UK Financial Institutions: Stolen Assets

– in the House of Lords at 2:57 pm on 6th July 2005.

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Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Deputy Leader, House of Lords, Spokesperson in the Lords, Foreign & Commonwealth Affairs 2:57 pm, 6th July 2005

asked Her Majesty's Government:

How they intend to follow up Labour's election manifesto commitment to "work for faster repatriation of stolen assets from United Kingdom financial institutions".

Photo of Baroness Scotland of Asthal Baroness Scotland of Asthal Minister of State (Criminal Justice and Offender Management), Home Office, Minister of State (Home Office) (Criminal Justice and Offender Management)

My Lords, the Government intend to fulfil this manifesto pledge by the ratification of the United Nations Convention Against Corruption. Ratification now depends on introducing Orders in Council under Part 11 of the Proceeds of Crime Act 2002, which will strengthen and expedite the United Kingdom's ability to assist countries in the freezing, confiscation and return of stolen assets.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Deputy Leader, House of Lords, Spokesperson in the Lords, Foreign & Commonwealth Affairs

My Lords, I thank the Minister for that Answer. We welcomed that clause in the very lengthy Labour Party manifesto. Does she accept that so far the City of London has been very slow in tracing and returning assets stolen from African states, particularly Nigeria, over the past 10 years, and that if we are to see a very welcome surge in Western aid to Africa, we need to be certain that some of it is not leached out again through the City of London illegally?

Photo of Baroness Scotland of Asthal Baroness Scotland of Asthal Minister of State (Criminal Justice and Offender Management), Home Office, Minister of State (Home Office) (Criminal Justice and Offender Management)

My Lords, I thank the noble Lord for his welcome. Of course we accept that there are challenges in tracking the proceeds wrongly removed from countries and returning them to them. We are looking at the issue. I accept the import of the noble Lord's question; namely, that it is important that we have robust mechanisms here and not just in other countries.

Photo of Lord Hylton Lord Hylton Crossbench

My Lords, is it not the case that Nigeria lost some $200 billion, mainly during the Abacha regime; that it took an unacceptably long time to recover those sums, which may not have been wholly recovered; and that at that time this country was reliant on war-time regulations to do anything about it? Has the situation been improved since then?

Photo of Baroness Scotland of Asthal Baroness Scotland of Asthal Minister of State (Criminal Justice and Offender Management), Home Office, Minister of State (Home Office) (Criminal Justice and Offender Management)

My Lords, it has been improved. As noble Lords know, before the Proceeds of Crime Act 2002, the system that was applied was cumbersome and difficult. The whole purpose of the Proceeds of Crime Act was to liberate the procedure, so that we could address the matter in a more appropriate and effective way. We have been able to do that. The amount of money that we recover is greatly improved.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Deputy Leader, House of Lords, Spokesperson in the Lords, Foreign & Commonwealth Affairs

My Lords, I had understood that the Channel Islands were not, for a great many purposes, part of the United Kingdom and, indeed, were Crown dependencies.

When the convention has been signed or ratified by the United Kingdom, will there be implications for further domestic legislation to implement it?

Photo of Baroness Scotland of Asthal Baroness Scotland of Asthal Minister of State (Criminal Justice and Offender Management), Home Office, Minister of State (Home Office) (Criminal Justice and Offender Management)

My Lords, I made it clear in my Answer that the measures would be brought in by way of Orders in Council. We will look very carefully to see whether further legislation might be necessary. At the moment, it does not appear to be, but that scrutiny will continue.

Photo of The Bishop of Chester The Bishop of Chester Bishop

My Lords, given the careful procedures that now apply when new bank accounts are opened, is there a case for applying those procedures to accounts opened in the past, where there is prima facie evidence that they may harbour assets that have been wrongly expropriated?

Photo of Baroness Scotland of Asthal Baroness Scotland of Asthal Minister of State (Criminal Justice and Offender Management), Home Office, Minister of State (Home Office) (Criminal Justice and Offender Management)

My Lords, if an application is made under the Proceeds of Crime Act relating to assets that are the proceeds of a crime, we will, provided that the current legislation applies to those assets—wherever they may be—be able to recover them. It will be crucial to look at the particular facts of a given case to ascertain whether the Act applies.

Photo of Lord Rooker Lord Rooker Minister of State, Northern Ireland Office, The Minister of State, Northern Ireland Office, Deputy Leader of the House of Lords

My Lords, we have plenty of time to hear from both the Labour and the Conservative Benches. Perhaps we should hear first from the noble Earl.

Photo of The Earl of Onslow The Earl of Onslow Conservative

My Lords, I was going to give way to the noble Lord, Lord Tomlinson, before I was so kindly invited to speak.

Will the noble Baroness enlighten me about this example? Let us assume that aid is being given for a large project in Country A and that the Government of Country A say that you have to go through an agent to send out the contract. The agent happens to be the president's brother and charges 50 per cent. In normal practice, anybody would view that as corrupt, but it comes under the heading of something that is legal in that country. How do we stop that sort of habit being normal practice? I believe that running closed agencies with your brother is a source of great corruption in these parts of the world.

Photo of Baroness Scotland of Asthal Baroness Scotland of Asthal Minister of State (Criminal Justice and Offender Management), Home Office, Minister of State (Home Office) (Criminal Justice and Offender Management)

My Lords, for assets to be recovered, there would first have to be a conviction in that country to indicate that the assets had been improperly received. It would be necessary to see whether what was done in that country was, in fact, illegal. Most countries would say that something such as the noble Earl has just described would probably be corrupt, but it would depend on the legislation in that state.

I give that as an off-the-cuff answer. If I am wrong, I shall write to the noble Earl.

Photo of Lord Tomlinson Lord Tomlinson Labour

My Lords, it is clear that the Abacha regime has bled Nigeria dry and that many of those illegally acquired assets are held in the United Kingdom. Is it not seriously regrettable that the United Kingdom has been substantially slower than Switzerland, which is renowned for its banking secrecy, in doing something about that? Talking about proposed Orders in Council does not seem to be a message that conveys the necessary urgency.

Photo of Baroness Scotland of Asthal Baroness Scotland of Asthal Minister of State (Criminal Justice and Offender Management), Home Office, Minister of State (Home Office) (Criminal Justice and Offender Management)

My Lords, I shall deal with the last matter first, the point about necessary urgency. I reassure my noble friend that we are working as hard as we can to make sure that the Orders in Council are brought forward expeditiously. Noble Lords will know that they are complex Orders in Council and will take some time, but expedition is of great importance.

I do not accept what my noble friend said about this country being dilatory about returning money to Nigeria. We of course had to stay within the law as it then was. The United Kingdom provided as much assistance as was possible in the case of Abacha and transmitted documentary evidence to Nigeria in December 2004. No money has been returned to Nigeria from the United Kingdom, although some assets are currently restrained under a civil order. I assure my noble friend that we have done absolutely everything that we properly can.