HL Deb 08 July 1991 vol 530 cc1205-6

Lord Campbell of Croy asked Her Majesty's Government:

What progress is being made in the Council of Ministers to prevent money laundering within the EC.

The Minister of State, Department of Transport (Lord Brabazon of Tara)

My Lords, the Council of Ministers adopted the money laundering directive on 10th June. The directive has to be implemented by member states before 1st January 1993.

Lord Campbell of Croy

My Lords, I am grateful to my noble friend for that reassuring Answer, because these measures are aimed chiefly at the evil of drugs. Are the British Government completely confident that by the beginning of 1993 it will be possible to enforce the agreement under which all deposits in banks and similar institutions of more than 15,000 ecus (approximately £10,000) must have a full explanation?

Lord Brabazon of Tara

My Lords, we shall seek to ensure that we comply with all our obligations under the directive by that date. The requirement to which my noble friend refers is that concerning the identification of customers. Institutions are required to obtain evidence of the identity of their customers when they enter into business relations with them; for instance, the opening of an account. Identification requirements also apply to one-off transactions between institutions and customers; for example, the purchase of travellers cheques involving sums in excess of 15,000 ecus. There is no requirement in the directive for the compulsory explanation of deposits.

Lord Cledwyn of Penrhos

My Lords, the United Nations has estimated that up to 500 million dollars are laundered in the industrialised world every year. Can ere Minister give the figures, first, for the European Community and, secondly, for this country?

Lord Brabazon of Tara

My Lords, I do not have the estimated figures for either this country or the European Community.

Lord Cledwyn of Penrhos

My Lords, the Minister will recall the recommendation in the report of the Select Committee of this House which was submitted to us last year. It also made certain estimates. Can he assure the House that the report's recommendations are being implemented by the Government?

Lord Brabazon of Tara

My Lords, I apologise for not having the details of the report in front of me. I shall look into the matter and ensure that the recommendations are being acted upon.

Lord Bruce of Donington

My Lords, is the Minister aware that the provisions of the original directive were amended in June this year and that they do not appear to present any difficulty in the exercise of the directive? Is there any reason why its implementation should be deferred until 1st January 1993? If the Minister's answer is that there appears to be a necessity for primary legislation, will he explain exactly where in the amended directive appear the clauses which give rise to that? If there is to be primary legislation, why has it not been presented previously?

Lord Brabazon of Tara

My Lords, major changes will not be required of this country because to a large extent existing United Kingdom law and practice are already compatible with the provisions of the directive. However, there must be some legislative changes to ensure that we comply with our obligations and we shall bring forward appropriate measures. As regards other countries I understand that more substantial legislation is required. That is why the directive cannot come into force before 1st January 1993.

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