My Lords, these amendments cover measures in Chapter 2 of Part 1 of the Bill. I thank noble Lords who have taken part in the debate. As the Action Plan for Anti-money Laundering and Counter-terrorist Finance set out, the Government see public/private partnership as central to tackling money laundering and terrorist financing. A major
part of this approach is to provide support for the effective exchange of information, both within the private sector, and between the public and private sectors, to increase our collective knowledge of threats and vulnerabilities; to help the regulated sector to protect itself, and to improve the quality of the UK’s financial intelligence. The provisions in Chapter 2 assist this approach, and our amendments will enhance their ability to do so.
I hope noble Lords will agree that the government amendments in this group are technical and uncontroversial. Clause 11 permits the UK Financial Intelligence Unit—or UKFIU—hosted in the National Crime Agency, to request further information in relation to a suspicious activity report, or following a request from a foreign authority, from any member of the regulated sector. Clause 35 allows the police to do the same in relation to terrorist finance. At present, the clause will allow the NCA and police to direct that further information is provided through issuing a further information notice. If the information is not provided in accordance with the direction, the NCA will be able to apply to a court for a further information order to require the person to provide the information requested. However, following further consultations with operational partners, we have concluded that a further information notice is not required, as the NCA can already request information to be provided voluntarily under existing powers. Government Amendments 64 to 69, 130 to 137 and 173 will therefore remove further information notices. If the regulated sector entity declines to provide information on a voluntary basis, the NCA or police can still apply to a magistrates’ court for a further information order.
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Amendments 62, 63, 128 and 129 relate to the information-sharing provisions at Clauses 10 and 34. As the Bill is currently drafted, if the requesting party does not notify the NCA or police correctly of their intention to share information, the requested entity would not receive the legal protections intended. This introduces a degree of uncertainty, which may deter companies from exchanging vital information. These amendments will provide the legal certainty that firms need if they are to make best use of these provisions.
Amendments 58 and 59, tabled by the noble Baroness, Lady Hamwee, seek to amend the provisions relating to the extension to the moratorium period for suspicious activity reports. They seek to remove the provision, or amend it to make it discretionary. These amendments would allow a court to include the owner of the property or their representatives in the hearing of an application. I hope that noble Lords will see that it is essential that the court must exclude the owner of the property from a hearing to determine whether information should be withheld from that person. It would fatally undermine the mechanism for withholding information from that person if they were able to attend the application where the reasons given for withholding this information are heard.
Amendment 60 proposes that the information-sharing request from one regulated-sector entity to another should be determined on the basis of whether the request meets the conditions set out in the clause to
permit the sharing of data. Where a regulated-sector entity is asked to provide information it should, of course, meet the conditions set out in the Bill for doing so. The Bill already provides for that. However, we also want to be clear that the entity should determine for itself that the information ought to be disclosed. It is not just the case that the conditions are met, but that the entity is satisfied that the information should be provided. This is a common-sense approach that allows the owner of the information to make an informed assessment.
Amendment 61 proposes that the provision removing liability for regulated-sector entities for the sharing of information in good faith should be removed. As I said at the outset, we want to encourage the sharing of information between regulated-sector entities, to tackle money laundering and the financing of terrorism. In doing so, we do not want those entities to be held liable for any breaches of confidence where, in good faith, they share information. We therefore believe that this provision is essential to allow regulated-sector entities to share information and that, if it were not included, those entities might not feel able to do so.
Finally, Amendment 72, tabled by the noble Lord, Lord Rosser, proposes that the National Crime Agency should be required to designate a qualifying report as a high-priority investigation. This was, of course, an issue that the noble Lord raised at Second Reading. A suspicious activity report, or SAR, is not in itself an investigation, but can help to inform a decision on whether to initiate such an investigation, when taken with other sources of intelligence. In 2015, the Home Office reviewed the SARs regime. One of the issues raised in that review, and mentioned by the noble Lord, was whether the regime could be focused more effectively, including through the prioritisation of SARs. A number of regulated sector entities made this suggestion, and we have been considering it carefully, as part of the ongoing SARs reform programme. This programme has been set up to improve the regime as a whole, and it will actively consider this issue. As the noble Lord knows, the SARs regime is complex and changes to it would affect a significant number of sectors. It is therefore right that we consider the changes very carefully.