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Tag: 2022

  • Margaret Hodge – 2022 Speech on Economic Crime and Corporate Transparency Bill

    Margaret Hodge – 2022 Speech on Economic Crime and Corporate Transparency Bill

    The speech made by Margaret Hodge, the Labour MP for Barking, in the House of Commons on 13 October 2022.

    It is a pleasure to follow the hon. Member for Cheadle (Mary Robinson), who has been a passionate and strong advocate on behalf of whistleblowers and the very important part they play in fighting economic crime, money laundering and fraud.

    Many of us have waited with eager anticipation for the Bill that the Government promised would enable us to rid Britain of the influence of oligarchs and kleptocrats and of the cancer of money laundering, fraud and other economic crime. That is particularly true of the large and ever growing group of Back Benchers who are working together across the House on these issues. Although we all welcome the fact that the Bill is now before us, many of us deeply regret that, yet again, the Government have failed to demonstrate the strategic vision, determination and ambition that are plainly needed if we are to translate our shared aim into reality on the ground and convert our warm words on economic crime into real action. The Bill contains good and important changes, but it does not allow us to make the big leap forward that we need to systematically drive this pernicious and pervasive illegal activity out of our economy and our society.

    Let me remind Members why tackling economic crime really matters. Bluntly, the cost to the UK economy is immense. People have talked about the figure of £290 billion a year, but a recent study by the University of Portsmouth gives us a figure just short of £350 billion. The mind boggles. That is somewhere between a quarter and a third of total public spending every year. It is the enormity of the sums that gives the UK the shameful and dubious distinction of being the jurisdiction of choice for oligarchs, kleptocrats and criminals around the world—people who choose us to hide and launder their ill-gotten gains.

    Governments of both the main political parties have long championed the UK’s financial services, and the success of our financial services has contributed significantly to economic growth over recent decades. We boast of our professionals, our institutions, a trusted legal jurisdiction, the English language, an attractive property market and the lure of London as a place in which to live and work—all things that help to create a vibrant financial services sector. At the same time, though, our weak regulations, our woefully inadequate enforcement capability, our relationship with the UK tax havens in the Crown dependencies and overseas territories, our lack of transparency and our deficient accountability protocols have meant that it has become all too easy to wash the dirty money along with the clean here in Britain.

    The human impact of this is beyond awful. We have all seen the horrific, heartbreaking images of Putin’s vicious assault on Ukraine and the effect that it is having on innocent Ukrainians. However, we must face up to the understanding that the dirty cash is laundered and cleaned by Putin and his kleptocratic friends both in and through the UK. Ukraine is now paying the price for corruption and economic crime. We are helping to enable Putin’s assault. Our corporate structures, our lawyers, bankers, company service providers and accountants, and our links with places such as the British Virgin Islands all facilitate the accumulation of stolen wealth and power that helps to fuel the criminal onslaught on an independent nation and its people.

    We have allowed that to happen. It is an utterly appalling truth that, since Putin came to power more than 20 years ago, there has not been one single prosecution for economic crime launched against any individual Russian oligarch—not one. Similarly, the explosion of fraud in Britain has led to endless instances of misery and harm, which other Members have cited. The authorities, as my right hon. Friend the shadow Home Secretary said, reported 5.1 million incidents of fraud in the year to September 2021, and we know that much fraud remains unreported. The published figure means that at least one in 11 adults were the victim of fraud in that year. People such as Len, who, at the age of 96 and with a proud record of service in the Army and a successful career as a chartered surveyor, was getting 600 scam communications a month. Although he did not keep track of his total losses, he knew that in one 10-day period he had spent and lost £600. It is the lack of enforcement action that contributed to Len’s misery and that has allowed fraud to spiral into the most common crime in Britain today.

    The Government are absolutely right to bring forward legislation. In fact, I would argue that if we do not eradicate money laundering, fraud and other economic crime we will cause lasting damage to our financial services sector, because we will lose our reputation as a trusted jurisdiction, and the plentiful supply of clean money across the world will go to other more reputable countries. We will lose business, not attract it. Britain can never enjoy sustained economic growth on the back of dirty money.

    I welcome the good and important changes the Bill will bring about when it is passed into law. The reform of Companies House, which other hon. Members have talked about, is warmly welcomed and hugely important. None of us wants more regulation, but we do need much smarter regulation, and that is what these provisions aim to achieve. We need to tackle and stop scandals such as the Danske Bank scandal, where an Estonian branch of the Danish bank allowed $8.3 billion of suspect payments to move through the bank using British registered companies. Many of those companies were limited liability companies, and we now know that 90% of the more than 800 limited liability companies involved in the scandal were set up by one rogue company service provider and registered at the same address in Birmingham. We need to stop the practices that meant that in the FinCEN files leaks 3,267 UK shell companies were named—more than in any other country. We need to tackle the reasons that led to Transparency International’s finding in a 2017 investigation that 766 UK shell companies were involved in corruption and money laundering cases worth up to £80 billion, with half of those 766 companies registered at just eight different addresses.

    Kevin Hollinrake

    The right hon. Lady is making a fantastic speech, and it is always a pleasure to listen to her and to work so closely with her from our respective positions on the Back Benches. She refers to Danske Bank; the total amount of money laundering through that Estonian branch was €200 billion, much of it Russian money from kleptocrats moving the money out of Russia. The bank has not been fined yet. It will probably get a fine of £2 billion or £3 billion, but the likelihood is that not a single individual will be held to account. That is absolutely wrong. Fines are seen as a cost of doing business. I know she agrees that we need to extend the failure to prevent an offence to include economic crime and things such as false accounting, and we must have individual directorial responsibility.

    Dame Margaret Hodge

    Hear, hear! I completely concur with the hon. Gentleman, and it is a real pleasure to work with him on all these matters. He is completely right. The interesting thing about Danske Bank is that, were there to be any prosecutions, they would not happen in the UK. They might happen in other jurisdictions, particularly America, but they will never happen in the UK because of the weakness of our enforcement agencies.

    The provisions in the Bill are essential to help tackle some of the wrongs in the examples I have given, but I hope the Minister will assure the House when he winds up the debate that he will seriously consider amendments that we intend to table to strengthen the reform of Companies House and prevent potential loopholes. I also welcome the proposals to allow organisations such as banks to share information where that could help to prevent or detect wrongdoing, and the proposals to treat cryptoassets just like cash or any other assets for the purposes of seizure and enforcement.

    However, the Bill too often tinkers with the challenges at the margin instead of boldly adopting a more holistic and systemic approach to bearing down on dirty money. For example, instead of proper and much-needed reform of the supervision of the professional enablers who are responsible for implementing anti-money laundering regulations, we get new cost caps for the Solicitors Regulatory Authority and new powers for the Legal Services Board—piecemeal reform, not systemic reform.

    Instead of reforming the present outdated criminal offences in relation to the responsibilities of companies and their directors to prevent economic crime, which the hon. Member for Thirsk and Malton (Kevin Hollinrake) referred to, so that we can really hold those who enable, facilitate or collude with economic crime to account, we get new pre-investigation powers for the Serious Fraud Office—important, but piecemeal reform. Instead of a systemic reform of the broken suspicious activity reports regime, we tinker at the edges by reforming part of the regime, the defence against money laundering SARs—again necessary, but yet another example of the piecemeal approach being taken.

    Not only does the Bill tinker at the edges; it also fails to address key matters that are all vital to a comprehensive approach to preventing, detecting and punishing money launderers and fraudsters. Where are the proposals to seize, as well as freeze, the assets taken from sanctioned individuals and states? We want the money that Putin and his kleptocratic cronies stole from Russia to be used to fund the reconstruction of Ukraine. We need similar powers to those that already exist in other European countries such as Italy and in nations across the world such as Canada.

    Where are the proposals for a sustainable funding regime for the enforcement agencies, so that they can use the powers they have? For instance, as the hon. Member for Glasgow Central (Alison Thewliss) stated, the cost of registering a new company with Companies House is a mere £12. It would still be a bargain at £50 or £100, with the extra income ringfenced to fund Companies House properly.

    Where are the proposals to do away with the requirement that our enforcement agencies pick up the tab for the legal costs incurred by individuals who succeed in resisting a prosecution for economic crime? The US enforcement agencies, which are far more successful in securing convictions, do not have to pay the costs of the person prosecuted if they lose a case. We should follow that example. Our system acts as a brake on our enforcement agencies. They fear the financial costs of losing, so they fail to prosecute aggressively, and because of that fraudsters, criminals and money launderers get away with awful actions.

    Where are the proposals, which the hon. Member for Cheadle called for in her contribution, to protect the brave whistleblowers on whom we are so dependent? Where are the proposals to ensure accountability to Parliament and the public, so that we can see whether our reforms deliver? Where are the proposals to tackle the abuse of our defamation laws by oligarchs who want to silence those of us wanting to hold them to account? Where are the proposals to close the loopholes on transparency for trusts and the ownership of land, which continue to act as secret ways to launder money into or through the UK? Where are the reforms to the SARs regime, to the supervision of AML supervision or to corporate criminal liability laws?

    In the wake of the 7/7 attack in Britain, we treated the reform of counter-terrorism as a mission requiring strong and comprehensive action, and we are now rightly proud of our capabilities in that area. The war in Ukraine should be our 7/7 moment in the battle to eradicate dirty money. It has helped us to understand the horrors that allowing illicit finance to infect our financial services sector, our economy and our society can bring, both at home and abroad.

    This Bill is a once-in-a-generation opportunity to put things right. We cannot and must not waste it. I look forward to working with my colleagues across the House and with Ministers in Government to achieve our shared and crucial objective: to show that we are a country that consistently demonstrates zero tolerance for all illicit finance and is determined to grow a strong, trusted financial services sector in a jurisdiction that boasts the smartest regulation, first-class enforcement of the rules, maximum transparency and strong accountability. There lies the way to economic growth.

  • Mary Robinson – 2022 Speech on Economic Crime and Corporate Transparency Bill

    Mary Robinson – 2022 Speech on Economic Crime and Corporate Transparency Bill

    The speech made by Mary Robinson, the Conservative MP for Cheadle, in the House of Commons on 13 October 2022.

    It is a pleasure to be called to speak on Second Reading of this important Bill.

    To maintain the UK’s role and reputation as an international banking and business hub, we must have a transparent system with robust defences against money laundering and fraud, backed up by legislation. As we have heard, the Bill introduces vital reforms to Companies House and to limited partnerships. It also brings forward measures to ensure that law enforcement is equipped to handle the modern challenge of cryptoassets. We have to keep pace with the inevitable changes that result from the development and recognition of cryptocurrency as it moves from niche technology to the mainstream. It is a policy area that poses a unique challenge to law enforcement, with constantly evolving technology creating intangible assets that are largely unregulated and increasingly used to hide and move the proceeds of crime and enable malign states.

    The value of losses from crypto-related scams reported to Action Fraud more than doubled over the previous year to £190 million in 2021. All fraud costs the UK economy £190 billion annually, with money laundering constituting an additional £100 billion.

    This is money from hard-working individuals and businesses taken by criminals and used to perpetrate wars and terrorism, and technology is only making that easier for them. The Bill’s stated objective, which I welcome, is as follows:

    “Strengthen the UK’s broader response to economic crime, in particular by giving law enforcement new powers to seize cryptoassets and enabling businesses in the financial sector to share information more effectively to prevent and detect economic crime.”

    Increased powers will bolster the National Crime Agency and Serious Fraud Office, as well as the regulatory bodies, and are welcome. However, the Bill misses an opportunity to refer to and support the important role of whistleblowers in the fight against financial crime. The impact assessment produced by the Department for Business, Energy and Industrial Strategy references PricewaterhouseCoopers’ global economic crime and fraud survey 2022, which found that the UK has a higher than average proportion of serious fraud carried out by an external perpetrator at 57% versus 39% globally. It notes that fighting external perpetrators is distinct from handling internal fraud, with external forces being “immune” to traditional fraud detection and prevention tools—including workplace frameworks and whistleblowing procedures.

    The Government are in the process of reviewing whistleblowing guidance, which is welcome. However, the reality is that existing legislation applies only to employees— not to contractors, trustees, volunteers or many others who might hold vital information. It is estimated that just over 40% of fraud is detected through whistleblowing tips, and only half of those disclosures come from employees.

    By their very nature, money laundering and economic crime are more often than not linked to serious organised crime gangs and hostile states. Without adequate protections, the stakes for an informed insider blowing the whistle are simply too high. With cryptoassets existing outside the realm of a centralised or governed system, it is unlikely that anyone with information about financial crime involving them will be employees, and therefore they will not be covered by the provisions of the Public Interest Disclosure Act 1998, which is the one that oversees the protections of whistleblowers.

    If protections are not to be afforded in this Bill, I hope the Government will support the aims of the all-party group on whistleblowing, which I chair, to create an office of the whistleblower to provide overarching protection for the very people we need to speak out and uncover the criminal activities that this Bill aims to curtail.

    I welcome this important Bill, and I know that it will receive support. There are changes that could be considered, particularly with regards to whistleblowing, so I look forward to seeing the Bill go through to Committee.

  • PRESS RELEASE : Ancient mystery of European eel migration unravelled to help combat decline of critically endangered species [October 2022]

    PRESS RELEASE : Ancient mystery of European eel migration unravelled to help combat decline of critically endangered species [October 2022]

    The press release issued by the Department for the Environment, Food and Rural Affairs on 15 October 2022.

    • Environment Agency’s world-first research will help combat dramatic decline of the critically endangered European eel
    • Adult European Eels tracked to the Sargasso Sea for the first time, unravelling a mystery that has perplexed scientists for centuries
    • Journey of the European Eel to its spawning area considered one of the most impressive feats of animal migration observed in nature

    A team of researchers led by the Environment Agency have taken a major step forward in solving one of nature’s most enduring mysteries – where do European Eels spawn and how do they get there?

    Having suffered a 95% decline in numbers returning to Europe’s rivers since the 1980s, the European Eel is now a critically endangered species.

    But ground-breaking research published this week enables us to better understand the lifecycle of this globally important but little-known species and ensure effective protection measures are put in place to combat their decline.

    Project lead and Environment Agency researcher Ros Wright said:

    The European Eel is critically endangered so it is important that we solve the mystery surrounding their complete life-cycle to support efforts to protect the spawning area of this important species.

    This is the first time we’ve been able to track eels to the Sargasso Sea and we are delighted we have the first direct evidence of adult European eels reaching their spawning area. Their journey will reveal information about eel migration that has never been known before.

    The journey of European eels to their breeding place in the Sargasso Sea is up to 10,000km and considered one of the most impressive feats of animal migration observed in nature. It’s a mystery that has perplexed scientists for centuries, with the first recorded evidence of scientists looking into this phenomenon dating back to the 4th century BC.

    Working alongside the Zoological Society of London, Defra, Cefas, Natural England, the University of Azores and the Denmark University of Technology, the Environment Agency has produced the first ever direct evidence of European eels navigating the last 2,500km leg of their journey. Up until this point, no eggs or eels had been found to confirm this spawning ground.

    Back in December 2018 and 2019, researchers fitted 26 large female European eels with satellite tags and released them from the Azores into the Atlantic Ocean. The Azores islands are close to the furthest known point on the eel migration route that was tracked by previous projects.

    Programmed to detach and transmit their data after 6-12 months, data were received from 23 satellite tags at various stages of the journey, with six tagged eels reaching the Sargasso Sea. Data transmitted from these tags reveal the eels migrated consistently towards the Sargasso Sea and, remarkably, that this journey to their breeding grounds takes over a year.

    Once eels spawn in the Sargasso Sea, their larvae return to the UK and other European waters via a different route, carried on ocean currents on the North Atlantic Drift. They then migrate into rivers as glass eels.

    Unravelling the navigation mechanisms, routes taken and locating where eels spawn is critical for understanding the reasons behind their decline and putting in place targeted conservation measures to protect this globally important species.

    Chair of the IUCN Anguillid Eel Specialist Group, Matthew Gollock from the Zoological Society of London said:

    Populations of the European eel are at a historic low and the more we understand their life-history, the better we are able to develop conservation measures to address the critical status of the species.

    Professor José Manuel N. Azevedo from the University of the Azores said:

    This discovery emphasizes the role of the Azores in the life cycle of eels. It will help scientist and conservationists to push for measures to restore eel habitats across the archipelago.

    The Environment Agency and partners will now conduct a deeper analysis of the satellite tag data to uncover further clues on how eels navigate to their spawning area. This is part of an ongoing project and field teams have returned to the Azores to satellite tag eels with extended life tags to reveal more data on silver eel migration and spawning sites in the Sargasso Sea.

    The Environment Agency continue to carry out research on all life stages of the European eel to inform conservation measures. This complements work around England to protect eels, for example improving eel pass design to enhance upstream eel passage into our rivers.

  • Alison Thewliss – 2022 Speech on Economic Crime and Corporate Transparency Bill

    Alison Thewliss – 2022 Speech on Economic Crime and Corporate Transparency Bill

    The speech made by Alison Thewliss, the SNP MP for Glasgow Central, in the House of Commons on 13 October 2022.

    I am glad to follow the right hon. Member for East Hampshire (Damian Hinds), whom I believe was the Minister who said he was not happy with the progress that had been made on tackling economic crime thus far. None of us in this place are happy about the situation on economic crime.

    SNP Members of course welcome this Bill, which is overdue. Many of its aspects could have been picked up in legislation years ago. Members of the anti-corruption coalition across the House have been clear in calling for more action from the UK Government on this, and all this delay has cost us very dearly; openDemocracy believes that economic crime across these islands costs us £290 billion a year—just think of the services we could all be enjoying if that money were not being plundered by those people engaging in economic crime. As with all things around dirty money, we have to ask: who benefits from this? Who benefits from action not having been taken for all these years? There is much to be done, and the panoply of agencies involved must be properly co-ordinated and resourced to tackle it.

    This is a big Bill and there is a lot more that could be said. My not saying something in particular now does not discount my saying something about it later, when the Bill goes into Committee. I thank everybody who has sent briefings ahead of this Bill, because that has been incredibly useful.

    The UK Government must go after not only those committing economic crimes, but those enabling it. Robust supervision and proper deterrents need to be in place for those responsible for economic crime. Directors and enablers of economic crime need to face proportionate sanctions, and effective anti-money laundering supervision needs to be carried out consistently across sectors. Legislation on economic crime needs to be futureproofed, as a failure to ensure that means that legislators are always playing catch-up with criminals. We see that particularly in the field of crypto.

    As Companies House reform is a significant part of this Bill, I will start with a few red flags from the UK Government that I would like to deal with straight up. Having lots of companies on the Companies House register is not the win that Ministers often seem to think it is, mainly because a good chunk of the register is absolute guff. It is like a kid in the playground with an impressive looking pile of football stickers for swapsies; but instead of getting an easy trade for the Kevin van Veen of your dreams, you find that the kid has a pile of doublers, triplers, old stickers from previous seasons, stickers from rugby and cricket, a few with Stormtroopers on and some they have drawn themselves. Sorting out that pile of stickers is pretty easy, but sorting out the millions of companies on the Companies House register is a much tougher task. Even the Department for Business, Energy and Industrial Strategy impact assessment, which I would draw everybody’s attention to, hints at the difficulty in unpicking the duplicates from the system. It is riddled with error, never mind the impact of those using it for nefarious purposes.

    Having looked myself up on the register, it appears that I am on it three times; three different Alison Thewlisses exist out there in the world—just imagine that! The register believes I am three separate people, rather than the same person having been a director at different points in my life. The Home Secretary, who, disappointingly, has disappeared out of this place before hearing from the third party in this House, is on the register in her own name and in her maiden name, with no link to suggests that we are talking about the same person. The BEIS Secretary is on it as the director of 11 companies with his surname hyphenated and a further three companies with it unhyphenated. I am unclear what the process is by which Companies House will set about tidying up this basic type of messiness within its register. It should not just be put on individuals to fix this; there needs to be some mechanism by which it is all corrected.

    The new objectives being given to Companies House are welcome—they are a step up from its being a passive recipient of duff information—but it is unclear how exactly they will work. The querying power must be a wider, separate piece of work to pick through in detail the existing register and figure out what is actually valid, rather than relying on helpful citizens such as Oliver Bullough, Graham Barrow, Richard Smith and David Leask to report in their concerns, as they often do.

    Peter Grant (Glenrothes) (SNP)

    There is, of course, only one Alison Thewliss. She mentioned Graham Barrow as one of a number of exceptional individuals who do a lot to expose the kind of things going on at Companies House that it should really be doing. I do not know whether she has followed his Twitter account recently. On 10 October, he tweeted that Companies House had just accepted the registration of a business called “Legat Business Limited”, which has a single director, called “Andrei Perezhogin”. His nationality is “Russian”, his place of residence is “Russia”, and he describes his occupation as “Men”. He claims to have set up this company with £100 million of capital. Does she share my alarm that it appears that a Russian living in Russia can invest £100 million in a British company and—this is without the powers in this Bill—nobody at Companies House thinks anything of it?

    Alison Thewliss

    I absolutely agree and share my hon. Friend’s concerns. Graham Barrow does great work on Twitter and in other places to highlight such scenarios. Whether or not that person exists, whether or not that company is valid, and whether that money is even being invested anywhere, never mind in this company—this exposes the nature of the garbage in the Companies House register. The Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Watford (Dean Russell) should consider what he intends to do about that situation, because the register also contains abusive names and people being registered when they do not know they have been registered. How do such people go about correcting the register where companies have been registered in this way without their knowledge or consent? Home addresses are being used although the person who lives there has no knowledge that their address has been used until a whole wheen of paperwork from Companies House arrives at their door. These things are being regularly exposed; they should not come as news or as any surprise to Companies House or to Ministers in this place. In the interim between this Bill making progress through the House and its eventually coming into force, what will happen to stop these “companies”? They are among the thousands of companies registered every week at Companies House.

    The power to query company names where people might be setting them up to impersonate another company or for criminal purposes stands in contrast with the continued objective to allow companies to turn around their registration in 24 hours. There is a substantial industry in creating fake but similar names, and then using those companies to rip off the public. Without a vast increase in staffing in Companies House to assess and sense-check all these applications coming in, it seems that many will continue to slip through the net, even after these reforms. I suggest to the Minister that perhaps it would be better to build in a slightly longer application period to allow proper verification to take place. It is unclear—I seek confirmation from the Minister—whether the verification that is being referred to will be though the existing UK Government verify scheme used for passports, driving licences and tax returns, or whether a separate verification scheme will used. Using the existing schemes seems to work reasonably well for passports, driving licences and tax returns, and I am not aware of any particular issues being flagged for those—if there are, I shall stand corrected.

    The BEIS impact assessment dismisses the opportunity to verify the link between directors or persons of significant control and their companies. Again, this should be changed. Furthermore, we have a golden opportunity here to clamp down on opaque ownership structures and I cannot understand why the Government would not want to do so. The Bill must bring in provisions that prevent all companies from being controlled by opaque offshore entities, which do not need to disclose information on their owners or structures because of where they are based.

    I still seek to understand from the Ministers why Companies House cannot be an anti-money laundering supervisor in its own right; this is a huge gap within the system. The Office for Professional Body Anti-Money Laundering Supervision has had mixed results in holding the AML supervisors under its wing to account; professional bodies have not done all they can to interrogate their members. That would perhaps fall into the area of a failure to prevent offence. Culpable directors, senior managers and other enablers of economic crime, including professional enablers, need to face sanctions, and rules on AML supervision need to be applied consistently. That is not currently happening.

    The non-governmental organisation Spotlight on Corruption noted that there are 22 industry bodies that currently oversee AML compliance in the legal and accountancy sectors. In 2021, OPBAS found that just 15% of supervisors were effective in using predicable and proportionate supervisory action; 85% were not. It also found that just 19% had implemented an effective risk-based approach to supervision. This disjointed approach to tackling money laundering is just not working: it is allowing too many to sail through the net.

    In the UK, an estimated £88 billion of dirty money is cleaned by criminals every year, compared with the lesser, but still significant, amounts of €54.5 billion in France and €51.53 billion in Germany. To tackle the issue, it is vital that support is offered to smaller firms, which are often targeted by those who wish to engage in money laundering, criminality and other illicit activities, to enable such companies to spot red flags in respect of potential clients.

    It is beyond me why the UK Government allow the verification process for company registration to be carried out by company formation agents when they are the very bodies that have to a large extent created the problem that the Government are trying to solve. As the Home Office report “National risk assessment of money laundering and terrorist financing 2020” pointed out:

    “Company formation and related professional services are…a key enabler or gatekeeper of TBML”—

    trade-based money laundering. We should be reducing their power, not endorsing it.

    Under the Bill, all third-party agents who set up a company on behalf of someone else will be required only to declare that the information they are providing on behalf of that person has been verified. I return to my verification question: what is the system for that? Without giving Companies House the ability to carry out independent checks to ascertain whether the “verified” third-party information is correct, it is just going to become a box-ticking exercise. The verification requirement in itself has no teeth and is unlikely to lead to any material change in how third-party agents carry out that key verification process.

    Before I leave Companies House, I should say that I am deeply disappointed that the UK Government seem to show no willingness to increase the ridiculously low company registration fee: £10 or £12 is nothing in the scheme of things. In Germany the equivalent fee is €400, and in the Netherlands it is around €52; I am sure the Minister would regard neither country as anti-business. Having a low fee is not the benefit that Ministers seem to think it is. I am open-minded as to what the figure ought to be, but in its economic crime report the Treasury Committee agreed that £100 would be perfectly reasonable and give Companies House more resources to deal with the huge challenges it faces.

    Improving relations between Companies House and the various law enforcement agencies is welcome. The Treasury Committee report on economic crime called the landscape “bewildering” and noted that both co-ordination and economic crime itself should be higher priorities for the Government. The scale of the issue is outlined in the BEIS impact assessment, with law enforcement referrals to Companies House rising from 1,400 per annum in 2015 to 9,300 in 2021. Given that we have heard how little economic crime is actually prosecuted, this feels like the tip of a very large iceberg.

    With talk of future austerity and cuts, it is important that the UK Government invest in the enforcement agencies to investigate and prosecute economic crime. It is a specialist area and it requires well-paid specialist staff to tackle this scourge. The Scottish crime campus at Gartcosh is a great example of both efficiency and inter-agency working, but it can do this only if properly funded. A further round of Westminster austerity puts it all at risk.

    I feel like I have been raising Scottish limited partnerships forever, and I have no hesitation about doing so again. Because SLPs hold legal personality and can possess property, they have become a very popular mechanism. The BEIS analysis was quite stark: between 2010 and 2016 they had a growth rate—one that the Government would love—of 459%. That alone should have set off alarm bells from Companies House to the Government Front Bench, but nothing terribly much happened for a long time. BEIS figures also state that as of 31 March 2021, SLPs made up 64% of all limited partnerships on the Companies House register. If we compare that with the fact that companies registered in Scotland make up just 5% of companies in the UK, we can see that something is badly out of whack.

    SLP registrations have plateaued since the rules were tightened, but they have not gone away. They have also continued to be implicated in money laundering, arms running and sanctions busting, including in respect of the Russian aggression against Ukraine. They are set up with partners in secrecy jurisdictions, with companies named as persons of significant control, which is against the rules. Linking to an actual person with an actual address would be progress, as would limiting the number of times that an address or person could be a company director. To date, enforcement and fines for breaching the rules that the Government themselves set up have been few and far between. There is little point in having rules that are just not enforced.

    As I have pointed out before in this place, there are also knock-on effects to our neighbours in Ireland. As there has been a slight tightening of the rules here, registrations of Irish limited partnerships have soared. What conversations has the Minister had with his counterparts in the Republic to ensure that we are not just shifting criminal activity from here to there? All possible co-operation must be undertaken to avoid criminals shifting their business over the sea.

    I wish to ask about the links with other legislation that is currently going through this place. The Financial Services and Markets Bill has a significant section on the regulation of cryptocurrencies, which have become incredibly popular with organised crime incredibly quickly, as a means of shifting money as well as of scamming naive members of the public. It is unclear how the legislation before us interacts with that Bill and the halo effect that might be created by the regulation of certain cryptoassets but not others.

    When the Treasury Committee took evidence on the Online Safety Bill—which has disappeared but will hopefully come back at some stage—we were concerned about crimes being carried out via the internet and social media platforms. Currently, the banks of those who are scammed have to pay up, but the social media companies themselves are not held accountable. For example, scams conducted over Instagram or Facebook Marketplace, scam messages sent over WhatsApp and unregulated financial advice given via platforms like TikTok are not currently covered. They should be given an awful lot more attention.

    I was glad to hear from the Home Secretary that there have been some conversations with the Scottish Government about the implications of this legislation in Scotland, because Scots law is, of course, a devolved area. Registers of Scotland administers the register of persons holding a controlled interest in land, which was launched on 1 April and shows who controls the decisions of owners or tenants of land and property in Scotland. I would like a bit more information from the Government about the conversations they have had with Registers of Scotland and the interaction with the register of oversees entities. Scotland did not hang around waiting for the UK Government to make legislation on this issue; we got on with the job.

    I look forward to tabling amendments to try to improve this Bill, and I really hope that for once the Government will listen and be constructive on some of the issues we raise. We would not be in the situation we are in today had they done so during the debates on the Sanctions and Anti-Money Laundering Bill or umpty other bits of legislation over the years. We are all clear in this place that robust supervision and proper deterrents need to be in place for those responsible for economic crime.

    We on the SNP Benches are looking forward to independence and setting up our own robust systems to register companies and to prevent economic crime. Nobody would choose the UK system as it stands, and it remains to be seen whether it can be adequately repaired.

  • Damian Hinds – 2022 Speech on Economic Crime and Corporate Transparency Bill

    Damian Hinds – 2022 Speech on Economic Crime and Corporate Transparency Bill

    The speech made by Damian Hinds, the Conservative MP for East Hampshire, in the House of Commons on 13 October 2022.

    I support this important Bill, which seeks to tackle this most international of criminal problems. The scale of global financial crime is mind-boggling, accounting for up to 5% of gross world product and, depending on which estimate we look at—we cannot say absolutely for certain—worth between $2 trillion and $5 trillion. On an optimistic view, the confiscation rate runs at around 1%.

    Economic crime is sometimes thought of as being in a separate category from other crime but, no, it is part of those other crimes. There is a particularly close link between fraud and cyber-crime. Money laundering, fraud and cyber-crime collectively—distance crime—make up the majority of crime by volume in this country. More broadly, virtually all crime with a financial motivation touches on money laundering at some level. There is a mix of organised crime groups pulling off huge cyber-crimes, down to individually small but cumulatively very large-volume frauds. Some groups have undergone a sort of vertical integration, controlling every part of the chain; others specialise in one particular part of the chain, such as ransomware as a service. There is a merging of criminal actors with a nexus to states. Then, of course, there are the kleptocrats who got filthy rich on plunder from their fellow citizens.

    There is a huge amount that needs to be done in this area. Much of it needs to be done globally, but countries such as ours need to be in the lead. The world has made quite some progress in this area, and in key aspects we have been a leader, but we have also had our lacunae. High on that list is transparency about who is really behind and ultimately benefits from corporate structures and economic assets.

    For some time, we have had a substantial and, in many ways, effective architecture to tackle money laundering, but there is an important question whether the suspicious activity reports regime is sufficiently efficient, and whether it is focused enough to make the most difference while minimising dead-weight. There is also the question whether we are fully harnessing the power and capabilities of banks, particularly if we compare our legislation with section 314(b) of the American Patriot Act. Should there be more direct intelligence sharing between banks, and if so, how do we manage the competition policy aspects of that? Finally, however much we improve and innovate, the criminals are doing the same, with ever more sophisticated technology, and they are increasingly bypassing the systems that we have been used to in the past by using cryptocurrency and cryptoassets.

    The most important thing about the Bill is that it moves to plug the transparency gap, with reforms to Companies House and limited partnerships as its backbone. It modernises seizure by bringing cryptoassets into scope of the civil forfeiture powers, and it moves from a compliance-driven anti-money laundering system to one that is more proactive and intelligence-led, with rationalised SARs and DAML—defence against money laundering—requirements.

    I welcome all the aspects of the Bill, but especially the information-sharing provisions, and in particular their broad scope to include all types of economic crime, including, importantly, volume fraud. I ask the Home Secretary and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Watford (Dean Russell), to really test whether these powers go as far as they productively can. I press not just the Home Office and BEIS Ministers we have here today, but the Treasury, regulators and the private sector, to come together to ensure that we link up the different parts of our financial services sector and the wider professional services sector to best effect.

    Information and intelligence sharing could be so much more powerful if we reformed the way that payments are made so that in certain circumstances, where suspicious activity is detected, it is possible to slow down or pause payments and use the system not just to track down money laundering payments or fraudulent payments after the fact, but to stop them happening before the fact. That could be a genuine game changer. As I say, I strongly encourage the two excellent Ministers present today to communicate with the Treasury and others about that.

    I support the Bill and I wish Ministers well with it. It is of course part of a wider set of reforms that includes the sanctions regime, the creation of the National Economic Crime Centre, the kleptocracy cell, the overall economic crime plan, and, importantly, our international work with like-minded partners, the Financial Action Task Force, and the Crown dependencies and overseas territories. The reform of visas, which came up, is part of this too, and of course we recently passed the Economic Crime (Transparency and Enforcement) Act 2022. There will be more to come, I am sure, including on corporate criminal liability.

    Kevin Hollinrake rose—

    Damian Hinds

    On that point, I give way to my hon. Friend.

    Kevin Hollinrake

    I am very supportive of that, as my right hon. Friend knows, but I rise to make another point. He mentioned that putting some friction in the payments system might reduce instances of economic crime. At the moment, banks are refunding a much higher proportion of authorised push payment fraud, but all the onus is on the sending bank. Nothing is reimbursed by the receiving bank, yet it is the receiving bank where the dodgy account is held. Does he agree that we should look at that and create an incentive for the companies that host those bank accounts to tackle it more effectively?

    Damian Hinds

    I do think we need to look at this more closely, although it is even more complex than my hon. Friend suggests, because we get this ping-on system as well, where a body can be both a receiving bank and a sending bank, and so be a sort of transmission mechanism. We certainly need to look at this more broadly. Madam Deputy Speaker might get cross with me if I try to unpack it too much now, because it is a broader subject. However, as my hon. Friend rightly mentioned, we also have to address the questions of who is liable and how much of the liability now sits within the banking sector, full stop, as opposed to other parts of the consumer interface—different channels through which people come—that might reasonably be expected to share some of that burden too and be properly incentivised.

    I am going to close my remarks by saying that these reforms are important and they are not in tension with the success of our financial services sector—quite the reverse. These reforms are about enhancing the reputation of both British financial services and, more broadly, the UK and our reliance on and respect for the rule of law. They are about protecting and growing our business; and doing the right thing, ceding no space to the criminals and the kleptocrats. In the unlikely event that we divide this afternoon, I will be proud to vote “Aye” for this Bill.

  • PRESS RELEASE : Supporting survivors of violence and abuse in Scotland [14 October 2022]

    PRESS RELEASE : Supporting survivors of violence and abuse in Scotland [14 October 2022]

    The press release issued by the Scottish Government on 14 October 2022.

    A new fund for those affected by violence against women and girls has supported nearly 20,000 survivors in its first six months.

    The Delivering Equally Safe (DES) fund provided £9.5 million to 121 projects in its first six months. These projects give one-to-one emotional and practical support, as well as refuge, legal or financial advice and other services. Many of the organisations also run training and outreach programmes aiming to prevent violence against women and girls.

    Equalities Minister Christina McKelvie visited the Saoirse project in Blantyre, run jointly by the charities WASLER and Liber8, to learn how it supports women in Lanarkshire who have been affected by both substance use and domestic abuse.

    Ms McKelvie said:

    “The projects supported through our Delivering Equally Safe fund offer a lifeline to survivors of violence and abuse. Tackling violence against women and girls is a core priority for the Scottish Government, and this fund is a key element ensuring innovative projects can support survivors and tackle the root causes of violence and abuse.

    “I have been moved and inspired by conversations with the women supported by Saoirse. By bringing together specialist services for both domestic abuse and substance use, Saoirse targets the multiple, complex issues that these women may be going through, helping them rebuild their lives.

    “This is just one of 121 projects across Scotland that we are supporting through this fund. I am deeply grateful to all the organisations involved for the extraordinary work they do, and for supporting 20,000 survivors in just six months.”

    Heather Russell, Chief Executive of WASLER (Women’s Aid South Lanarkshire and East Renfrewshire), said:

    “The importance of funding and sustainable funding for our sector cannot be understated. Limits on service delivery and development of services to meet the true needs of women, children and young people we support is a daily grind. It makes the funding of our Saoirse service all the more essential.

    “Delivering Equally Safe funding has allowed us to partner two distinct specialisms to develop a needs-led initiative. In bringing together specialist domestic abuse and substance use support services we are able to provide holistic support for women facing multiple and complex challenges.

    “The very decision to fund this new partnership illustrates a strategic understanding of domestic abuse and its dynamics. Without DES funding we simply would be unable to deliver prescribed support to women who through no fault of their own need it. Gender-based violence is a threat to the lives of women and girls. Any funding for specialist organisations to support recovery and empowerment of those women is another life saved.”

    Kaylie Allen, Director of Funds, Inspiring Scotland, said:

    “Organisations funded through Delivering Equally Safe deliver vital support for people experiencing gender-based violence alongside crucial education and prevention work.

    “We are proud to work with this diverse group of organisations as Fund Managers for the Scottish Government, and are pleased the immense work of the funded groups can be acknowledged through this report. We want to thank funded groups for their hard work reporting on the impact of their activity.

    “The learning gained from their reporting confirms not only the difference they are making to the lives of women and children across Scotland, but also the increasing demand for the services they offer.”

  • PRESS RELEASE : Supporting innovation and knowledge sharing in Agriculture [October 2022]

    PRESS RELEASE : Supporting innovation and knowledge sharing in Agriculture [October 2022]

    The press release issued by the Scottish Government on 13 October 2022.

    Projects receive funding through Knowledge Transfer and Innovation Fund.

    A range of projects aimed at tackling climate change and enhancing competitiveness in the agriculture and food production sectors have received funding of more than £370,000.

    The seven awards are part of the Knowledge Transfer and Innovation Fund (KTIF) with funding focussed on projects which help maximise resource efficiency, cut emissions and enhance viability.

    These KTIF projects support knowledge transfer and learning, as well as innovative on-the-ground improvements in agricultural competitiveness, resource efficiency, environmental performance and sustainability.

    Rural Affairs Secretary Mairi Gougeon said: “We have ambitious targets across the agricultural sector in terms of net zero goals, enabling the essential role of agriculture and addressing the need for food security.

    “These are issues that affect us all and investment in these successful projects will contribute to meeting these targets.”

    Background

     

    The successful projects are:

    Project 1: ‘Data driven decisions in Potatoes’ facilitated by Scottish Agricultural Organisation Society (SAOS). KTIF Award – £36,095.00.

    Overview: This knowledge transfer based project seeks to improve the productivity and competitiveness of Scottish ware growers. To support potato growers to become more productive and sustainable, reducing their impact on the environment/biodiversity.

    Project 2: ‘Trustable IoT’ facilitated by Scotland’s Rural College (SRUC). KTIF Award – £62,832.85.

    Overview: The innovation based project seeks to develop a set of open source standardised processes for IoT sensors and digital devices that measure and triangulate biodiversity baselines and improvements.

    Project 3: ‘Reducing Inputs’ facilitated by Soil Association (Scotland). KTIF Award – £24,000.00.

    Overview: This knowledge transfer project aims to inspire and inform farmers and growers to reduce their use of external inputs including synthetic nitrogen-based fertiliser, pesticides and herbicides; to reduce carbon footprints, tackle disease resistance, improve soil health and ecological performance, protect natural capital and boost financial resilience.

    Project 4: ‘Decarbonising Scottish Malting Barley production’ facilitated by Scottish Agricultural Organisation Society (SAOS). KTIF Award – £ 36,905.25.

    Overview: This knowledge transfer project’s primary aim is to raise the awareness and understanding amongst farmer producers of the emissions associated with producing malting barley.

    Project 5: ‘Agroecology: enabling the transition’ facilitated by Nourish Scotland. KTIF Award – £112,500.00.

    Overview: This knowledge transfer based project builds the previous project ‘Agroecology – facilitating mindset change’ and its design builds on the learning from that programme. It aims to widen and deepen understanding of agroecology specifically through a farmer to farmer/crofter to crofter cooperative learning programme.

    Project 6: ‘Wader Friendly Farmers: Building a Stronger Network’ facilitated by Royal Society for the Protection of Birds (RSPB). KTIF Award – £27,825.00.

    Overview: Another knowledge transfer based project which will look to increase the number of farmers and landowners who are engaged with the Working for Waders Initiative, increase the area of land positively managed for waders and improve data collection from the projects.

    Project 7: ‘Farm Carbon Storage Network’ facilitated by Scotland’s Rural College (SRUC). KTIF Award – £85,970.00.

    Overview: This innovation based project seeks to develop a representative farmer group that will estimate their farm carbon stock using soil testing and LiDAR surveys.

  • PRESS RELEASE : More than 1.3 million winter vaccines delivered [October 2022]

    PRESS RELEASE : More than 1.3 million winter vaccines delivered [October 2022]

    The press release issued by the Scottish Government on 12 October 2022.

    Most vulnerable protected against COVID-19 and flu.

    Over a million vaccines have been delivered to protect against the latest strains of flu and COVID-19 in the latest efforts to relieve pressure on the NHS over winter.

    Frontline healthcare staff and the country’s most vulnerable have been immunised at speed – with 80.2% of all care home residents being fully vaccinated since the rollout began in September.

    The next groups in line for their vaccines – over 65s and those at high-risk – are receiving a scheduled appointment and 50-64 year olds will soon be invited to book an appointment. Anyone who has missed an appointment can reschedule through the NHS Inform online booking portal.

    The COVID-19 vaccine is being given at the same time as the flu jab where possible, and so far 94% of those invited have had both at the same appointment. Over two million Scots will be offered both vaccines over the next three months – a pace that aims to maintain Scotland’s place as a leading nation on vaccine uptake.

    Health Secretary Humza Yousaf said:

    “This impressive uptake is testament to the frontline staff who got us through the pandemic and continue to protect our population and NHS from the threats that winter brings.

    “Scotland remains steadfast in the effort to protect everyone – continuing the huge success of the vaccination programme since it was first rolled out in December 2020.

    “COVID-19 has not gone away and I call on everyone to take up the offer of a booster as soon as their invitation arrives to protect themselves, their families and the NHS.”

    BACKGROUND

    1,369,270 COVID-19 and flu vaccines have been delivered since the winter vaccine programme launched.

    Both new bivalent vaccines, which target Omicron and the original variant of COVID-19, are being deployed alongside existing vaccines, though the vaccination individuals receive will depend on age and vaccine availability. Both the current and new bivalent vaccines provide good protection from severe illness and hospitalisation from known COVID-19 variants.

  • Eluned Morgan – 2022 Statement on Progress Implementing the Out of Hospital Cardiac Arrest Plan

    Eluned Morgan – 2022 Statement on Progress Implementing the Out of Hospital Cardiac Arrest Plan

    The statement made by Eluned Morgan, the Minister for Health and Social Services, on 14 October 2022.

    On 16 October, we mark Restart a Heart Day. Save a Life Cymru and its partners will be encouraging us to learn more about life-saving cardio-pulmonary resuscitation (CPR), using defibrillators and knowing how to help when someone has a cardiac arrest.

    I want to use this opportunity to provide Members with a further update about progress to implement the Out of Hospital Cardiac Arrest Plan and Save a Life Cymru’s work.

    The Out of Hospital Cardiac Arrest Plan was launched in 2017 and we established the Save a Life Cymru partnership that brings together organisations across Wales to help develop the Welsh public’s CPR and defibrillation skills so people feel confident to help if they witness someone experiencing an out-of-hospital cardiac arrest. Last year we increased the funding for this life saving programme.

    Earlier this month a new save a Life Cymru campaign was launched. ‘Help is closer than you think’ (Cofia, mae help wrth law) which focuses on increasing people’s confidence to intervene in a cardiac arrest emergency by highlighting the importance of calling 999 immediately, as well as the support provided by the call handler to do CPR and locate a registered defibrillator until an ambulance arrives. A TV, radio and social media advertisement went live from Monday 10 October.

    Save a Life Cymru has recruited a clinical out-of-hospital cardiac arrest programme manager who is developing an all Wales CPR and defibrillator framework to help communities become rescue ready and have the right resources in the right place to help someone having a cardiac arrest. It has also recruited four Save a Life Cymru community support coordinators, one of whom is already in post, and it is hoped the remainder will be in post before the end of November. They are also currently advertising for two Save a Life Cymru community support team leader posts.

    Save a Life Cymru is working with a range of organisations to support people of all ages and backgrounds to learn CPR and defibrillation skills, including:

    • Continuing to develop their partnership with the Football Association of Wales to broaden the reach of teaching CPR in Wales.
    • Following a successful pilot, Cardiff University has rolled out its model for all medical students who are trained in CPR to train all first year students.
    • Supporting One Voice Wales, which represents community and town councils, employing a person to co-ordinate CPR and defibrillator activity in communities across Wales, including ensuring defibrillators are registered and in good working order.
    • Appointing, in conjunction with Cardiff Metropolitan University, a post-doctoral research fellow who will develop research projects to initiate improvements in Out of Hospital Cardiac arrest outcomes in Wales
    • Partnering with Ospreys Rugby medical team to help raise awareness of CPR and defibrillation among its audiences.
    •  Producing a bilingual educational leaflet to support community CPR
    • Providing CPR training at the Welsh Government stand in some national events such as the Urdd Eisteddfod and Royal Welsh Show
    • Supporting Betsi Cadwaladr University Health Board (BCUHB) to produce a bilingual Primary School resource, supported by BSL, which teaches children the sequence of CPR through song and dance.

    During 2021/22 I announced a further £1m to purchase 1,000 additional defibrillators which community groups and public organisation across Wales were able to apply for.  638 groups and organisations successfully applied for a defibrillator and so far about 238 have been installed in communities across Wales. There have been some delays in groups being able to purchase and install the cabinets so defibrillators are still being distributed.

    Communities and organisations which already have defibrillators are being encouraged to register them on The Circuit – more than 7164 are registered and now 72% have a guardian. We have seen a significant increase in the number registered and in the percentage with a guardian but there is still more work to be done.

    Additionally, the Welsh Ambulance Service partnered with GoodSAM app to improve mobilisation of clinically trained staff and volunteers to life-threatening emergency calls. So when an emergency call is received by the ambulance service and classified to be of a life-threatening nature, details will automatically be sent through to the GoodSAM app to alert the nearest approved volunteer responder. They will shortly be relaunching the GoodSAM app in Wales, which was paused during the pandemic, and this will open up being a GoodSAM responder to all eligible individuals who have signed up and been approved by GoodSAM and partner organisations. This will be a huge step forward in Wales.

    We have made substantial progress over the course of the last twelve months and have heard stories of the differences this work is making to people’s lives. We know that every second counts when someone goes into cardiac arrest. We can all help raise awareness of the importance of dialling 999 and giving early CPR and defibrillation.

  • PRESS RELEASE : Thousands of Welsh farms to receive payments [October 2022]

    PRESS RELEASE : Thousands of Welsh farms to receive payments [October 2022]

    The press release issued by the Welsh Government on 13 October 2022.

    More than 15,600 Welsh farms will receive a share of over £161m when Basic Payment Scheme (BPS) 2022 advance payments are made tomorrow (Friday 14 October), Rural Affairs Minister Lesley Griffiths has announced.

    This means 97% of claimants will receive a BPS advance payment worth 70% of their estimated claim value.

    This is the second year Rural Payments Wales (RPW) is making automatic BPS advance payments in October.

    Before 2021, BPS payments commenced from 1 December annually.

    Regulation changes made by the Minister following the end of the EU Exit Implementation Period simplified the requirements for BPS. This sees BPS advance payments made prior to December to eligible claimants. Reasons why a BPS advance payment may not be made include ongoing land dispute, breaches identified at inspection or outstanding probate matters.

    Full and remaining balance BPS 2022 payments will be made from 15 December 2022, subject to full validation of the BPS claim.

    It is expected all but the most complex BPS claims will be fully validated, and payments made before the end of the payment window on 30 June 2023.

    Rural Affairs Minister, Lesley Griffiths said:

    Following the simplification of BPS requirements, advance payments have been made prior to December which provides financial certainty to farm business during this extremely challenging time.

    In addition, here in Wales we have maintained the BPS budget at £238m, the same level as last year.

    Full and remaining balance BPS 2021 payments will be made from 15 December and my officials will again this year be working hard to make these payments to as many farmers as possible early in the payment window.