With this it will be convenient to discuss the following:
New clause 3—Failure to Prevent an Economic Criminal Offence (No. 2)—
“(1) A relevant body (B) is guilty of an offence if a person commits a economic criminal offence when acting in the capacity of a person associated with (B).
(2) For the purposes of this clause—
“economic criminal offence” means one of the following—
(a) a common law offence of conspiracy to defraud;
(b) an offence under section 1, 5 or 7 of Fraud Act 2006;
(c) an offence under section 1, 17 or 20 of the Theft Act 1968 (theft, false accounting and destruction of documents);
(d) an offence under section 993 of the Companies Act 2006 (fraudulent trading);
(e) an offence under sections 346, 397 and 398 of the Financial Services and Markets Act 2000 (providing false statements to auditors, misleading statements, and misleading the FCA);
(f) an offence under section 327, 328 and 329 of the Proceeds of Crime Act 2002 (concealing criminal property, facilitating acquisition, acquisition and use of criminal property).
“relevant body” and “acting in the capacity of a person associated with B” has the same meaning as in section 39.
(3) It is a defence for B to prove that, when the economic criminal offence was committed—
(a) B had in place such prevention procedures as it was reasonable in all the circumstances to expect B to have in place, or
(b) it was not reasonable in all the circumstances to expect B to have any prevention procedures in place.
(4) In subsection (2) “prevention procedures” means procedures designed to prevent persons acting in the capacity of a person associated with B from committing an economic criminal offence.
(5) A relevant body guilty of an offence under this section is liable—
(a) on conviction on indictment, to a fine,
(b) on summary conviction in England and Wales, to a fine,
(c) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum.
(6) It is immaterial for the purposes of this section whether—
(a) any relevant conduct of a relevant body, or
(b) any conduct which constitutes part of a relevant criminal financial offence takes place in the United Kingdom or elsewhere.
(7) The Chancellor of the Exchequer and the Secretary of State must prepare and publish guidance about procedures that relevant bodies can put in place to prevent persons acting in the capacity of an associated person from committing an economic criminal offence.”
This new clause would create a corporate offence of failing to prevent economic crime, defined by reference to certain offences listed in subsection (2).
New clause 4—Failure to prevent criminal financial offences in the UK—
“(1) A relevant body (B) is guilty of an offence if a person commits a criminal financial offence when acting in the capacity of a person associated with B.
(2) It is a defence for B to prove that, when the criminal financial offence was committed—
(a) B had in place such prevention procedures as it was reasonable in all the circumstances to expect B to have in place, or
(b) it was not reasonable in all the circumstances to expect B to have any prevention procedures in place.
(3) In subsection (2) “prevention procedures” means procedures designed to prevent persons acting in the capacity of a person associated with B from committing criminal financial offences.
(4) For the purposes of this clause—
“criminal financial offence” means an offence listed in Part 2 of Schedule 17 to the Crime and Courts Act 2013 [that could not be prosecuted under the offences created by sections 7 and 38 of this Act],
or, one of the offences listed below—
(a) an offence under section 1, 6 or 7 of the Fraud Act 2006;
(b) an offence under section 1, 17 or 20 of the Theft Act 1968;
(c) an offence under section 993 of the Companies Act 2006;
(d) an offence under section 327, 328 and 329 of the Proceeds of Crime Act 2002;
(e) the common law offence of conspiracy to defraud;
“relevant body” has the same meaning as in section 36.
(5) A relevant body guilty of an offence under this section is liable—
(a) on conviction on indictment, to a fine,
(b) on summary conviction in England, to a fine,
(c) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum.
(6) It is immaterial for the purposes of this section whether—
(a) any relevant conduct of a relevant body, or
(b) any conduct which constitutes part of a relevant criminal financial offence takes place in the United Kingdom or elsewhere.”
This New Clause would create an offence of failing to prevent any financial offence listed in Part 2 of Schedule 17 of the Crime and Courts Act 2013.
New clause 6—Public registers of beneficial ownership of companies registered in the Overseas Territories—
“(1) In Part 1 of the Proceeds of Crime Act 2002 (introductory), after section 2A, insert—
“2AA Duty of Secretary of State: Public registers of beneficial ownership of companies registered in Overseas Territories
(1) It shall be the duty of the Secretary of State, in furtherance of the purposes of—
(a) this Act; and
(b) Part 3 of the Criminal Finances Act 2017
to take the steps set out in this section.
(2) The first step is, no later than 31 December 2018, to provide all reasonable assistance to the Governments of the UK’s Overseas Territories to enable each of those Governments to establish a publicly accessible register of the beneficial ownership of companies registered in that Government’s jurisdiction.
(3) The second step is, no later than 31 December 2019, to prepare an Order in Council and take all reasonable steps to ensure its implementation, in respect of any Overseas Territory that has not yet introduced a publicly accessible register of the beneficial ownership of companies within their jurisdiction. This Order would require the Overseas Territory to adopt such a register.
(4) In this section “a publicly accessible register of the beneficial ownership of companies” means a register which, in the opinion of the Secretary of State, provides information broadly equivalent to that available in accordance with the provisions of Part 21A of the Companies Act 2006.””
This new clause would require the Secretary of State to take steps to provide that Overseas Territories establish publicly accessible registers of the beneficial ownership of companies, for the purposes of the Proceeds of Crime Act 2002 and Part 3 of the Bill (corporate offences of failure to prevent facilitation of tax evasion).
New clause 10—Duty to prevent use of new Limited Partnerships for financial criminal activity—
“(1) The Treasury may not lay regulations before Parliament on new Limited Partnerships before the Secretary of State has completed and published a review of the proposed regulations.
(2) It shall be the duty of the Secretary of State to review draft regulations which would allow the creations of new Limited Partnerships, in order to prevent the use of new Limited Partnerships for financial criminal activity.
(3) In performing that duty the Secretary of State must, in particular, have regard to the contribution transparency may make in tackling tax evasion, money laundering, national and cross border criminality, and terrorist financing.
(4) Following any review under subsection (2) the Secretary of State must lay a report before Parliament on what steps the Government will take to prevent new Limited Partnerships being used for criminal purposes.
(5) In conducting the review the Secretary of State must consult—
(a) the Scottish Government,
(b) the National Crime Agency,
(c) the Serious Fraud Office,
(d) the Financial Conduct Authority,
(e) HMRC,
(f) interested third sector organisations, and
(g) any other persons the Secretary of State deems relevant.”
This new clause sets a duty on the Secretary of State to review Treasury proposals for new Limited Partnerships to prevent their use for financial criminal activity, including tax evasion, money laundering and terrorist financing. In carrying out the review the Secretary of State will be required to consult those groups listed in subsection (5) and lay a report before Parliament.
New clause 11—Failure to prevent facilitation of tax evasion offences: consultation on other jurisdictions—
“(1) Within 12 months of this Act receiving Royal Assent, the Secretary of State must conduct a public consultation on the issues listed in subsection (2).
(2) The issues are—
(a) the desirability of the Crown Dependencies and Overseas Territories introducing equivalent offences to those introduced by sections 40 and 41 of this Act; and
(b) the steps that would need to be taken for the Crown Dependencies and Overseas Territories to introduce equivalent offences to those introduced by sections 40 and 41 of this Act.
(3) As part of this consultation the Secretary of State must seek views from—
(a) the governments of the Crown Dependencies and Overseas Territories,
(b) such bodies as the Secretary of State or the governments specified in subsection (3)(a) consider appropriate,
(c) any other person or body who the Secretary of State deems relevant, with particular regard to non-governmental bodies and private sector entities.
(4) The Secretary of State must lay before both Houses of Parliament a report setting out the outcome of this consultation within 24 months of this Act receiving Royal Assent.”
New clause 12—Failure to prevent facilitation of tax evasion offences: publication of convictions—
“(1) The Secretary of State must publish an annual report listing all bodies and organisations that have been found guilty of a failure to prevent facilitation of a UK foreign tax evasion offence within the previous five years.”
New clause 13—Failure to prevent tax evasion offences: sentencing guideline—
“(1) The Secretary of State must produce sentencing guidelines for the level of fine to be imposed on bodies found guilty of failure to prevent facilitation of a UK foreign tax evasion offence.
(2) Such guidance must stipulate that the maximum level of the fine cannot be greater than the total value of the tax whose evasion was facilitated.”
New clause 14—Failure to Prevent an Economic Criminal Offence (No. 3)—
“(1) A relevant body (B) is guilty of an offence if a person commits an economic criminal offence when acting in the capacity of a person associated with (B).
(2) For the criminal purposes of this clause—
“economic criminal offence” means any of the offences listed in Part 2 of Schedule 17 to the Crime and Courts Act 2013.
“relevant body” and “acting in the capacity of a person associated with B” have the same meaning as in section 39.
(3) B is guilty of an offence under this section if a person associated with B commits an economic criminal offence intending—
(a) to obtain or retain business for B; or
(b) to obtain or retain an advantage in the conduct of business for B or otherwise for the financial benefit of B.
(4) It is a defence for B to prove that, when the economic criminal offence was committed—
(a) B had in place such prevention procedures as it was reasonable in all the circumstances to expect B to have in place, or
(b) it was not reasonable in all the circumstances to expect B to have any prevention procedures in place.
(5) In subsection (2) “prevention procedures” means procedures designed to prevent persons acting in the capacity of a person associated with B from committing an economic criminal offence.
(6) A relevant body guilty of an offence under this section is liable—
(a) on conviction on indictment, to a fine,
(b) on summary conviction in England and Wales, to a fine,
(c) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum.
(7) It is immaterial for the purposes of this section whether—
(a) any relevant conduct of a relevant body, or
(b) any conduct which constitutes part of a relevant criminal financial offence takes place in the United Kingdom or elsewhere.
(8) The Chancellor of the Exchequer and the Secretary of State must prepare and publish guidance about procedures that relevant bodies can put in place to prevent persons acting in the capacity of an associated person from committing an economic criminal offence.”
This new clause would create a corporate offence of failing to prevent economic crime, defined by reference to the offences listed in Part 2 of Schedule 17 to the Crime and Courts Act 2013.
New clause 15—Failure to Prevent an Economic Criminal Offence (No. 4)—
“(1) A relevant body (B) is guilty of an offence if a person commits an economic criminal offence when acting in the capacity of a person associated with (B).
(2) For the criminal purposes of this clause—
“economic criminal offence” means one of the following—
(a) a common law offence of conspiracy to defraud;
(b) an offence under section 1, 5 or 7 of Fraud Act 2006;
(c) an offence under section 1, 17 or 20 of the Theft Act 1968 (theft, false accounting and destruction of documents);
(d) an offence under section 993 of the Companies Act 2006 (fraudulent trading);
(e) an offence under sections 346, 397 and 398 of the Financial Services and Markets Act 2000 (providing false statements to auditors, misleading statements, and misleading the FCA);
(f) an offence under section 327, 328 and 329 of the Proceeds of Crime Act 2002 (concealing criminal property, facilitating acquisition, acquisition and use of criminal property).
“relevant body” and “acting in the capacity of a person associated with B” have the same meaning as in section 39.
(3) B is guilty of an offence under this section if a person associated with B commits an economic criminal offence intending—
(a) to obtain or retain business for B; or
(b) to obtain or retain an advantage in the conduct of business for B or otherwise for the financial benefit of B.
(4) It is a defence for B to prove that, when the economic criminal offence was committed—
(a) B had in place such prevention procedures as it was reasonable in all the circumstances to expect B to have in place, or
(b) it was not reasonable in all the circumstances to expect B to have any prevention procedures in place.
(5) In subsection (2) “prevention procedures” means procedures designed to prevent persons acting in the capacity of a person associated with B from committing an economic criminal offence.
(6) A relevant body guilty of an offence under this section is liable—
(a) on conviction on indictment, to a fine,
(b) on summary conviction in England and Wales, to a fine,
(c) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum.
(7) It is immaterial for the purposes of this section whether—
(a) any relevant conduct of a relevant body, or
(b) any conduct which constitutes part of a relevant criminal financial offence takes place in the United Kingdom or elsewhere.
(8) The Chancellor of the Exchequer and the Secretary of State must prepare and publish guidance about procedures that relevant bodies can put in place to prevent persons acting in the capacity of an associated person from committing an economic criminal offence.”
This new clause would create a corporate offence of failing to prevent economic crime, defined by reference to the offences listed in Part 2 of Schedule 17 to the Crime and Courts Act 2013.
New clause 16—Conversion of platforms to centralised registers: review—
“(1) Within one year of this Act receiving Royal Assent the Secretary of State must establish a review of the operational efficacy of closed beneficial ownership platforms created by Crown Dependencies or British Overseas Territories that are subject to the automatic exchange of beneficial ownership information with Her Majesty’s Government for the purpose of combating illicit financial activity.
(2) The aim of the review will be to gather information to equip Her Majesty’s Government to take all steps necessary to provide financial, administrative or any other support to assist
Crown Dependencies and British Overseas Territories in converting all such beneficial ownership platforms into closed centralised registers of beneficial ownership.
(3) In the course of the review the Secretary of State must consult—
(a) the governments of any Crown Dependencies and Overseas Territories which have created closed beneficial ownership platforms and which are subject to the automatic exchange of information with Her Majesty’s Government for the purpose of combating illicit financial activity; and
(b) such bodies as the Secretary of State or governments under subsection (3)(a) deem appropriate.
(4) The review shall be completed and laid before Parliament within one year of its establishment.
(5) No later than one year after the review has been laid before Parliament, Her Majesty’s Government must have taken all steps necessary to assist relevant Crown Dependencies and British Overseas Territories in the establishment of closed centralised registers of beneficial ownership.
(6) Her Majesty’s Government shall supply quarterly reports to Parliament of the progress of steps taken under subsection (5), and such reports shall set out—
(a) concerns expressed by relevant Crown Dependencies and British Overseas Territories about conversion of beneficial ownership platforms to centralised registers, and
(b) an assessment by Her Majesty’s Government of the extent to which objections to the creation of centralised registers can be justified on a constitutional, economic, administrative or any other operational basis.”
New clause 17—Public registers of beneficial ownership of companies registered in Crown dependencies—
“(1) In Part 1 of the Proceeds of Crime Act 2002 (introductory), after section 2A, insert—
“2AA Duty of Secretary of State: Public registers of beneficial ownership of companies registered in Crown dependencies
(1) It shall be the duty of the Secretary of State, in furtherance of the purposes of—
(a) this Act; and
(b) Part 3 of the Criminal Finances Act 2017
to take the actions set out in this section.
(2) The first action is, no later than 31 December 2017, to provide all reasonable assistance to the Governments of Crown Dependencies to enable each of those Governments to establish a publicly accessible register of the beneficial ownership of companies registered in that Government’s jurisdiction.
(3) The second action is, no later than 31 December 2019, to publish legislative proposals to require the Government of any Crown dependency that has not already established a publicly accessible register of the beneficial ownership of companies registered in that Government’s jurisdiction to do so.
(4) In this section—
“a publicly accessible register of the beneficial ownership of companies” means a register which, in the opinion of the Secretary of State, provides information broadly equivalent to that available in accordance with the provisions of Part 21A of the Companies Act 2006.
“legislative proposals” means either—
(a) a draft Order in Council; or
(b) a Bill presented to either House of Parliament.”
New clause 18—Whistleblowing in relation to failure to prevent facilitation of tax evasion and money laundering—
“(1) The Secretary of State shall conduct a review of arrangements to facilitate whistleblowing in the banking and financial services sector in relation to the disclosure of suspected
corporate failure to prevent facilitation of tax evasion and money laundering.
(2) The review must consider, but shall not be limited to—
(a) arrangements to protect the anonymity of persons disclosing suspected corporate failure to prevent facilitation of tax evasion and money laundering;
(b) the efficacy of current penalties for institutions that treat whistleblowers unfairly, and proposals for future criminal penalties.
(3) In conducting the review the Secretary of State must consult—
(a) whistleblowers in the banking and financial services sector,
(b) devolved administrations,
(c) interested charities,
(d) the relevant regulators, and
(e) any other persons the Secretary of State deems relevant.
(4) The Secretary of State must lay the report to Parliament within six months of the passing of this Act.”
This new clause requires the Secretary of State to conduct a review of arrangements to facilitate whistleblowing in the banking and financial services sector, in consultation with those groups listed in subsection (3), and then lay a report before Parliament on steps the Government will take to bring forward penalties for institutions that fail to protect whistleblowers.
New clause 19—The culture of the banking industry and failure to prevent the facilitation of tax evasion—
“(1) The Secretary of State must undertake a review into the extent to which banking culture contributed to the failure to prevent the facilitation of tax evasion in the banking sector.
(2) The review must consider, but shall not be limited to, the following issues—
(a) the impact of culture change on decision making senior executive and board level;
(b) the pressure on staff to meet performance targets;
(c) how allegations of tax evasion are reported and acted on.
(3) The review must set out what steps the UK Government intends to take to ensure that banking culture is not facilitating tax evasion.
(4) In carrying out this review, the Secretary of State must consult—
(a) devolved administrations;
(b) HMRC;
(c) the Serious Fraud Office;
(d) the Financial Conduct Authority;
(e) interested charities, and
(f) anyone else the Secretary of State deems appropriate.
(5) The Secretary of State shall lay a copy of the review before the House of Commons within six months of this Act receiving Royal Assent.”
New clause 20—Report on the impact of the criminal offences relating to offshore income, assets and activities—
“(1) The Chancellor of the Exchequer shall, within one year of the coming into force of the provisions in Tax Management Act 1970 relating to criminal offences relating to offshore income, assets and activities introduced by section 165 of the Finance Act 2016 publish a report on the impact of the introduction of these offences.
(2) The report must include, but need not be limited to, information about—
(a) the number of persons who have been charged with offences under each of sections 106B, 106C and 106D of the Tax Management Act 1970;
(b) the number of persons who have been convicted of any such offence;
(c) the average fine imposed; and
(d) the number of people upon whom a custodial sentence has been imposed for any such offence.”
New clause 21—Report on income lost to tax evasion—
“(1) The Chancellor of the Exchequer shall, within one year of the passing of this Act, prepare and publish a report, in consultation with stakeholders, on the value of income lost to the Exchequer from tax evasion offences.
(2) The report must include the following—
(a) the value of the income lost to the Exchequer from tax evasion offences in the financial years—
(i) 2015-16;
(ii) 2014-15;
(iii) 2013-14;
(iv) 2012-13; and
(v) 2011-12;
(b) a detailed summary of the model used by HMRC for estimating income lost to the Exchequer from tax evasion offences.
(c) an assessment of the efficacy of HMRC’s performance in relation to dealing with tax evasion, including—
(i) a breakdown of specific HMRC departments or units dealing with investigation and enforcement of tax evasion matters;
(ii) details of the numbers of staff in each of the years listed in paragraph (a) who are located within departments or units dealing with investigation and enforcement matters in relation to tax evasion;
(iii) details of the budgets allocated to departments or units dealing with investigation above; and
(iv) details of the numbers of prosecutions or the amount of tax recovered in each financial year listed in paragraph (a) as a result of the work of HMRC departments or units dealing with investigation and enforcement matters in relation to tax evasion in those financial years.”