Nigerian State Funds (Hansard, 13 December 2000)

§ The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton)
My Lords, the Government take very seriously any claims that money launderers have exploited financial institutions in the United Kingdom. The Financial Services Authority is investigating allegations of possible laundering of illegally obtained Nigerian state funds in the United Kingdom. The Serious Fraud Office is gathering evidence on behalf of the Swiss Government in relation to those funds.
360 Because of the very sensitive nature of those inquiries, I am afraid that I cannot give your Lordships any further information about them nor, sadly, indicate when they are likely to be completed.

§ Baroness Williams of Crosby
My Lords, the House will be aware that recently Nigeria has moved from a vicious military dictatorship to the re-establishment of democracy under President Obasanjo. Can the Minister confirm that as long ago as April the democratic Government of Nigeria asked the Home Office, under the mutual services agreement, to investigate the laundering of Nigerian money through British banks? Can he also confirm that in October the Financial Services Authority said that it would investigate the issue; that in November the Serious Fraud Office said that it would investigate the issue; and that from April to this day the Government of Nigeria have received no return of that money, there have been no criminal proceedings and they have no evidence of what has happened to some 230 million dollars that the country badly needs?

§ Lord Bassam of Brighton
My Lords. I fully recognise the seriousness of the case made by the noble Baroness. I am not in a position to confirm or otherwise the comments that she has made. However, what is transparently obvious is that letters of request are communications between two states and relate to matters that are subject to criminal investigation and proceedings. Such matters are always dealt with confidentially.

§ Lord Tomlinson
My Lords, is my noble friend aware that the concern expressed by the noble Baroness, Lady Williams, is widely shared by other sides of the House? The consequence of an eight-month delay in being able to say anything publicly on the matter could well be that the funds that are the subject of the inquiry could be moved. Can the Minister give the House an assurance that the funds are secure where they are and that the delays in this long drawn out inquiry—an inquiry from a friendly head of state—will not lead to those funds disappearing?

§ Lord Bassam of Brighton
My Lords, of course I share the concerns of the noble Lord. We are doing all that we can to ensure that those inquiries are expedited as quickly as possible. We have actively played our part in referring the requests to the appropriate department. I can assure the House that we shall continue to pursue matters as rigorously as we can. However, such matters have to be dealt with sensitively.

§ Lord Hylton
My Lords, is it not the case that some relatively poor countries have been stripped of their assets by kleptocratic rulers? Will the Home Office consult urgently with the Foreign Office and with the Treasury to ensure that appropriate action is taken?

§ Lord Bassam of Brighton
My Lords, I entirely sympathise with the first point made by the noble Lord, Lord Hylton. Yes, we are consulting and we are dealing closely with the agencies that are carrying out the investigations. We shall continue to work with foreign governments where letters of request are made. We shall take all necessary steps to ensure that action is taken.

Lord Carlile of Berriew
My Lords, can the Minister tell the House whether the available steps have been taken that would enable the funds to be frozen? If such steps have not been taken, why have they not been taken?

§ Lord Bassam of Brighton
My Lords, our current criminal legislation does not allow for the freezing of assets until criminal proceedings have begun or are about to begin. That is a well understood situation, but perhaps it should be reviewed. We are undertaking a review. No doubt in the future there will be careful consideration given to improving those procedures.

§ Baroness Elles
My Lords, is the noble Lord aware that the Swiss Federal Banking Commission has named and shamed 19 banks for handling Abacha cash? Credit Suisse is to be indicted for accepting large sums from the Abacha family. Why have the Government not acted fully on a request for mutual legal assistance? The Serious Fraud Office investigated only three of the banks implicated in the scandal related to the Abacha affair as a result of the Nigerian investigation. It is quite incomprehensible that Nigeria has been able to show that over 970 million dollars have been looted by Abacha from Nigeria and that they have flowed through British banks. Why has that not been revealed and why are the Government hiding the matter?

§ Lord Bassam of Brighton
My Lords, the Government are not hiding the matter. As I have said, we have co-operated as fully as we can. The Financial Services Authority is actively involved. That is as a result of the request of the Swiss Federal Banking Commission's investigation. Swiss legislation is different from our own. As I said, we are looking at ways in which we can improve the quality of our legislation. That commitment was given as recently as last week in the publication of the White Paper by the Department for International Development. We entirely understand the concerns of the noble Baroness and we shall continue to play an active role in ensuring that those appalling scandals are not repeated in the future.

§ Lord Lawson of Blaby
My Lords, is the Minister aware that he has been ill-advised—if he has been so advised—in telling the House that the funds can be frozen only if there are criminal prosecutions? The 362 Government have power to freeze funds even when there are no criminal prosecutions. That has happened on rare occasions in the past. It does not normally happen because the Bank of England policy, quite rightly, is that it is reluctant to freeze funds because the confidence in the City of London may be diminished if that happens. Nevertheless, the power is there and each case has to be judged on its merits.

§ Lord Bassam of Brighton
My Lords, I take careful note of what the noble Lord has said. He speaks with greater knowledge than I on these matters. As I have explained to your Lordships, the powers are there. I am interested in what the noble Lord has said. I shall ensure that I have been properly advised. I am confident that I have been advised wisely. As to the issue, it is absolutely right that we in government and the government agencies play a proper and full part in ensuring that those kinds of scandals do not take place in the future.

§ Lord Cope of Berkeley
My Lords, will the Minister undertake to draw to the attention of the investigating authorities the deep concern in relation to this matter that has been expressed on all sides of the House and to point out that this is a matter to which the House is likely to return before long?

§ Lord Bassam of Brighton
My Lords, I am grateful to the noble Lord for his advice in this matter. I take the comments that have been made seriously. I believe it is a serious matter. We try to fulfil our international obligations as best we can. For that reason we have looked again at issues such as the proceeds of crime. As the noble Lord is well aware, we intend to bring forward draft legislation to deal with those issues early in the new year.

§ Lord Avebury
My Lords, can the Minister assure the House that legislation on money laundering that, according to the Queen's Speech, is to be brought forward in this Session, will be drawn sufficiently widely so that, if a survey of the powers that he has mentioned has been completed by then, it will be possible to introduce amendments in that Bill?

§ Lord Bassam of Brighton
My Lords, I thought I had made it plain that it is a draft Bill. Like all other Members of your Lordships' House, the noble Lord will have ample opportunity, through the appropriate channels, to comment on the draft. We shall listen carefully to the comments made by the noble Lord and other Members of the House.

§ Baroness Williams of Crosby
My Lords, will the Minister take this matter back, given that Nigeria—a country where 70 per cent of the population live on less than a dollar a day—is one of the great friends of Britain and so desperately needs the sums of money involved?