Government attempts to transfer the power to impose financial sanctions for money laundering after Brexit have been criticised as too wide-ranging.

The Sanctions and Anti-Money Laundering Bill grants ministers the power to create new forms of sanctions through secondary legislation, and to create criminal offences punishable by up to 10 years’ imprisonment.

The bill, which was started in the House of Lords, is expected to begin committee stage on Tuesday. The Lords’ constitution committee today revealed concerns at the extent of powers being granted to ministers.

Legislation is required because the UK government’s current power to implement sanctions comes from the European Communities Act 1972, which is due to be repealed as part of the Brexit process.

Peers are particularly concerned that individuals subject to sanctions under the bill will have no right to know the reasons for the sanctions until their appeal against them reaches the courts.

There is also disquiet that ministers can set the rules on evidence consideration and defence to any new offences created.

Law firms will watch with concern to see if the new regime – and with it new policies, controls and procedures – will increase the compliance burden.

Chairman of the committee Baroness Taylor of Bolton said: ‘The Sanctions and Anti-Money Laundering Bill grants unduly broad powers to ministers and establishes sanctions regimes that will be subject to less scrutiny and challenge than those that exist at present.

‘The bill is the first piece of Brexit legislation to be scrutinised by the House of Lords. The government should not use the transfer of laws from the EU to the UK as an opportunity to increase its own power, reduce scrutiny, or weaken individuals’ rights.’

The government states that legislation is not designed to bring any substantive policy changes and is intended to make it easier to impose new sanctions when the need arises.