Clause 54

Terrorist Asset-Freezing Etc. Bill [Lords] – in a Public Bill Committee at 12:30 pm on 23rd November 2010.

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Question proposed, That the clause stand part of the Bill.

Photo of Malcolm Wicks Malcolm Wicks Labour, Croydon North

I know that this is usually a technical clause that goes through on the nod, but recent history shows that territories such as the Channel Islands and the Isle of Man can be the soft underbelly of financial integrity. In the past, there have been cases of money laundering for criminal purposes and tax fraud. We must, therefore, be concerned that some of the territories  might be used by terrorists for placing their assets. Will the Minister go into a little more detail—not too much—about how the Bill’s provisions will be implemented in Guernsey, Jersey, the Isle of Man and the British overseas territories? We can all read the clause, but more detail would be helpful. Is Her Majesty’s Government confident that the provisions will be enforced in all the territories, and will they monitor such enforcement?

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury 12:45 pm, 23rd November 2010

Let me comment broadly on clause 54, which provides for an Order in Council to be made to extend any of the provisions of part 1 of the Bill to the Channel Islands, the Isle of Man or any other British overseas territory. Anyone in doubt about what a British overseas territory is may consult paragraph 12 of the explanatory note, which has an extensive list of those territories.

The clause also provides that certain provisions of the Terrorist Asset-Freezing (Temporary Provisions) Act 2010 shall remain in force until 31 March 2011 in Guernsey, Jersey, the Isle of Man and the various overseas territories. That has the effect of extending, beyond the date specified in the 2010 Act, the validity of the Orders in Council that provide for asset-freezing powers in those jurisdictions. The extension is intended to provide enough time either for the Bill to be extended to those jurisdictions, or for those jurisdictions to enact their own terrorist asset-freezing measures, without there being a gap during which no such measures are in place. We have two choices: we either use Orders in Council to extend the Bill to the overseas territories, or they can use their own legislative mechanisms to introduce the measures under their own regime. Whatever happens, the measures will apply in those jurisdictions.

The right hon. Member for Croydon North talked about monitoring. He will probably be bombarded with letters from the Channel Islands and the Isle of Man, given his comments. Certainly, from my discussions with Ministers from those territories, I know that they take their obligations under international law very seriously, and there is a lot of pressure on those territories to comply with the highest standards of law. The previous Government introduced the Foot review on the compliance of financial services across Crown dependencies and British overseas territories. It made some helpful comments, and has commented on the high state of compliance that there already is in a number of locations. We will make sure that the legislation is extended to the territories and that there are appropriate mechanisms in place to ensure monitoring of compliance with that legislation.

The right hon. Gentleman is absolutely right: it is important that the same standards apply in those places as do here, and we should ensure that those standards stick. I am grateful for this opportunity to provide confirmation of the seriousness with which we view the measure, and to explain how it should be extended to other territories.

Photo of Mike Gapes Mike Gapes Labour, Ilford South

Can I take it that the Minister is not implying that there have not been problems in the past, particularly with certain overseas territories? He referred specifically to the Channel Islands and elsewhere, but  there have been problems. For example, a previous Government had to intervene with regard to the Turks and Caicos Islands. Certainly, the United States has had concerns about some British overseas territories being used for money laundering and other unsavoury activities in the past.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

I do not disagree with that, but I have made it clear today and in previous debates about those territories that we expect them to adhere to the highest international standards. I know that the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), who has responsibility for those territories, shares the same view. We have been crystal clear about the need to comply with those standards.

Question put and agreed to.

Clause 54 accordingly ordered to stand part of the Bill.

Clause 55 ordered to stand part of the Bill.