23/01/2018 18:31 GMT

Ministers Drop Power To Weaken Anti-Money Laundering Laws After Brexit In Face Of Lords Defeat

Peers warn of 'alarming' power-grab by government.

NIKLAS HALLE'N via Getty Images

Ministers are set to abandon plans to hand themselves the power to water down anti-money laundering laws after Brexit, in order to avoid another defeat in the House of Lords.

The Sanctions and Anti-Money Laundering Bill has its third reading on Wednesday and the government has tabled amendments it hopes will placate its critics.

The legislation is designed to ensure the UK complies with its international anti-money laundering obligations after it leaves the EU.

But peers have warned it gives ministers the “unrestricted” and “alarming” ability to bypass parliament. 

Lib Dem Treasury spokesman Baroness Kramer has said the “inherently flawed” Bill as first drafted would allow ministers “to eliminate every anti-money laundering regulation and replace them by highly watered-down versions”.

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Foreign Office minister Lord Ahmad has moved to try and placate widespread opposition to the Bill.

The Bill would allow the government to change laws using statutory instruments and regulations - rather than having to win votes on primary legislation.

Foreign Office minister Lord Ahmad has now tabled amendments to the legislation that will specifically prevent the government from using its powers to weaken anti-money laundering laws. 

Lib Dems
Lib Dem Treasury spokesperson Baroness Kramer has slammed the Bill for giving more powers to ministers.

Lord Ahmad has also agreed the government will give regular updates on how close it is to creating a register of overseas owners of property in order to crack down on corruption.

And HuffPost UK understands the government is expected to try and further mollify its opponents when the Bill moves to the Commons, after it was accused of trying to give ministers the power to unilaterally expand the definition of what counted as terrorist financing. 

Last week the government was defeated in the Lords on another measure in the Bill which would have allowed ministers to create new criminal offences without having to pass primary legislation through parliament.

During the debate on the Bill, Lord Pannick, a cross-bench peer and leading barrister, warned the Bill could hand ministers “unrestricted and unregulated power”.

Lord Judge, the former Lord Chief Justice, said the legislation risked allowing an “alarming accretion of power to the executive”.

And veteran Tory peer Lord Cormack has said he was “disturbed” by parliament “conferring a blank cheque” on the government to do what it liked. “The mantra of taking back control means only one thing to me: it is Parliament taking back control,” he said.

Theresa May was last year forced to offer concessions to MPs after Tory MPs rebelled against the so-called Henry VIII powers, the proposed use of secondary legislation, in her flagship EU Withdrawal Bill.