The Criminal Finances Bill is still passing through Parliament. But the Tories' claims that the legislation will aid the fight against major gangs, organised crime and terrorist finances are simply bluster. The Bill is a missed opportunity. Home Office officials accept that perhaps only 20 new cases will be brought a year as a result of the legislation.
Labour wants a real crackdown on criminal finances and it wants close the open gates in the financial architecture. In effect the system of British Overseas Territories and Crown Dependencies allows tax avoidance on a huge scale and links the British finance sector directly to corruption and money laundering.
The intelligence from the police and security services is that the laundering of criminal proceeds is a decisive part of major criminal operations. Criminals cannot simply amass extremely large quantities of cash over the long run. These are vulnerable to seizure by the police or by other criminals. At the same time, the laundering of criminal proceeds is key to compiling very large and seemingly legitimate riches.
Banks and offshore banking centres play a decisive role and we know from a number of cases that some of our best-known names have been caught out, or caught up in criminal enterprises. US authorities fined HSBC almost $2billion in 2012, arguing that the bank had become a conduit for "drug kingpins and rogue nations". This is not to single out one institution. Barclays, Lloyds, RBS and others have all paid fines related to failure to combat money laundering or other criminal activity.
In the latest debate, Tory MPs seemed more concerned to combat Russian rather than UK corruption. No doubt Russia has a significant corruption problem. In the database on Panama Papers leaks there are over 4,000 Russian addresses cited. But there were also over 7,000 UK, Jersey and Guernsey addresses cited.
The Bill provides few new significant defences or penalties against these overseas operations. The criminals and their bankers (unwitting or otherwise) need to know that they face the stiffest possible sanctions. But both the international Overseas Territories (Bermuda, Caymans, Gibraltar and others) and those Crown Dependencies closer to home such as Jersey, Guernsey and the Isle of Man are largely exempt from the legislation.
The Government is adopting a light-minded, almost irresponsible approach to a problem which is very serious. Money laundering and corruption have been identified as high priority threats in the National Crime Agency's (NCA) national control strategy, the UK Government's strategic defence and security review, its National Risk Assessment of Money Laundering and Terrorist Financing, and its overseas development aid strategy. We know that international terror networks require large-scale and continuous funding to conduct their operations.
Labour wants a strong and successful finance sector based on high quality operations. A finance sector embroiled in money laundering and tax avoidance is a threat to us all. The danger in this situation is that the Tories' default position is laissez-faire. Allied to this is the threat to turn post-Brexit Britain into an offshore tax haven.
Without hyperbole, this really would be a threat to our way of life, replacing the current inadequate system of financial regulation and beleaguered public services with a Wild West of low regulation, low taxation, minimal public services and no questions asked for international finance. Labour will tackle this cancer, even if the Tories won't.
Diane Abbott is the shadow home secretary and Labour MP for Hackney North and Stoke Newington