Money Laundering (Hansard, 9 July 2002)

§ Lord Peyton of Yeovil
asked Her Majesty's Government:
Which government departments last year authorised or instigated the inquiries which bankers, accountants, stockbrokers and others were required to make of their customers to discourage money laundering; and what results ensued.

§ Lord Bassam of Brighton
My Lords, the role of the Government is to ensure that the necessary regulatory framework to fight money laundering is put in place. The law imposes specific duties on financial institutions, such as those of identifying customers and staff training. The provisions will be strengthened under Part 7 of the Proceeds of Crime Bill, currently before your Lordships' House, and by forthcoming revisions to the money laundering regulations, which are the responsibility of my right honourable friend the Chancellor of the Exchequer. 558 In 2001, 31,251 reports of suspected money laundering were submitted to the authorities by financial institutions and other bodies.

§ Lord Peyton of Yeovil
My Lords, I do not suppose that I have a chance of persuading the noble Lord that there is something reprehensible about twisting the arms of private sector organisations into grilling their customers for information, some of which they have already and other aspects of which are none of their business. I am not impressed by the noble Lord's bureaucratic answer, but perhaps I can persuade him that this is just another of those vexatious intrusions that cause the private, law-abiding individual a great deal of irritation and would not cause a money launderer to do more than twitch.

§ Lord Bassam of Brighton
My Lords, I suspect that my chances of persuading the noble Lord that the Government might have a point here are rather slim. Increasingly, we are getting tremendous levels of co-operation from the private sector. Some 62 per cent of reports of suspected money laundering activity come from banks, 14 per cent come building societies and 7 per cent come from other financial institutions. Surely this is an issue on which those on all sides of your Lordships' House should agree. We welcome support, particularly from the Opposition, for aspects of the Proceeds of Crime Bill, the aim of which is to tackle money laundering fundamentally. We should all support that.

§ Lord Sharman
My Lords, does the Minister agree that the introduction of large denomination notes is a significant factor in the facility with which money may be laundered? What evaluation, if any, have the Government or the European Union made of the impact of the introduction of the 1,000 euro note on money laundering activities throughout Europe?

§ Lord Bassam of Brighton
My Lords, with his great knowledge of the accountancy profession, the noble Lord has got the better of my briefing. I am more than happy to indulge in some correspondence on the issue. The noble Lord's point is relevant.

§ Lord Campbell of Alloway
My Lords, does the noble Lord appreciate that the point made by my noble friend Lord Peyton ought to be addressed, not merely discarded as an unworthy consideration?

§ Lord Bassam of Brighton
My Lords, of course the noble Lord, Lord Peyton, makes a point, but I would have thought that it was in society's interests generally to tackle fundamentally issues such as money laundering, not least because it is greatly associated with evils such as drug trafficking, people trafficking and terrorism.

§ Lord Monson
My Lords, to demand of elderly people, who may have held an account with a particular bank for more than 65 years, that they must suddenly prove their identity is often alarming and always insulting. It shows that the Government's obsession with money laundering is going over the top. Secondly, if the requirement is to be extended to everyone in the country who holds a bank or building society account, what will be done about those many people who do not possess a passport or a photographic driving licence?

§ Lord Bassam of Brighton
My Lords, I had hoped that there would be Cross-Bench support for our offensive on money laundering. It is not a matter of the law being overbearing. Surely this is a major issue. In 2000–01, £l9 million was recovered as a product of our efforts to tackle drug trafficking and other criminal activity. That shows the extent of the problem that we are beginning to tackle fundamentally. I hope that the Government will be widely supported on that.

§ Lord Saatchi
My Lords, has not my noble friend Lord Peyton touched on a point of great concern to all of us, as he so often does? Will the Minister cast his mind back to the wise advice of the noble and learned Lord the Leader of the House, who said in the second of our emergency debates on terrorism that perhaps the best way to defeat terrorism was to follow the money? The noble and learned Lord told us that the Government had frozen, I think, £63,180,000 of terrorist-related finance in UK bank accounts. Can the Minister tell us what that figure is today?

§ Lord Bassam of Brighton
My Lords, I do not have that figure at my fingertips. I am quite happy to undertake the research that the noble Lord suggests, and am more than happy to correspond with him on it.

§ Lord McNally
My Lords, is the Minister, like me, unsure as to where the Official Opposition are on this matter? May I assure him that we on these Benches are fully supportive of the Government's action on money laundering? Can he say whether there has been success in getting co-operation from professions other than banking, such as the accounting and the legal professions? It is quite clear that many professional advisers become involved in money laundering. Unless we all believe that it is our responsibility, the money launderers will succeed.

§ Lord Bassam of Brighton
My Lords, I am drawn to supporting the noble Lord's comments. I, too, am puzzled as to where the Official Opposition are coming from on this issue. They have not been overly supportive of the Proceeds of Crime Bill. The noble Lord is also right to draw attention to the important role of other professions in this field. Of the many thousands of reports made to NCIS, only 0.35 per cent come from accountants and only 1 per cent from the legal profession. Noble Lords might be drawn to conclude that these professions could be more helpful to the police in their inquiries.