My Lords, I declare a simple interest as a former chairman of the Justice Committee in the House of Commons, where we sought to clarify and underline the constitutional relationship. That probably explains why, while I generally support government Amendment 8, I have some doubts as to whether it is desirable to have included the Crown dependencies and overseas territories in the same amendment when their constitutional relationship has a very different history.
Of course, the amendment as framed does not claim to place any requirements on the jurisdictions to which it refers; it simply requires UK Ministers to report to the UK Parliament on how it is all going, which is obviously a good thing and something that we can very much welcome. Parliament needs to know about the effectiveness of information sharing, not only in respect of the overseas territories and the Crown dependencies but in respect of all the jurisdictions in which business is already carried out or to which it might transfer as a result of the steadily improving regulation in some of the territories that have been referred to in this debate.
A lot of the public concern arises from two things. One of them, which was mentioned by the noble Lord, Lord Judd, is the appalling record of corruption in many developing countries. The other is the revelation of much of that in the Panama papers. The noble Baroness, Lady Stern, deserves credit and tribute for her campaigning on this issue. She referred to the number of proceedings being considered or started. Many of them have arisen not from inadequate public registers but from the useful publication of a great deal of information from one law firm. As it happens, it was the biggest law firm in Panama, Mossack Fonseca, both of whose named partners are currently in detention in relation to matters in Brazil.
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That notorious partnership created many thousands of shell companies. It did not know, and did not seek to know, the beneficial ownership of the clients for whom it was doing this. The incorporation of these companies took place not primarily in Panama but in many other jurisdictions, particularly in Caribbean jurisdictions—not just British overseas territories but, for example, in at least one territory associated with the Netherlands. It was a massive operation stretching over to Singapore and many other places.
In Panama, there has been significant improvement in the criminal law and the requirements of due diligence, with which all firms now to have comply. I had the opportunity to discuss this with lawyers in Panama recently, and I think that the situation will change quite strikingly in that particular country and jurisdiction. But much of this business may have transferred to Nevada, Delaware or Singapore, and Ministers will need to report to Parliament on the effectiveness of the access of law enforcement agencies and tax agencies to ownership information in those jurisdictions.
To serve its purpose, the information shared has to be reliable, up-to-date and verified—and that is the more urgent priority. As several noble Lords pointed out, the UK has work to do at home if it is to match what is already done in, for example, Jersey. There are
real benefits to be had from publicly accountable registers, such as are proposed in the amendment tabled by the noble Baroness, Lady Stern, particularly in tackling corruption by national leaders, which would not otherwise come to light. But my worry is that, unless this becomes a much more widespread practice, there will be many jurisdictions in which such persons can engage in those activities.
I think that the phrase “gold standard” is unfortunate because it is something we went off when we realised that we had to do so—so let us find a different analogy for trying to get sufficiently wide respect among jurisdictions for the idea that public access confers real benefits to the populations whose money is involved. Let us recognise that the priority is to get for our law enforcement and tax authorities, and those of other countries, access to information that is reliable, up-to-date and verified.