My Lords, I put on record my thanks to my noble friend Lord Johnson of Lainston, who took the Bill through its first day of Report last week, and my noble and learned friend Lord Bellamy for his work in the run-up to today’s debate. I extend my thanks to noble Lords for the constructive debate we have had so far on the Bill, both in Committee and in separate meetings. This collaboration has resulted in comprehensive and much-needed legislation—
90: Schedule 8, page 263, leave out lines 24 to 26 and insert—
“(10) The Secretary of State may not make regulations under subsection (7) unless the Secretary of State has—(a) consulted the Scottish Ministers and the Department of Justice, and(b) given a notice containing the relevant information to the Scottish Ministers and the Department of Justice.(11) Consultation under subsection (10)(a) must include consultation about any effects that the Secretary of State considers the regulations may have on—(a) a person in Scotland or Northern Ireland (as the case may be) applying for the forfeiture of cryptoassets held in a crypto wallet that is subject to a crypto wallet freezing order, and(b) a sheriff or court in Scotland or a court in Northern Ireland (as the case may be) considering such an application or making an order for such forfeiture. (12) In subsection (10)(b) “relevant information” means—(a) a description of—(i) the process undertaken in order to comply with subsection (10)(a) in relation to the Scottish Ministers or the Department of Justice (as the case may be), and(ii) any agreement, objection or other views expressed as part of that process by the Scottish Ministers or the Department of Justice (as the case may be), and(b) an explanation of whether and how such views have been taken into account in the regulations (including, in a case where the Secretary of State proposes to make the regulations despite an objection, an explanation of the reasons for doing so).”Member’s explanatory statement
This amendment provides for certain consultation requirements to apply before regulations may be made under inserted section 303Z42(7) of the Proceeds of Crime Act 2002 (forfeiture orders).
As I was saying, I put on record my thanks to my noble friend Lord Johnson of Lainston and my noble and learned friend Lord Bellamy, but I also extend my thanks to all noble Lords for the constructive debate we have had so far on the Bill, both in Committee and in separate meetings. It is nice to be able to say that more than once. This collaboration has resulted in comprehensive and much-needed legislation. As my noble friend Lord Johnson set out, the Government listened to the views of the House during the passage of the Bill and have moved to address many of its concerns in the amendments tabled for Report.
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My noble and learned friend Lord Bellamy and I particularly look forward to speaking to the government amendments today on identification doctrine and SLAPPs, both of which represent major progress. I welcome the views expressed from all Benches during last week’s debate which acknowledged how significant a package the Government have brought forward, and I hope that noble Lords will keep that in mind as we debate today’s topics.
I now turn to the government amendments in this group. Government Amendment 90 makes provision for certain consultation procedures to apply prior to the Secretary of State making regulations under new Section 303Z42(7) of the Proceeds of Crime Act 2002, relating to crypto asset confiscation orders. It sets out a statutory process detailing the consultation process required with the Scottish Government and the Northern Ireland Executive before the Secretary of State makes regulations under that section.
Government Amendments 96, 98 and 101 are minor and technical amendments to update the definition of “economic crime” in Part 5 of the Bill to refer to the offences of encouraging or assisting found in Part 2 of the Serious Crime Act 2007. These minor amendments ensure that an earlier omission is corrected.
Amendments 91A and 92A concern the designation of high-risk countries and amend the existing Clause 181. Under the money laundering regulations—the MLRs—firms are required to carry out enhanced due diligence in respect of business relationships and certain transactions involving high-risk third countries. Those high-risk countries are defined in Schedule 3ZA to the MLRs. The schedule, in line with government policy, is updated each time the Financial Action Task Force—the FATF—updates its list of countries identified as having significant shortcomings in their anti-money laundering regimes. As currently drafted, Clause 181 introduces a measure to streamline the process for updating our domestic high-risk country list by removing the requirement to lay a “made affirmative” statutory instrument each time the FATF changes its list, replacing this with an administrative procedure. This was developed in response to feedback from Parliament on the current process.
The Government have recognised concerns raised by the Delegated Powers and Regulatory Reform Committee and Members in the other place relating to Parliament’s ability to scrutinise updates to the list. Amendment 91A will enable regulations to reflect automatically the countries identified by the FATF as having significant shortcomings in their anti-money laundering and counterterrorism financing regimes. In an event where the obligations under the regulations were to include or exclude any countries—that is to say, should the proposed UK list deviate from the FATF lists—Amendment 92A means that the Government will be required to bring such updates forward through a draft affirmative statutory instrument following a six-month transition period. The amendment will therefore ensure that parliamentary scrutiny of which countries are deemed high-risk is retained, while streamlining the process to ensure that routine updates to businesses are swift and timely to protect themselves and their customers more effectively from exposure to money laundering and terrorism financing.
I ask noble Lords to support the amendments; I beg to move.