Money Laundering: Gibraltar Discussions (Hansard, 13 June 1995)

§ The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)
My Lords, we have frequent discussions with the Government of Gibraltar on this important issue. We believe that the introduction of effective anti-money laundering legislation is crucial to help Gibraltar build a successful financial services industry.

§ Lord Harris of Greenwich
My Lords, in thanking the noble Baroness for that Answer, with which I very much agree, may I ask whether she is aware that it creates a very difficult situation when this Parliament passes legislation 1633 dealing with money laundering in terms of the proceeds of serious crime and the Gibraltar authorities have not taken appropriate action? Is she further aware that there is serious concern about this matter? Is she also aware that the sooner this matter comes to a satisfactory conclusion, the better pleased we shall all be?

§ Baroness Chalker of Wallasey
My Lords, I very much agree with the noble Lord. The United Kingdom is determined that Gibraltar will implement the necessary legislation. We now believe that Gibraltar is of the same mind, and that progress can be made through co-operation and constructive dialogue. The only way that Gibraltar can ensure that it maintains its position as a competitive and reputable financial centre is by passing the legislation.

§ Lord Clinton-Davis
My Lords, is not this the third time that the Government have made entreaties to the Gibraltar Government to take realistic action to curb money laundering, which, as the noble Lord, Lord Harris, has indicated, is tied up also with international crime of the most sinister kind? Why does the Minister feel that on this occasion those entreaties are likely to receive a more fertile response?

§ Baroness Chalker of Wallasey
My Lords, I cannot tell the noble Lord whether it is the third, fourth or fifth time. I have lost count, to be honest. What I do know is that it is necessary. Gibraltar has made some regulations to implement the directive to deal with the laundering of drug money. She must now do so for the proceeds of other crime. The reason I am more hopeful this time on this issue than I have been in the past stems from the discussions, which must remain confidential, which my right honourable friend the Foreign Secretary had with Mr. Bossano last month.

§ Lord Merrivale
My Lords, will my noble friend consider that Mrs. Jean Cooper on secondment from the Bank of England as Financial Services Commission banking supervisor recently said that she agreed with the Chief Minister that there is no significant money laundering through the Rock? Will she also consider that the Gibraltar Government could need further assistance regarding the extension of the directive making laundering of drug money illegal so as to cover the many other criminal activities to which my noble friend has just referred?

§ Baroness Chalker of Wallasey
My Lords, I should have thought that if there were no significant money laundering operation there could be no possible reason for not passing the legislation. However, it is clear that in all our dependent territories there is an effort to deal with money laundering. That is something that we are taking up in all parts of the world for which we have any jurisdiction. It is also critically important to prevent money laundering. By having the legislation, one prevents bad things from getting started.

§ Lord Whaddon
My Lords, is the Minister aware of international reports being carried by the international media that Her Majesty's Government intend to impose 1634 direct rule on Gibraltar on or about 15th July? Does she agree that that would be inappropriate at this stage, and will she categorically deny such reports?

§ Baroness Chalker of Wallasey
My Lords, I would hope very much that such action would not be necessary. As I have made clear in answer to earlier questions, we believe that Gibraltar is now taking the sensible path of introducing the legislation that is important for its own future. If Gibraltar passes that legislation, I see no reason why one would have to consider such measures as mentioned by the noble Lord, which are pure press speculation.

Lord Bruce of Donington
My Lords, while I concur completely with the Minister's observations that it is essential that the legislation should be in place in Gibraltar to deal with the problem, does she agree that one of the greatest problems is that of enforcement, and that there are many capitals of the world, including our own, where enforcement may not be as adequate as it should be?

§ Baroness Chalker of Wallasey
My Lords, the noble Lord knows full well that we are determined to enforce our own legislation. But of course we can never he effective in enforcing our legislation unless other capitals do likewise. That is why, as the noble Lord says, it is most important that other nations agree and implement fully action against money laundering, a question which comes up in a number of different fora.

§ Baroness Hooper
My Lords, does my noble friend agree that Gibraltar is a small territory with a small administrative team, and that, as with many other countries within the EU, it has a backlog of a number of European directives with which to deal? Would she care to confirm that Gibraltar has undertaken to deal with the whole of that backlog, including the money laundering directive provisions, by the end of this year?

§ Baroness Chalker of Wallasey
My Lords, I confirm that Gibraltar has a number of regulations and pieces of legislation to carry through. That is why we have offered assistance to Gibraltar to do the work. However, it is essential that the authorities get on with that work because some of the issues have been outstanding for a considerable time.

§ Lord Harris of Greenwich
My Lords, is the Minister aware that her answers carry the overwhelming support of this House? This is a matter of high public importance and the sooner that the Gibraltar authorities realise that they must take urgent action the sooner the dispute can be put behind us.

§ Baroness Chalker of Wallasey
My Lords, I sincerely hope that the authorities in Gibraltar will act with all speed. Only in that way can they have a real relevance in the growth of their own business financial services and other legitimate interests which are carried on in Gibraltar.

§ Lord Merrivale
My Lords, is it not a fact that the Gibraltar Government have promised to pass 20 directives per month? As it is a small territory, 20 directives per month is not bad. Should not the Government be given a fair wind to assist them in that respect?

§ Baroness Chalker of Wallasey
My Lords, if when notified of the legislation to be carried through one does not make an early start, inevitably a backlog will build up. In order to clear the backlog one must then move faster than one would have done had one started at the right time. That is why we are giving Gibraltar help to get on with the job.