Did I understand correctly that the distinction involves the question of knowledge? If so, that surely implies, as the noble Lord said, that there is no need to have knowledge that criminal property is involved in order to commit the offence of being in possession of it.
Lord Bassam of Brighton: I said that I believe that different mental tests apply. In respect of the offence of handling stolen goods, the test is one of knowing or believing. For the Clause 329 offence of acquiring, possessing or using criminal property, the test is one of knowing or suspecting. Therefore, there is a slight difference.
Lord Thomas of Gresford: I do not understand what "knowing or suspecting" means. It is certainly not on the face of the Bill and I do not know that it can be properly implied by the wording used in the Bill. However, I do not wish to prolong the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 257 not moved.]
Clause 329, as amended, agreed to.
Clause 330 [Failure to disclose: regulated sector]:
Lord Kingsland moved Amendment No. 258:
The noble Lord said: At Second Reading, we raised concerns that, under the Bill, it will become possible for a person to be convicted of the criminal offence of failure to report, not only when he has knowledge or suspicion of money laundering but also when a court determines that he should have had knowledge or suspicion of money laundering because there were "reasonable grounds". The definition of "money laundering" is very wide and includes simple possession of criminal property.
We have previously suggested amendments which would prevent the introduction of such a negligence or objective test. We remain convinced that only persons who knew or suspected that money laundering was occurring should be prosecuted for the failure to report an offence. We cannot understand how convicting a person for inadvertence or oversight can be justified, especially as the offence will apply to workers at all levels of experience, including very junior staff. If such a test is introduced, it may, indeed, result in a fear culture among the whole regulated sector. That will be counter-productive. It will lead to defensive over-reporting with which the authorities are unable to cope.
The impact of such over-reporting may, in turn, lead to less co-operation between the regulated sector and the authorities as workers feel alienated because their exposure to criminal prosecution matches or even exceeds that of the criminals who commit the
If the Government are intent on introducing the negligence test, then we have tabled further amendments which seek to ensure that the sentence is proportionate. In my submission, the punishment should differ, dependent on whether the accused person actually knew or suspected or whether the court determines, with the benefit of hindsight, that there were reasonable grounds for that person to have known or suspected.
A person should not lose his liberty as a result of committing an offence through inadvertence; and we do not believe that a person should lose his liberty because of a professional oversight. Therefore, if the Government insist on maintaining the offence, we consider that a financial penalty imposed by the magistrates' court would be appropriate, especially as inevitably it will be coupled with an "industry" stigma, perhaps for the rest of the individual's career. I beg to move.
Lord Rooker: I begin by responding to the general point. I fully accept that to an outsider the penalties set out in the Bill may look tough, or perhaps, according to some people, too tough. However, against the background of several money laundering cases which have occurred in the City and which have not been reported to law enforcement agencies, we believe that very strong anti-money laundering measures, including the new negligence test, are more than justified. Frankly, it is of the utmost importance and in the interests of the City's financial reputation and standing, both here and overseas, that the United Kingdom is seen to be demanding the highest standards of diligence.
The test of "reasonable grounds" is important because it will help to raise awareness of, and compliance with, anti-money laundering controls throughout the regulated sector. That will be especially important when the range of regulatory activities is widened following the implementation of the second European money laundering directive. Creating a separate offence of negligence would, in my view, reduce the deterrent effect. An individual tempted to turn a blind eye to money laundering might well decide that the prospect of criminal gain outweighed the risk of being fined.
Therefore, there is good justification for a negligence test. Together with the fact that we make no apology for these being very strong anti-money laundering measures, we cannot see the justification for accepting the noble Lord's amendment.
"( ) the facts which would constitute such an offence also constitute an offence under section 22 of the Theft Act 1968 (c. 60) (handling stolen goods)."
"has possession of criminal property".
My concern is about the interrelationship of that offence with handling under the Theft Act. Is that offence separate and different from handling? Is a different intent required? What is the purpose of the provision? This is a probing amendment and I look forward to the Minister's reply. I beg to move.
Page 192, line 32, leave out paragraph (b).
4.15 p.m.
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