Trade sanctions

Sanctions and Anti-Money Laundering Bill [Lords] – in a Public Bill Committee at 9:25 am on 27 February 2018.

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Photo of Helen Goodman Helen Goodman Shadow Minister (Foreign and Commonwealth Affairs) 9:25, 27 February 2018

I beg to move amendment 29, in schedule 1, page 49, leave out lines 39 and 40.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

With this it will be convenient to discuss the following:

Amendment 30, in schedule 1, page 50, leave out lines 2 and 3.

Amendment 31, in schedule 1, page 50, leave out paragraph 33.

Photo of Helen Goodman Helen Goodman Shadow Minister (Foreign and Commonwealth Affairs)

May I say what a pleasure it is to see you in the Chair on this bright and sunny, if cold, morning, Mr McCabe? I will not press the amendments, as they are simply a vehicle enabling me to ask a question: on trade sanctions, is there a loophole in relation to the Isle of Man?

Photo of Alan Duncan Alan Duncan Minister of State

I thank the hon. Lady for her question. It is never unhelpful to be able to clarify a point of detail of this sort, and I hope I can now do that to her satisfaction.

Amendments 29 to 31 would cause the Bill to deviate from the established practice in export controls and customs matters where transfers of goods to the Isle of Man are not classified as exports and imports. The Isle of Man is part of a joint customs and indirect tax area within the United Kingdom, and across all customs matters goods transferred to the Isle of Man are not said to be exported from the United Kingdom, and goods transferred from the Isle of Man are not said to be imported into the United Kingdom. That is a long-standing customs arrangement and has been reflected in legislation as well as in custom and practice.

The Isle of Man is integrated into HM Revenue and Customs’ CHIEF—customs handling of import and export of freight—computer system, which enables it to operate UK customs. The Isle of Man mirrors UK export control and sanctions legislation and makes licensing decisions on exactly the same basis as the UK. The amendment, if it were carried, would put sanctions policy out of step with export control and customs. Only goods covered by sanctions legislation would be affected by this change and would in essence be subject to the same export controls twice. If a good were travelling to a sanctioned destination, via the Isle of Man under a licence, it would require one licence from the UK and another from the Isle of Man. The amendment would cause procedural and legal difficulties and increase administrative burdens for business and Her Majesty’s Government, and all for no observable benefit

I hope that I have persuaded the hon. Lady and given a satisfactory explanation in response to the amendment, which in any event she does not intend to press.

Photo of Anneliese Dodds Anneliese Dodds Shadow Minister (Treasury)

Like my hon. Friend, I am grateful to you for chairing the Committee, Mr McCabe.

I am also grateful to the Minister for his explanation. Very briefly, he referred to the Isle of Man’s treatment under the CHIEF system, but we are moving to the contractual disclosure system—CDS—for customs policies. That should have happened by last year, but it has been delayed and there are many concerns about it. Will the Minister assure me that the Isle of Man will be treated properly in any new customs arrangements, and that is the Government’s understanding of the situation?

Photo of Alan Duncan Alan Duncan Minister of State

Although I am not familiar with the exact details of the system the hon. Lady mentions, I think I can say confidently that the Isle of Man will be treated in the way that I described in my previous remarks.

Amendment, by leave, withdrawn.

Schedule 1 agreed to.

Clause 6