HL Deb 09 February 1988 vol 493 cc101-3

3.10 p.m.

Lord Harris of Greenwich

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what action they propose to take regarding allegations that some financial institutions in the Channel Islands and the Isle of Man have been used to launder the proceeds from drug trafficking.

The Minister of State, Home Office (Earl Ferrers)

My Lords, the Channel Islands and the Isle of Man are co-operating fully with Her Majesty's Government, taking action against the laundering of drugs money. They have undertaken to bring in legislation corresponding to our Drug Trafficking Offences Act and the Isle of Man has already done so. I understand that in Jersey and Guernsey legislation is at an advanced stage of preparation.

Lord Harris of Greenwich

My Lords, while thanking the noble Earl for that reply, may I ask whether he is aware of the seriousness of the present situation, in which a senior official of the United States Government has publicly identified the Channel Islands as one of the major problem areas in regard to money laundering? That being so, can he indicate when the legislation in Guernsey and Jersey will be on the statute book as further delay will only play into the hands of the sophisticated criminals responsible for organising this industry?

Earl Ferrers

My Lords, we are very anxious to close any loopholes that may exist with regard to international drug offences. I am surprised at what the noble Lord, Lord Harris, said, because the island authorities have been commended for the assistance they have given by, for example, the Metropolitan Police, the American drug enforcement agency and the Federal Bureau of Investigation.

As to when the legislation will be enacted, the problem is that there are differences in property laws and the need to embrace Alderney and Sark has made the drafting of provisions to permit the confiscation of assets fairly complex. I understand that it is likely to become law in the next six months.

Lord Mishcon

My Lords, is the noble Earl aware that there is considerable concern, as the noble Lord, Lord Harris, said, about the amount of laundering of this very undesirable money? Will the noble Earl encourage the Bank of England to have specific talks with its opposite numbers in Jersey—I believe they are known as the offshore banking supervisors—in order to see whether practical steps can be taken immediately, even prior to legislation, to ensure that this dreadful traffic is not made profitable in offshore places that at least are contiguous to our own territory?

Earl Ferrers

My Lords, I fully appreciate and endorse the concern of the noble Lord, Lord Mishcon. We wish to see these loopholes, if there are any, filled as soon and as efficiently as possible. I am bound to tell the noble Lord that the Bank of England does not have any authority over the banking systems in the islands. However, there are frequent discussions.

Lord Harris of Greenwich

My Lords, is the noble Earl aware that the statement by a senior official of the drug enforcement administration in the United States about the problem in the Channel Islands was published within the last 14 days? Is he further aware that many of us would be extremely gratified were he able to assure us that in the case of both Guernsey and Jersey, commencement orders in relation to their legislation will be made before the end of the present calendar year?

Earl Ferrers

My Lords, I can only tell the noble Lord that there is a problem in so far as Jersey and Guernsey are their own authorities making their own laws. Those laws will be compatible with ours, but the noble Lord, Lord Harris, will be the first to recognise that the Drug Trafficking Offences Act is a complicated piece of legislation which we are even now having to amend in the Criminal Justice Bill.