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Money-laundering and the Financing of Terrorism: EUC Report

My Lords, this will by no means be a tour d’horizon or a comprehensive response to the report, which I found more interesting than I had expected. I congratulate the chair and the members of the committee on navigating their way through the subject. The report is a mere 50 pages—I do not mean that pejoratively but comparatively—with a four-page appendix, as mentioned by my noble friend, which was required to list all the acronyms. I have not counted them, but I believe she said that there are 119. Having read the report, I have learnt one addition to my vocabulary; namely, the word "kleptocrat". No doubt, I shall find an opportunity to use the word "kleptocracy" shortly. A theme which runs through all Home Office matters is the quantity of legislation. So I was surprised by paragraph 80 regarding the transposition into national law of the framework decision on mutual recognition of confiscation orders, due more than a year ago. There has been plenty of legislative opportunity. After all, immediately after State Opening, the Government published the Crime and Security Bill, which in part amends the Policing and Crime Act, which had received Royal Assent just a few days before Prorogation. I wish to mention two matters, which echo a number of points that have been made. On the database and the final recommendation as regards compatibility with the jurisprudence of the ECHR, I was glad to see that the Government have responded that they will consider this with the Information Commissioner. Not knowing and not being able to find out whether you are on the database is a matter of concern. The noble Lord, Lord Richard, and others have mentioned the cost of compliance by the private sector, particularly solicitors. I declare an interest in that I am a solicitor, although I am no longer practising. I looked at the Law Society practice note today on the website and I recoiled slightly. I was not surprised at its evidence about the costs to solicitors, including the hidden costs. I recoiled because of the obvious complexity of it—not caused by the Law Society. I find the term customer or client "due diligence" counterintuitive. After spending many years attempting to foster a relationship with one’s clients, it does not come easily to have to exercise due diligence on them. I checked with solicitor friends before this debate, and I am told that clients are now so used to the regime that they come along armed with their ID, though the comment was made that real criminals would find it very easy to fake the requested ID. I was also told that it is now easier than when the regime started to find user-friendly and pragmatic ways of dealing with the requirements. This may be comparative; it did occur to me that my friends have been somewhat ground down over the years. However, they did mention that they know some firms still require their fee-earners to complete a six-page document before they can even see a client. The noble Lord, Lord Jopling, has mentioned the Law Society. The chief executive of the society made a good point about feedback to those who have to comply with regulations, both in recognition of their burden and to work towards improvements in the system. The noble Lord, Lord Hodgson, mentioned the irritation that one can encounter. I recently tried to make an investment—not a very big one—in a building society, but because I had no debts they thought I did not exist. I suspect that was irritating to them; it was certainly irritating to me. In conclusion, there is a temptation in a debate such as this, when reading about the problems, to call for an ever tougher regime. We on these Benches would want to resist that. We would not want to overlook the civil liberties issues which were at the centre of the debate we had earlier.