My Lords, for various reasons I have not yet had an opportunity to speak to the Bill. As this is my first appearance, I declare an interest as recorded in the register as a non-executive director of the Royal Bank of Scotland Group plc. I emphasise that what I am about to say represents my personal views, and in no way represents anything that I have been asked or encouraged to say by the Royal Bank of Scotland.
I want to comment on the group of amendments that the noble Lord, Lord Brennan, introduced when he raised the extremely important issue of anti money-laundering and the legislative provisions that he referred to, and on my noble friend Lord Newby’s comments about seeking to import specific references into this group of amendments. I should say that I support the intention of the amendments which the Government have brought forward to have a much enhanced set of standards and supervision for those taking management responsibilities within banks.
My concern about the amendments introduced by the noble Lord, Lord Brennan, is that by singling out one group of activities, however important, we might give the impression that a lot of other things are not as important. The schema at the moment is drafted quite generically. It will eventually leave a lot to the discretion of the regulators—which I think is right—so that they can operate it in an effective manner. However, by singling out the particular legislation that the noble Lord, Lord Watson of Invergowrie, referred to—the Fraud Act, the Proceeds of Crime Act and the Money Laundering Regulations—it seems to me that a lot of things are not said.
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The noble Lord referred to lawyers immediately looking at what is said and what is not said in legislation. I therefore put it to him that after his amendments a number of important things would not be said in this legislation, which might lead people to think that they were not intended to be covered. For example, issues which are similar to money-laundering but which were not mentioned by the noble Lord’s amendments are terrorism financing offences and sanctions offences. These are very similar, and the banks operate very similar systems to deal with money-laundering and to stop unauthorised financial transactions with terrorists and those on sanctions lists. However, the noble Lord’s amendments do not cover these.
Stepping away from that, other potentially criminal activities would not be mentioned by the legislation after the noble Lord’s amendments. I single out the new offence which was introduced post-LIBOR, the offence of rate manipulation, for which I cannot remember the exact term. This would be another criminal activity which would not be mentioned by the Bill. Beyond that, there would be a lot of very important compliance and conduct issues that are managed by banks which would not be caught by any specific criminality, but nevertheless would have devastating consequences for individuals. Within the definition these could involve a serious risk of consequences to the authorised person or business interest of the United Kingdom, and therefore should be caught.
Banks must responsibly manage a whole range of conduct and compliance issues. My point is not that I am against trying to ensure that money-laundering is within the legislation. I am sure that money-laundering offences will be fully taken into account by the PRA when it implements the new regimes. My problem is that by mentioning them we have omitted to mention some other really important things which should definitely be covered.