Drug Trafficking Offences Bill

HL Deb 13 May 1986 vol 474 cc1094-127

6.56 p.m.

Report received.

Clause 1 [Confiscation orders]:

The Parliamentary Under-Secretary of State, home Office (Lord Glenarthur) moved Amendment No. 1:

Page 2, line 14, leave out (" (other than the payment of costs)")

The noble Lord said: My Lords, I beg to move Amendment No. 1 and at the same time perhaps I may speak to Amendments Nos. 27 and 67. These amendments deal with costs. The amendment to Clause 1 will enable the Crown Court to take account of the extent to which an offender's assets have been reduced by a confiscation order before deciding how much he is able to pay or contribute towards prosecution costs. Of course if he still retains substantial assets then it is right that he should pay or contribute towards these costs, as with any other type of offender, but where most of his property has been confiscated it would be wrong to assess his proper contribution to costs as if he were still a very wealthy man. He might be saddled with an order he simply could not pay.

The amendment to Clause 6 specifies more precisely which parts of the Powers of the Criminal Courts Act 1973 apply to the sums realised under a confiscation order. The amendments to Clause 12 provide for the receiver to be paid from the proceeds of confiscation and, where the prosecution have paid him something on account, for the prosecution to be reimbursed. This links with the new clause to be added after Clause 14, which specifies that the prosecution can pay the receiver where no sum is available from assets. I beg to move.

On Question, amendment agreed to.

7 p.m.

Lord Glenarthur moved Amendments Nos. 2 and 3:

Page 3, leave out lines 12 to 14 and insert ("the values of the payments or other rewards").

Page 4, line 3, leave out subsection (5).

The noble Lord said: My Lords, I beg to move Amendments Nos. 2 and 3 en bloc and with them to take a rather long list of amendments. These are Amendments Nos. 5, 8 to 10, 13, 15 to 26, 31, 35, 38, 41 to 46, 49, 52 to 58, 63, 65, 70, 72, 73 and 79. I think that this substantial number of amendments can be usefully discussed together. Although they affect a variety of clauses, they all concern two issues—property in the hands of third parties and, related to that, the way in which the courts will assess the amount to be recovered under a confiscation order.

I think that I can be reasonably brief. The amendments replace the concept of property available in respect of the defendant by that of realisable property. This will include any property held by the defendant, and any held by a third party to whom he had made what is termed a gift caught by the Act: that is, property transferred for significantly less than full value. The amount to be recovered from the third parties will be no more than the net value of the gifts—the difference between the value of the property they received and any consideration they gave. But restraint and confiscation will not be limited to those assets which have actually been received from the trafficker. I believe that that represents a valuable tightening up of the provisions of the Bill.

The second element in this batch of amendments consists of changes proposed to the way in which the courts will determine the amount to be recovered under a confiscation order and are intended to fulfil a commitment given by my honourable friend the Parliamentary Under-Secretary of State in another place. The batch of amendments will enable the courts to take as the value of the proceeds of drug trafficking either the value of any payments or rewards at the time they were received, with an adjustment for inflation, or, if the trafficker still holds the assets or property acquired with them, their current value, whichever is the greater.

Where a gift or its value is to be recovered from a third party, the courts will apply a similar method of assessment. This will ensure that neither the trafficker nor his associates are able to retain the benefit of substantial increases in the value of property directly or indirectly acquired with the proceeds of drug trafficking. If the trafficker has spent his proceeds, or the associate his gift, and there are insufficient alternative assets available to make up for the money which has disappeared, the Bill makes provision in Clause 4(3) for the amount of the confiscation order to be limited accordingly. I hope that that has been an adequate explanation of what is intended by these amendments. I beg to move.

Lord Mishcon

My Lords, the noble Lord the Minister very courteously wrote to me, to the noble Lord, Lord Hooson, and to the noble Lord, Lord Harris, with a very full explanation of the basis for these amendments. He gave us time to reflect upon them and we certainly agree with them.

On Question, amendments agreed to.

Clause 3 [Statements relating to drug trafficking]:

Viscount Davidson moved Amendment No. 4:

Page 4, line 15, leave out ("prosecuting authority") and insert ("prosecutor").

The noble Viscount said: My Lords, in moving this amendment it may be convenient to discuss also Amendments Nos. 6, 7, 30, 33, 51, 91 and 111. There are a number of references throughout the Bill to the prosecuting authority. It is the prosecuting authority, for example, which must apply for a restraint or charging order, or seek the appointment of a receiver to realise a convicted trafficker's assets. We believe it would be better to use the word "prosecutor" to make it clear that we are including in the term the person with day-to-day responsibility for prosecuting the case and not the authority ultimately responsible. This terminology is also in line with that used in other statutes. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 5 to 10:

Page 5, line 5, leave out ("from property available in respect of the defendant").

Page 5, line 7, leave out ("prosecuting authority" and insert ("prosecutor").

Page 5, line 10, leave out ("prosecuting authority") and insert ("prosecutor").

Clause 4, page 5, line 26, leave out ("from the property available in respect of the defendant").

Clause 4, page 5, line 32, leave out ("from the property available in respect of the defendant").

Clause 5, page 5, line 38, leave out from beginning to end of line 14 on page 6 and insert— ("(1) In this Act, "realisable property" means, subject to subsection (2) below—

1. (a) any property held by the defendant, and
2. (b) any property held by a person to whom the defendant has directly or indirectly made a gift caught by this Act.

(2) Property isnot realisable property if").

The noble Lord said: My Lords, I have already spoken to most of these amendments with Amendments Nos. 2 to 3, and my noble friend Lord Davidson has discussed Nos. 6 and 7. I beg to move Amendments Nos. 5 to 10 en bloc.

On Question, amendments agreed to.

Clause 5 [Confiscation orders: definition of terms]:

The Lord Advocate (Lord Cameron of Lochbroom) moved Amendments Nos. 11 and 12:

Page 6, line 16, leave out ("or").

Page 6, line 18, at end insert ("; or (c) an order under section 223 or 436 of the Criminal Procedure (Scotland) Act 1975 (forfeiture of property)").

The noble and learned Lord said: My Lords, these amendments are the first of a series of Scottish amendments to the Bill which I propose to move today. It may therefore be to the benefit of the House if I explain the general purpose of all the amendments in my name at this stage. As your Lordships will recognise, this Bill builds on established features of the English legal system, particularly in relation to the law on receivers and charging orders, in a way which cannot readily be transplanted to Scotland. It is therefore impracticable simply to extend this Bill to Scotland. My right honourable friend the Secretary of State for Scotland has already announced his intention to introduce separate Scottish legislation at the earliest opportunity.

However, in order to avoid the undesirable situation by which Scotland might become a haven for the assets of drug traffickers operating in England and Wales, we propose that the provisions in the present Bill should be extended to Scotland so far as is necessary to ensure effective cross-Border enforcement of orders under the Bill; and the amendments which I shall be moving today are directed to that end.

The most important effects of the amendments are that orders made by the High Court in England and Wales will be recognised as having effect in relation to assets in Scotland and if registered in the Court of Sessions—that is, the supreme civil court in Scotland—will be enforced by that court. Receivers appointed under the Bill will be able to exercise their powers in Scotland, and the police in Scotland will be given the same powers as the English police to obtain information about assets where a court has authorised that. That will enable them to assist the English police as required and also to pursue their own inquiries into drug trafficking more effectively.

I must apologise to the House for bringing these amendments forward at this stage of the prceedings on the Bill, but since the amendments are technically rather complex because of the difficulties inherent in relating the two different legal systems to each other, their preparation has been no easy task.

Amendments Nos. 11 and 12, which I am now moving, concern the matter of forfeiture. The criminal courts in Scotland have general powers to order that property used in committing an offence may be forfeited on conviction. These amendments ensure that any property which already stands forfeit under those provisions will not be regarded as realisable for the satisfaction of a confiscation order imposed by an English court. I beg to move.

Lord Mishcon

My Lords, may I say at once that I appreciate fully the reasons for the amendments that are now before us. It would indeed be very invidious if it were possible for a drug trafficker to make off with his proceeds by removing them north of the Border and with this Bill, which we hope will soon become an Act, not enforceable over the Border. The only matter that I want to raise from the point of view of tidiness is this. The noble and learned Lord talked in terms of fresh Scottish legislation coming before us. We will then presumably have this Act with part of the provisions and another Act dealing with the whole of the provisions that relate to Scotland. Has the noble and learned Lord given any thought to the possibility that in that Act the provisions of this Bill will be incorporated and will be cancelled in this legislation? Otherwise we are going to have two Acts which relate to Scotland and the dichotomy is a little untidy.

Lord Cameron of Lochbroom

My Lords, perhaps I should say that the separate Scottish legislation will be intended to give the Scottish courts powers similar to those which under this Bill are given to the English courts. The purpose of the amendments to this Bill is to allow English orders to become effective in Scotland. Any separate Scottish legislation would, I am sure, have similar cross-Border enforcement for Scottish orders so far as concerns assets which may be in England and Wales. So the two would, I suggest—we shall obviously have to wait and see the legislation which comes forward—be able to run in train. It may be that there will be one or two amendments, and as to that I can give no undertaking at all at present. But I have noted what the noble Lord opposite has said.

On Question, amendments agreed to.

Lord Glenarthur moved Amendment No. 13:

Page 6, line 20, leave out subsection (3).

The noble Lord said: My Lords, this amendment is consequential. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 14:

Page 6, line 32, leave out subsection (4).

The noble Lord said: My Lords, Amendment No. 14, and Amendment No. 133 which is connected with it, are drafting amendments. I beg to move Amendment No. 14.

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 15 to 27:

Page 6, line 41, leave out subsection (5).

Page 7, line 1, at beginning insert ("For the purposes of sections 3 and 4 of this Act").

Page 7, line 2, leave out ("from the property available in respect of the defendant").

Page 7, line 4, leave out ("of all such property at that time") and insert ("at that time of all the realisable property held by the defendant").

Page 7, line 8, at end insert— ("together with the total of the values at that time of all gifts caught by this Act").

Page 7, line 9, leave out from beginning to end of line 11 and insert ("Subject to the following provisions of this section, for the purposes of this Act the value of property (other than cash) in relation to any person holding the property—

1. (a) where any other person holds an interest in the property, is").

Page 7, line 12, leave out ("relevant") and insert ("first mentioned person's beneficial").

Page 7, line 15, leave out ("the relevant") and insert ("that").

Page 7, line 17, leave out ("the value of property (other than cash)").

Page 7, line 18, at end insert— ("(7A) Subject to subsection (11) below, references in this Act to the value at any time ("the material time") of a gift caught by this Act or of any payment or reward are references to—

1. (a) the value of the gift, payment or reward to the recipient when he received it adjusted to take account of subsequent changes in the value of money, or
2. (b) where subsection (7B) below applies, the value there mentioned,

whichever is the greater. (7B) Subject to subsection (11) below, if at the material time the recipient holds—

1. (a) the property which he received (not being cash), or
2. (b) property which, in whole or in part, directly or indirectly represents in his hands the property which he received,

the value referred to in subsection (7A)(b) above is the value to him at the material time of the property mentioned in paragraph (a) above or, as the case may be, of the property mentioned in paragraph (b) above so far as it so represents the property which he received, but disregarding in either case any charging order.").

Page 7, line 19, leave out ("that subsection") and insert ("subsection (6) above").

Page 7, line 44, at end insert— ("(10) A gift (including a gift made before the commencement of section 1 of this Act) is caught by this Act if—

1. (a) it was made by the defendant at any time since the beginning of the period of six years ending when the proceedings were instituted against him, or
2. (b) it was made by the defendant at any time and was a gift of property—
1. (i) received by the defendant in connection with drug trafficking carried on by him or another, or
2. (ii) which in whole or in part directly or indirectly represented in the defendant's hands property received by him in that connection.

(11) For the purposes of this Act—

1. (a) the circumstances in which the defendant is to be treated as making a gift include those where he transfers property to another person directly or indirectly for a consideration the value of which is significantly less than the value of the consideration provided by the defendant, and
2. (b) in those circumstances, the preceding provisions of this section shall apply as if the defendant had made a gift of such share in the property as bears to the whole property the same proportion as the difference between the values referred to in paragraph (a) above bears to the value of the consideration provided by the defendant.").

Clause 6, page 8, line 2, leave out ("and 32") and insert ("(1) to (3C) and 32(1) and (2)").

The noble Lord said: My Lords, these amendments are consequential on Amendments Nos. 2 and 3. I beg to move.

On Question, amendments agreed to.

Clause 7 [Cases in which restraint orders and charging orders may be made]:

Lord Cameron of Lochbroom moved Amendment No. 28:

Page 10, line 1, leave out ("and 9") and insert ("9 and [Inhibition and arrestment in Scotland])".

The noble and learned Lord said: My Lords, the effect of this amendment is simply to ensure that the interpretations of terms contained in subsection (3) of Clause 7 will apply to the new clause on inhibition and arrestment in Scotland which is to be inserted after Clause 15. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 29:

Page 10, line 2, leave out ("by virtue only of subsection (2) above") and insert ("before proceedings have been instituted").

The noble Lord said: My Lords, Amendment No. 29 is a drafting amendment. I beg to move.

On Question, amendment agreed to.

Viscount Davidson moved Amendments Nos. 30 and 31:

Page 10, line 7, leave out ("prosecuting authority") and insert ("prosecutor").

Page 10, line 11, leave out ("property available in respect of the defendant") and insert ("realisable property").

The noble Viscount said: My Lords, these amendments have already been spoken to. I beg to move.

On Question, amendments agreed to.

Clause 8 [Restraint orders]:

Viscount Davidson moved Amendment No. 32:

Page 10, line 20, leave out subsection (1) and insert— ("(1) The High Court may by order (in this Act referred to as a "restraint order") prohibit any person from dealing with any realisable property, subject to such conditions and exceptions as may be specified in the order.

(1A) A restraint order may apply—

1. (a) to all realisable property held by a specified person, whether the property is described in the order or not, and
2. b) to realisable property held by a specified person, being property transferred to him after the making of the order.

(1B) This section shall not have effect in relation to any property for the time being subject to a charge under section 9 of this Act.").

The noble Viscount said: My Lords, in speaking to this amendment it may also be convenient to discuss Amendments Nos. 33, 36, 37, 39 and 40. These amendments are designed to clarify the operation of the restraint powers provided by Clause 8. The proposed revision of subsection (1) makes it clear that, if it thinks it appropriate, the High Court can make a blanket restraint order in respect of a named person which would cover all his realisable property without specifying particular assets in the order.

That might be a suitable course in the case of a wealthy trafficker whose assets were still being investigated at the time the restraint order was made. It would ensure that as assets were discovered by the receiver or other investigators they would be restrained without the delay which seeking a new restraint order would require. Such a blanket order would also cover property which might be acquired by the person specified after the restraint order had been made.

Amendment No. 32, a further consequential amendment to subsection (5)(a), ensures that police and customs officers in Scotland will be able to seize property which is subject to a restraint order in order to prevent its removal from Great Britain. I believe that both these amendments will be helpful to the High Court in exercising its restraint powers. I beg to move.

On Question, amendment agreed to.

Viscount Davidson moved Amendment No. 33:

Page 10, line 27, leave out ("prosecuting authority") and insert ("prosecutor")

The noble Viscount said: My Lords, I have just spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 34:

Page 10, leave out line 35.

The noble Lord said: My Lords, it may be for the convenience of your Lordships if I speak also to Amendment No. 47.

At present the Bill provides for the High Court to vary a restraint or charging order only on the application of the holder of the affected property. However, we believe on reflection that this limitation might well work against the objective of ensuring that the assets needed to satisfy the confiscation order remain available for realisation. If, for example, the prosecution has initially underestimated the value of a gift made by the defendant to a third party, it ought to be able to apply to the High Court for a variation in a restraint or charging order so that the true value of the gift can be secured. Unless it can do so the trafficker's relative or friend might enjoy a substantial bonus.

Similarly, some new property not covered by that described in the first order might be discovered and the original order could be varied to enable it to cover the newly found property. These amendments are therefore in line with the other provisions in the Bill designed to ensure that assets do not escape the confiscation net. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 35 to 47:

Page 10, line 41, leave out from ("any") to ("and") in line 43 and insert ("realisable property")

Page 11, line 8, leave out ("subsection (1) above") and insert ("this section")

Page 11, line 8, leave out from ("property") to end of line 9 and insert ("held by any person includes (without prejudice to the generality of the expression)—

1. (a) where a debt is owed to that person, making a payment to any person in reduction of the amount of the debt, and
2. (b) removing the property from Great Britain.

(5A) Where the ")

Page 11, line 11, leave out ("property available in respect of the defendant") and insert ("realisable property")

Page 11, line 12, leave out ("the jurisdiction") and insert ("Great Britain").

Page 11, line 14, leave out ("5") and insert ("5A")

Page 11, line 16, leave out ("property available in respect of the defendant") and insert ("realisable property")

Page 11, line 18, leave out from ("Crown") to end of line 21 and insert—

1. ("(a) where a confiscation order has not been made, of an amount equal to the value from time to time of the property charged, and
2. (b) in any other case, of an amount not exceeding the amount payable under the confiscation order.").

Page 11, line 23, leave out ("property available in respect of the defendant") and insert ("realisable property").

Page 11, line 27, leave out ("prosecuting authority") and insert ("prosecutor").

Page 11, line 33, leave out from ("any") to end of line 34 and insert ("interest in realisable property, being an interest held beneficially by the defendant or by a person to whom the defendant has directly or indirectly made a gift caught by this Act").

Page 11, line 38, leave out ("property available in respect of the defendant") and insert ("realisable property").

Page 12, line 18, leave out from ("may") to ("make") in line 19.

On Question, amendments agreed to.

Clause 10 [Charging orders: supplementary provisions]:

Viscount Davidson moved Amendment No. 48:

Page 12, line 32, at end insert— ("(2A) Where a charging order has been registered under section 6 of the Land Charges Act 1972, subsection (4) of that section (effect of non-registration of writs and orders registrable under that section) shall not apply to an order appointing a receiver made in pursuance of the charging order.").

The noble Viscount said: My Lords, in speaking to this amendment it may also be convenient to discuss Amendments Nos. 50 and 135. These are purely technical amendments relating to the operation of charging orders under the Bill and involve no changes of any substance. The purpose of the amendment to Clause 10 is to ensure that an order appointing a receiver in pursuance of a charging order remains in force where land which is the subject of the order changes hands. Without such provision an order appointing the receiver would be void against the purchaser in the event of a failure to register the change of ownership as required by the Land Charges Act 1972. The amendment to Clause 31 makes a minor consequential amendment to the Land Registration Act 1925. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved amendments Nos. 49 to 58:

Page 12, line 37, leave out ("relevant") and insert ("beneficial").

Page 12, leave out lines 39 to 42.

Clause 11, page 13, line 21, leave out ("prosecuting authority") and insert ("prosecutor").

Page 13, line 24, leave out ("the property available in respect of the defendant") and insert ("realisable property").

Page 13, line 30, leave out ("property available in respect of the defendant") and insert ("realisable property").

Page 13, line 33, leave out ("property available in respect of the defendant") and insert ("realisable property").

Page 13, line 39, leave out ("property available in respect of the defendant") and insert ("realisable property").

Page 13, line 42, leave out ("property available in respect of the defendant") and insert ("realisable property").

Page 14, line 2, leave out ("property available in respect of the defendant") and insert ("realisable property").

Page 14, line 3, leave out ("relevant interest") and insert ("beneficial interest held by the defendant or, as the case may be, the recipient of a gift caught by this Act").

The noble Lord said: My Lords, these amendments are consequential. I beg to move.

On Question, amendments agreed to.

Viscount Davidson moved Amendment No. 59

Page 14, line 10, leave out ("subsections") and insert ("subsection (3)(a)").

The noble Viscount said: My Lords, I believe that I can explain the purpose of this amendment quite briefly. Clause 11(8) as presently drafted provides for holders of property liable to confiscation to make representations to the High Court before their property is realised. We believe that that right to make representations should be extended so that those whose property is subject to a charging order cat) be heard before the charge is enforced. That seems Only just. I beg to move.

On Question, amendment agreed to.

Clause 12 [Application of proceeds of realisation and other sums]:

Lord Glenarthur moved Amendment No. 60:

Page 14, line 13, at beginning insert ("Subject to subsection (2) below").

The noble Lord said: My Lords, with Amendment No. 60 I should like, with the leave of your Lordships, to speak to Amendments Nos. 61, 62, 64 and 66. The first four amendments to Clause 12 are merely drafting amendments designed to tidy up the wording of subsection (1). The final amendment, however, arises from an important point which was raised by the noble Lord, Lord Mishcon, in Committee. He proposed that the High Court should be required to hear representations from the offender before giving directions as to the distribution of any surplus cash left in the hands of the receiver after the confiscation order had been satisfied in full.

I expressed some reservations about that proposal because it meant that the offender would be placed in a special position to influence the distribution of surplus cash that represented the proceeds of realisation from other people's property as well as his own. Having looked at the matter again, I hope that I can meet the concern of the noble Lord, and indeed the concern of others, by proposing that any person who held property that has been realised for the purpose of satisfying the confiscation order should have a reasonable opportunity to make representations to the court before any surplus cash is distributed. I hope that meets the concerns of the noble Lord. Lord Mishcon.

Lord Mishcon

My Lords, I think that the amendment now before us is indeed an improvement on the one that I suggested. I readily accept it. I am most grateful for the most gracious way it has been dealt with.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 61:

Page 14, line 17, leave out from ("Act") to end of line 20.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 62:

Page 14, line 23, leave out from ("Act") to ("and") in line 25.

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 63 to 67:

Page 14, line 26, leave out ("available in respect of the defendant") and insert ("held by the defendant").

Page 14, line 28, leave out ("subject to subsection (2) below") and insert ("after such payments (if any) as the High Court may direct have been made out of those sums").

Page 14, line 34, leave out ("was property available in respect of the defendant") and insert ("has been realised under this Act").

Page 14, line 37, at end insert ("after giving a reasonable opportunity for such persons to make representations to the court").

Page 14, line 38, leave out subsection (3) and insert— ("(3) The receipt of any sum by a justices' clerk on account of an amount payable under a confiscation order shall reduce the amount so payable, but the sum shall be applied as follows:—

1. (a) if paid by a receiver under subsection (1) above, it shall first be applied in payment of his remuneration and expenses,
2. (b) subject to paragraph (a) above, it shall be applied in reimbursement of any sums paid by the prosecutor under section (Receivers: supplementary provisions) (2) of this Act,

and the balance shall be treated for the purposes of section 61 of the Justices of the Peace Act 1979 (application of fines, etc.) as if it were a fine imposed by a magistrates' court. In this subsection, "justices' clerk" has the same meaning as in the Justices of the Peace Act 1979.").

The noble Lord said: My Lords, these amendments are consequential. I beg to move.

On Question, amendments agreed to.

Clause 13 [Exercise of powers by High Court or receiver]:

Lord Cameron of Lochbroom moved Amendment No. 68:

Page 15, line 7, after ("Act") insert ("or on the Court of Session by sections [Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23], [Scotland: supplementary] and [Inhibitions and arrestments in Scotland] of this Act.").

The noble and learned Lord said: My Lords, Clause 13 lays down the way in which the High Court or receiver appointed under the Bill should exercise the powers granted to them by the Bill. The purpose of the amendment is to make a modification to the clause, to enable it to apply also to procedures under the Bill in Scotland. The amendment accordingly inserts references to the powers of the Court of Session under the Bill. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 69:

Page 15, line 10, leave out subsection (2) and insert— ("(2) Subject to the following provisions of this section, the powers shall be exercised with a view to making available for satisfying the confiscation order or, as the case may be, any confiscation order that may be made in the defendant's case the value for the time being of realisable property held by any person by the realisation of such property. (2A) In the case of realisable property held by a person to whom the defendant has directly or indirectly made a gift caught by this Act, the powers shall be exercised with a view to realising no more than the value for the time being of the gift. (2B) The powers shall be exercised with a view to allowing any person other than the defendant or the recipient of any such gift to retain or recover the value of any property held by him. (2C) An order may be made or other action taken in respect of a debt owed by the Crown.").

The noble Lord said: My Lords, Clause 13(2) sets out the guiding principles that are to govern the exercise of restraint, charging and realisation powers under the Bill. This amendment seeks to clarify that guidance in the light of other changes with regard to those who have received gifts from the defendant. The changes suggested to the opening part of the subsection are purely drafting changes, reflecting the new terminology now adopted elsewhere in the Bill, but subsections (2A) and (2B) now differentiate between the two separate categories of third parties; those who have received property from the defendant for less than full value and those who happen to own only a part share in property which, for reasons that are nothing to do with them, is subject to realisation under the Bill.

Restraint, charging and realisation powers are to be exercised in respect of recipients of gifts with a view to recovering no more than the current value of the gift, but any of their assets may be confiscated for that purpose. Those third parties who have not received property from the defendant for less than full value are treated differently. Although they may find that property in which they have a joint interest with the defendant or another having to be realised to satisfy a confiscation order, in those circumstances the third party will be allowed to retain or recover the value of his property.

I ought to mention here that the High Court can give directions as to the order in which property is to be realised. It would therefore be open to the court to direct that property in which an innocent third party has an interest should be realised only after the property held by the defendant, legitimately or illegitimately obtained, has been realised.

The proposed subsection (2C) introduces a new element into the Bill by specifying that debts owed by the Crown are subject to restraint and realisation under the Bill. That will ensure that funds in, for example, National Savings will be as accessible to the courts as is money placed in a bank or building society. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 70:

Page 15, line 20, leave out ("any other person") and insert ("of the recipient of any such gift").

The noble Lord said: My Lords, this is a consequential amendment. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendment No. 71:

Page 15, line 22, leave out subsection (4).

The noble Lord said: My Lords, with the leave of the House, I will speak also to Amendments Nos. 74, 75 and 76. We thought it right in preparing this Bill that account should be taken of the possibility that assets belonging to a trafficker might be tied up in bankruptcy proceedings at the time when the confiscation order is made against him, or when a restraint order is made. The way in which the Bill at present deals with the matter is this.

Clause 5(4) provides that the Crown Court should take account of such assets when determining the amount of the confiscation order. That will ensure that if assets eventually become available notwithstanding the bankruptcy proceedings, then they can be confiscated. But Clause 13 (4) provides that no action should be taken to realise such property until bankruptcy proceedings are concluded. That means that provided the bankruptcy proceedings have already reached a stage at which it plainly would be unreasonable to give priority to confiscation over the demands of the insolvency procedure, the latter will have priority.

However, once the creditors have been satisfied, any remaining property would be realised to meet the confiscation order. Under recent changes in insolvency law, property vests in a trustee only at a very late stage in the proceedings. In particular, it may do so some time after a bankruptcy order is actually made. Looking at the matter again in the light of the new system, we believe it would be reasonable to bring forward to some extent the point at which we accord creditors in insolvency priority over the restraining and confiscation procedures set out in the Bill. We believe that the right point is the making of the bankruptcy order rather than when the assets vest in a trustee. The amendments are designed to achieve that end.

We are considering whether further amendments are required to deal with the liquidation of companies as opposed to individual insolvencies. If so, then I will seek to bring such amendments forward for consideration on Third Reading. I beg to move.

Lord Mishcon

My Lords, in case any noble Lords should think that these technical amendments are coming before the House very late, there are two points I should like to make in fairness. First, those of us who have been particularly interested in this Bill have again received explanations before the amendment came before the House today which have proved most helpful. Secondly, it must be borne in mind—and I may be referring to this point hereafter—that this Bill is a real precedent in our legislation in respect of confiscation and dealing with proceeds. Therefore, a heavy burden has fallen upon those who are guiding the Minister. We appreciate the reason why these technical amendments have, possibly, come before the House at an unusually late point.

Lord Harris of Greenwich

My Lords, I think that I would agree with what has been said by the noble Lord, Lord Mishcon. Confronted with 140 amendments to a Government Bill, it is appropriate to say something about them. I join with the noble Lord in thanking the Minister for having written to us with an explanation what were the Government's intentions in the series of amendments that we are now discussing. Having said that, I very much regret that some of those amendments have arrived relatively late in the day and that some are starred Government amendments.

Bluntly, we should not be having starred Government amendments after a substantial gap between the Committee and Report stages. However, I do not wish in any way to subtract from what has been said by the noble Lord, Lord Mishcon. We are much appreciative of the explanation that has been given. However, I think that we might in future have longer notice of the amendments that are tabled.

Lord Glenarthur

My Lords, I am grateful to both noble Lords for their comments on the way that we have tried to take this matter forward. I apologise for some amendments being so late, but some are extremely technical. They have required extensive consultations within Government, and outside. That is why, regrettably, even with the long period that has elapsed since the Committee stage, it has not been possible to bring them forward earlier. I only wish that it had been possible.

On Question, amendment agreed to.

7.30 p.m.

Lord Glenarthur moved Amendments No. 72 to 76:

Page 15, line 24, leave out subsection (5).

Clause 14, page 15, line 28, leave out ("property available in respect of the defendant") and insert ("realisable property").

Page 15, line 34, leave out from beginning to ("the") and insert ("realisable property held by a person who has been adjudged bankrupt or whose estate has been sequestrated").

Page 15, line 35, leave out from ("which") to ("may") in line 36 and insert ("any property held by him").

After Clause 14, insert the following new clause:

("Bankruptcy of defendant etc.

.—(1) Where a person who holds realisable property is adjudged bankrupt—

1. (a) property for the time being subject to a restraint order made before the order adjudging him bankrupt, and
2. (b) any proceeds of property realised by virtue of section 8(4) or 11(5) or (6) of this Act for the time being in the hands of a receiver appointed under section 8 or 11 of this Act,

is excluded from the bankrupt's estate for the purposes of Part III of the Insolvency Act 1985.

(2) Where a person has been adjudged bankrupt, the powers conferred on the High Court by sections 8 to 12 of this Act or on a receiver so appointed or on the Court of Session by section [Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23], [Scotland: supplementary] and [Inhibitions and arrestments in Scotland] shall not be exercised in relation to—

1. (a) property for the time being comprised in the bankrupt's estate for the purposes of that Part,
2. (b) property in respect of which his trustee in bankruptcy may (without leave of court) serve a notice under section 154 or 155 of that Act (after-acquired property and tools, clothes etc. exceeding value of reasonable replacement), and
3. (c) property which is to be applied for the benefit of creditors of the bankrupt by virtue of a condition imposed under section 127(2)(c) of that Act.

(3) Nothing in that Act shall be taken as restricting, or enabling the restriction of, the exercise of the those powers.

(4) Subsection (2) above does not affect the enforcement of a charging order—

1. (a) made before the order adjudging the person bankrupt, or
2. (b) on property which was subject to a restraint order when the order adjudging him bankrupt was made.

(5) Where, in the case of a debtor, an interim receiver stands appointed under section 133 of that Act and any property of the debtor is subject to a restraint order—

1. (a) the powers conferred on the receiver by virtue of that Act do not apply to property for the time being subject to the restraint order,
2. (b) section 134(6) of that Act (receiver's immunity), as it applies to the receiver by virtue of section 133(3) of that Act, shall have effect in relation to such property as if references to such property were substituted for references to property which is not comprised in the bankrupt's estate, and
3. (c) any such property in the hands of the receiver shall be dealt with in such manner as the High Court may direct.

(6) Where a person is adjudged bankrupt and has directly or indirectly made a gift caught by this Act—

1. (a) no order shall be made under section 174 or 21 2 of that Act (avoidance of certain transactions) in respect of the 1107 making of the gift at any time when proceedings for a drug trafficking offence have been instituted against him and have not been concluded or when property of the person to whom the gift was made is subject to a restraint order or charging order, and
2. (b) any order made under either of those sections after the conclusion of the proceedings shall take into account any realisation under this Act of property held by the person to whom the gift was made.

(7) In any case in which a petition in bankruptcy is presented, or a receiving order or adjudication in bankruptcy is made, before the date on which Part III of that Act comes into force, this section has effect with the following modifications—

1. (a) for references to the bankrupt's estate for the purposes of Part III of the Insolvency Act 1985 there are substituted references to the property of the bankrupt for the purposes of the Bankruptcy Act 1914.
2. (b) for references to the Act of 1985 and sections 127(2)(c), 133, 174 and 212 of that Act there are respectively substituted references to the Act of 1914 and to sections 26(2), 8, 27 and 42 of that Act,
3. (c) the references in subsection (5) to an interim receiver appointed as there mentioned include, where a receiving order has been made, a reference to the receiver constituted by virtue of section 7 of the Act of 1914, and
4. (d) subsections (2)(b) and (5)(a) and (b) are omitted.")

The noble Lord said: My Lords, these amendments are consequential and I beg to move them en bloc.

On Question, amendments agreed to.

Lord Cameron of Lochbroom moved Amendment No. 77:

After Clause 14, insert the following new clause:

("Sequestration in Scotland of defendant etc.

.—(1) Where the estate of a person who holds realisable property is sequestrated—

1. (a) property for the time being subject to a restraint order made before the award of sequestration, and
2. (b) any proceeds of property realised by virtue of section 8(4) or 11(5) or (6) of this Act for the time being in the hands of a receiver appointed under section 8 or 11 of this Act,

is excluded from the debtor's estate for the purposes of the Bankruptcy (Scotland) Act 1985.

(2) Where an award of sequestration has been made, the powers conferred on the High Court by sections 8 to 12 of this Act or on a receiver so appointed or on the Court of Session by section [Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23], [Scotland: supplementary] and [Inhibitions and arrestments in Scotland] shall not be exercised in relation to—

1. (a) property comprised in the whole estate of the debtor within the meaning of section 31(8) of that Act,
2. (b) any income of the debtor which has been odered, under subsection (2) of section 32 of that Act, to be paid to the permanent trustee or any estate which, under subsection (6) of that section, vests in the permanent trustee.

(3) Nothing in that Act shall be taken as restricting, or enabling the restriction of, the exercise of those powers.

(4) Subsection (2) above does not affect the enforcement of a charging order—

1. (a) made before the award of sequestration, or
2. (b) on property which was subject to a restraint order when the award of sequestration was made.

(5) Where, during the period before sequestration is awarded, an interim trustee stands appointed under the proviso to section 13(1) of that Act and any property in the debtor's estate is subject to a restraint order—

1. (a) the powers conferred on the trustee by virtue of that Act do not apply to property for the time being subject to the restraint order,
2. (b) the trustee, if he seizes or disposes of any property for the time being subject to the restraint order and, when he does so, believes and has reasonable grounds for believing that he is entitled (whether in pursuance of an order of a court or otherwise) to do so—
1. (i) shall not (except insofar as the same has been caused by his negligence) be liable to any person in respect of any 1108 loss or damage resulting from his seizure or disposal of the property; and
2. (ii) shall have a lien on the property, or the proceeds of its sale for such of the expenses of the sequestration as were incurred in connection with the seizure or disposal, and
3. (c) any such property in the hands of the trustee shall be dealt with in such manner as the High Court may direct.

(6) Where the estate of a person is sequestrated and he has directly or indirectly made a gift caught by this Act—

1. (a) no decree shall be granted under section 34 or 36 of that Act (gratuitous alienations and unfair preferences) in respect of the making of the gift at any time when proceedings for a drug trafficking offence have been instituted against him and have not been concluded or when property of the person to whom the gift was made is subject to a restraint order or charging order, and
2. (b) any decree made under either of those sections after the conclusion of the proceedings shall take into account any realisation under this Act of property held by the person to whom the gift was made.")

The noble and learned Lord said: My Lords, this new clause regulates the relationship between the provisions of this Bill and Scottish sequestrations in the same way as the preceding new clause in Amendment No. 76 regulates the relationship with English bankruptcies. This is necessary because the Bill extends to property in Scotland and because Scottish bankruptcies extend to property in England.

As I said, the relationship between the provisions of the Bill and the sequestrations under Scots law is regulated in exactly the same way as the Bill will now regulate the relationship with English bankruptcies. The basic policy is that once property has been made subject to a restraint order it cannot subsequently be sequestrated. Conversely, once property has been sequestrated it will not be possible to restrain and realise it under the provisions of this Bill.

If your Lordships wish, I can expand a little on the subsections but otherwise I beg to move.

On Question, amendment agreed to.

Viscount Davidson moved Amendment No. 78:

After Clause 14, insert the following new clause:

("Receivers: supplementary provisions.

.—(1) Where a receiver appointed under section 8 or 11 of this Act or in pursuance of a charging order takes any action—

1. (a) in relation to property which is not realisable property, being action which he would be entitled to take if it were such property,
2. (b) believing, and having reasonable grounds for believing, that he is entitled to take that action in relation to that property,

he shall not be liable to any person in respect of any loss or damage resulting from his action except in so far as the loss or damage is caused by his negligence.

(2) Any amount due in respect of the remuneration and expenses of a receiver so appointed shall, if no sum is available to be applied in payment of it under section 12(3)(a) of this Act, be paid by the prosecutor or, in a case where proceedings for a drug trafficking offence are not instituted, by the person on whose application the receiver was appointed.").

The noble Viscount said: My Lords, this new clause contains supplementary provisions relating to receivers who are appointed by the courts in connection with restraint or realisation of assets. Subsection (1) protects the receiver from liability in respect of loss or damage resulting from action he takes in relation to property which turns out not to be realisable property, provided he believes on reasonable grounds that he is entitled to take such action and does not act negligently.

This provision is intended to cover cases where the receiver acts against property which he believes reasonably, but in the event erroneously, to be realisable property. Of course, the holder of such property would be entitled to receive the proceeds of the realisation. I believe that such a provision is essential if the receiver is to be able to discharge his statutory duties speedily and effectively.

Your Lordships will recall that Clause 12(3), as amended, provides for the receiver's costs to be met out of confiscated assets. This will only be possible in cases where a confiscation order is imposed and the proceeds of realisation are sufficient to meet the receiver's costs in full. There will be other cases where the receiver is appointed but the defendant is acquitted or sufficient proceeds are realised. The amendment we propose provides that in such cases the receiver's costs, or the balance of them, shall be paid by the prosecutor. I beg to move.

On Question, amendment agreed to.

Clause 15 [Compensation]:

Lord Glenarthur moved Amendment No. 79:

Page 16, line 25, leave out ("property available in respect of the defendant") and insert ("realisable property").

The noble Lord said: My Lords, this is a consequential amendment. I beg to move.

On Question, amendment agreed to.

Lord Cameron of Lochbroom moved Amendment No. 80:

Page 16, line 40, leave out from ("or) to ("or) in line 42 and insert ("the Court of Session under section [Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23], [Scotland: supplementary] or [Inhibitions and arrestments in Scotland].").

The noble and learned Lord said: My Lords, this is purely a drafting amendment consequential upon the proposed deletion of Clause 16 from the Bill and the insertion of new clauses dealing with enforcement in Scotland of orders under the Bill. I beg to move.

On Question, amendment agreed to.

Lord Cameron of Lochbroom moved Amendment No. 81:

After Clause 15, insert the following new clause:

("Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23.

.—(1) An order to which this section applies shall, subject to this section and section [Scotland: supplementary] of this Act, have effect in the law of Scotland but shall be enforced in Scotland only in accordance with this section and that section.

(2) A receiver's functions under or for the purposes of section 8, 11 or 12 of this Act shall, subject to this section and section [Scotland: supplementary] of this Act, have effect in the law of Scotland.

(3) If an order to which this section applies is registered under this section—

1. (a) the Court of Session shall have, in relation to its enforcement, the same power;
2. (b) proceedings for or with respect to its enforcement may be taken; and
3. (c) proceedings for or with respect to any contravention of such an order (whether before or after such registration) may be taken

as if the order had originally been made in that Court.

(4) Nothing in this section enables any provision of an order which empowers a receiver to do anything in Scotland under section 11(3)(a) of this Act to have effect in the law of Scotland.

(5) The orders to which this section applies are orders of the High Court—

1. (a) made under section 8, 11, 12 or 23 of this Act;
2. (b) relating to the exercise by that Court of its powers under those sections; or
3. (c) relating to receivers in the performance of their functions under sections 8, 11 or 12 of this Act,

but not including an order in proceedings for enforcement of any such order.

(6) References in this section to an order under section 8 of this Act include references to a discharge under section 7(4) of this Act of such an order.

(7) In this section and in sections [Scotland: supplementary] and [Proof in Scotland of High Court Orders], "order" means any order, direction or judgment (by whatever name called)

(8) Nothing in any order of the High Court under section 11(6) of this Act prejudices any enactment or rule of law in respect of the recording of deeds relating to heritable property in Scotland or the registration of interests therein.").

The noble and learned Lord said: My Lords, this is one of the new clauses. It provides for recognition and enforcement in Scotland of orders made in England by the High Court under the terms of this Bill. It provides that such orders will be given effect in Scotland and will be enforceable in the same way as orders made by the Court of Session once they have been registered in that court. This general pattern of automatic recognition and enforcement upon registration is precedented in the European Judgments Convention and in the Civil Jurisdiction and Judgments Act 1982. The clause also makes clear that receivers appointed under the terms of the Bill can exercise their functions in Scotland.

I shall be happy to explain in more detail if any of your Lordships wish; otherwise I beg to move.

On Question, amendment agreed to.

Lord Cameron of Lochbroom moved Amendment No. 82:

After Clause 15, insert the following new clause:

("Scotland: supplementary.

.—(1) The Court of Session shall, on application made to it in accordance with rules of court for registration of an order to which section [Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23] applies, direct that the order shall, in accordance with such rules, be registered in that Court.

(2) Subsections (1) and (3) of section [Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23] of this Act and subsection (1) above are subject to any provision made by rules of court—

1. (a) as to the manner in which and conditions subject to which orders to which that section applies are to be enforced in Scotland;
2. (b) for the sisting of proceedings for enforcement of such an order;
3. (c) for the modification or cancellation of the registration of such an order if the order is modified or revoked or ceases to have effect.

(3) This section and section [Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23] are without prejudice to any enactment or rule of law as to the effect of notice or the want of it in relation to orders of ihe High Court.

(4) The Court of Session shall have the like power to make an order under section 1 of the Administration of Justice (Scotland) Act 1972 (extended power to order inspection of documents etc.) in relation to proceedings brought or likely to be brought under this Act in the High Court as if those proceedings had been brought or were likely to be brought in the Court of Session.

(5) The Court of Session may, additionally, for the purpose of—

1. (a) assisting the achievement in Scotland of the purposes of orders to which section [Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23] of this Act applies; or
2. (b) assisting receivers performing functions there under or for the purposes of section 8, 11 or 12 of this Act.

make such orders and do otherwise as seems to it appropriate.")

The noble and learned Lord said: My Lords, this clause contains certain supplementary provisions which will assist the Court of Session to carry out its role in relation to cross-Border enforcement of the Bill's provisions. I beg to move.

On Question, amendment agreed to.

Lord Cameron of Lochbroom moved Amendment No. 83:

After Clause 15, insert the following new clause:

("Inhibition and arrestment of property in Scotland.

.—(1) On the application of the prosecutor, the Court of Session may, in respect of any property in Scotland, being property to which a restraint order registered in that Court relates—

1. (a) where the property is heritable, grant warrant for inhibition in respect of the property against any person with an interest in it; or
2. (b) where the property is moveable and would, if the person entitled to it were a debtor, be arrestable property grant warrant for arrestment of the property,

and on the grant of such a warrant the enactments and rules of law relating to inhibition and arrestment shall, subject to the provisions of this section, apply respectively as if the warrant had been granted on the dependence of an action for debt at the instance of the prosecutor against the person against whom the warrant for inhibition is granted or, as the case may be, whose property falls to be arrested.

(2) Section 155 of the Titles to Land Consolidation (Scotland) Act 1868 (effective date of inhibitions) shall apply in relation to an inhibition proceeding upon a warrant under this section.

(3) In the application of section 158 of the said Act of 1868 (recall of inhibitions) to an inhibition proceeding upon a warrant under this section, the references to a particular Lord Ordinary in the Court of Session shall be construed as reference to any such Lord Ordinary.

(4) Any power of the Court of Session to recall, loose or restrict inhibitions or arrestments shall, in relation to an inhibition or arrestment proceeding upon a warrant under this section and without prejudice to any other consideration lawfully applying to the exercise of the power, be exercised with a view to achieving the purposes specified in section 13 of this Act.

(5) The Court of Session shall have power to restrict the effect of an inhibition proceeding upon a warrant under this section to particular property.

(6) The fact that such an inhibition or arrestment has been executed as respects any property shall not prejudice the exercise of a receiver's powers under or for the purposes of section 8, 11 or 12 of this Act in respect of that property.

(7) An inhibition or arrestment under this section shall cease to have effect upon the restraint order to which it relates ceasing to have effect, and, where an inhibition ceases to have effect, it shall thereupon be the duty of the prosecutor to discharge it.").

The noble and learned Lord said: My Lords, this new clause gives power to the Court of Session to grant warrant for the inhibition or the arrestment of property in Scotland which is the subject of a restraint order imposed by the High Court in England and which has been registered in the Court of Session.

Inhibition and arrestment are measures of preventing the disposal of property which are peculiar to civil procedure and are effective against heritable and moveable property, respectively. They will represent useful weapons in the armoury of the courts in attacking the profits of drug trafficking crime. I beg to move.

On Question, amendment agreed to.

Lord Cameron of Lochbroom moved Amendment No. 84:

After Clause 15, insert the following new clause:

("Proof in Scotland of High Court Orders.

.—(1) A document purporting to be a copy of an order under or for the purposes of this Act by the High Court and to be certified as such by a proper officer of that Court shall, in Scotland, be sufficient evidence of the order.").

The noble and learned Lord said: My Lords, the purpose of this new clause is to specify that a certified copy of an order made by the High Court in England would be sufficient evidence of the order in Scotland. This is necessary in particular to enable the procedure for registration in the Court of Session to be carried out. I beg to move.

On Question, amendment agreed to.

Clause 16 [Enforcement of orders in Scotland]:

Lord Cameron of Lochbroom moved Amendment No. 85:

Leave out Clause 16.

The noble and learned Lord said: My Lords, this is consequential upon the introduction of the new clauses which make it unnecessary to retain Clause 16 in the Bill. I beg to move.

On Question, amendment agreed to.

Clause 17 [Assisting another to retain the benefit of drug trafficking]:

Lord Glenarthur moved Amendment No. 86:

Page 17, line 38, at beginning insert ("Subject to subsection (2A) below").

The noble Lord said: My Lords, with the leave of the House, I shall speak also to Amendments Nos. 89 and 90. These amendments are designed to implement the recommendation put forward by the Select Committee on Home Affairs in another place that banks should be given statutory protection against actions for breach of confidence if they volunteer to the authorities suspicions that a client's finances appear to be connected with drug trafficking.

The noble and learned Lord, Lord Denning, tabled an amendment on this matter in Committee but withdrew it pending the outcome of our consultations with the banks about the Select Committee's recommendation. I know that the idea found a good deal of sympathy among your Lordships. Indeed, we are indebted to your Lordships for the proposals put forward first by the noble and learned Lord and supported by others. Some of the features in those amendments will be apparent in the amendment now before us.

I am pleased to report that the banks were very positive in their response to the recommendation made by the Select Committee. The proposed subsection (2A) of Clause 17 is intended to give them statutory protection from any action for breach of confidence or duty arising out of their contractual obligations to their clients. However, in considering these issues we agreed with the noble and learned Lord, Lord Denning, that there was no reason to confine the protection to banks. Like him, we wish to include other financial institutions such as building societies. Indeed, we wish to go wider and cover all who might develop suspicions that a person's finances were connected with drug trafficking but might at present feel inhibited by their contractual obligations from disclosing such suspicions. This would include not only those who handle the suspect funds but others such as auditors, accountants and employees who might notice something suspicious about the way funds were handled without themselves being involved.

When we considered this matter during Committee there was some discussion as to the appropriate rank of officer to whom information ought to be disclosed. The Government have looked at this question with very great care and have taken the view that it is unnecessary to impose any restriction here. Some people might feel more ready to disclose their suspicions if they could approach an officer with whom they have had some previous contact. The amendment therefore just refers to "a constable", which, by virtue of Clause 30, includes an officer of Customs and Excise.

The noble and learned Lord, Lord Denning, in the amendment that I mentioned earlier, suggested that financial institutions should have protection not only for their disclosure but for any action subsequently taken on the directions of the police. Though we were uneasy about the concept of the police giving directions to the banks, we could see very strong advantages in the banks and others being able to continue to handle a suspected trafficker's account, with the knowledge of the police or Customs, while his activities were being investigated.

The difficulty is that Clause 17 as presently drafted effectively prevents that. Once a bank's suspicions had been aroused, it would have little option but to close the suspect's account; otherwise, inevitably it would at some point commit the laundering offence. But closing the account would warn the client that he was under suspicion. The amendment would thus allow a person or institution to continue to handle the suspected trafficker's money provided that the police or Customs had been or were immediately to be informed.

I believe that these new provisions will be of considerable assistance to the investigating authorities and I am most grateful to the noble and learned Lord who sadly is not in his place tonight for his initiative in raising this matter of co-operation between the financial institutions and those investigating drug trafficking. I beg to move.

Lord Mishcon

My Lords, perhaps I may make the position of those sitting on these Benches absolutely clear. From the very start of this legislation—and indeed before it—we were committed to doing all that we possibly could to assist the Government in dealing with this notoriously evil trade. Were it in connection with any other matter at all I should hesitate before coming to this Dispatch Box and saying on behalf of my noble friends that we agree to a statutory provision which is absolutely unprecedented in our criminal law.

It literally means anyone. It is not even limited to a bank. It covers an employee under a contract of service which, if not expressly then by implication, says, stipulates or implies that that employee has to be loyal to his employer and does not disclose his employer's secrets; or a bank, which shares the sacred relationship that has existed over the centuries between bank and customer. All that goes out of the window of our law—if I may put it that way. In its place, if somebody has a reasonable belief that the proceeds at which he is looking—whether he is concerned with them as an accountant, auditor, bank, building society or post office—have something to do with drug trafficking, then he can inform an officer of the law. That is whether the officer is a police constable or a Customs official. If he has a reasonable belief, he will be exonerated from any contractual obligation or any confidential obligation.

I am making this utterance very seriously because it ought to be on the record. I hope that your Lordships will agree with this amendment; but I hope that it will be recorded in our Official Report for all time that this House has not allowed this amendment to become a precedent, whether in revenue law or in any other aspect of our criminal law, to a like provision.

These are exceptional circumstances, because our country—and indeed lands beyond our country—are threatened with this absolute plague, and we have to deal with it exceptionally as we have dealt with terrorism. However, this is not to be an open invitation to have these provisions copied hereafter.

7.45 p.m.

Lord Harris of Greenwich

My Lords, I should like to begin by expressing the regret of the noble and learned Lord, Lord Denning, that he is unable to be present today. As the noble Lord, Lord Glenarthur, has said, this was an amendment that was put down by the noble and learned Lord and supported from these Benches. Unhappily, the noble and learned Lord has an engagement which made it impossible for him to be with your Lordships, though he wants to reassure the Minister that he will do his best to be present on the Third Reading of this Bill and in the interval between now and then he will wish to consider the terms of this particular amendment, in order to ensure that as far as he is concerned in his view it is wholly adequate for its purpose.

Having said that, perhaps I may say, with respect to the noble Lord, Lord Mishcon—whose views on this matter I share almost completely—I am afraid that on this particular occasion I am unable to agree with him. As I think he recognises, I hope that this provision will indeed provide a precedent for further action in this area. I hope to explain why, in my view,it would be impossible to limit a provision of this sort to drug trafficking; to explain why that is so; and to express my concern that the amendment deals exclusively with the issue of drug trafficking. It does so for the simple reason that that is the issue covered by the Long Title of the Bill.

Amendment No. 89 deals with the situation in which: a person discloses to a constable a suspicion or belief that any funds or investments are derived from or used in connection with drug trafficking". But how does the bank manager or the manager of a building society know or have an honest belief that this money in fact relates to drug trafficking?

Indeed, what happens when he is confronted with a customer or client who comes in and deposits a large sum of money? Not so long ago in a bank in this city a sum of several hundred thousand pounds was passed over the counter in used £5 and £10 notes, and of course there was no disclosure made to anyone. The reasons why there was no disclosure was because of the principle of confidentiality. The matter only arose later as a result of subsequent police inquiries.

In the future, if a bank manager suspects that the person concerned has criminal connections, then he will have to ask himself the further question: "Do I believe that this money is part of a laundering deal in relation exclusively to drug trafficking?" He will only be protected if he forms that belief, but how in fact will the bank manager form that view? He may believe that it arises from serious crime but how will he know that it is drug trafficking?

I want to know from the Minister something which is exactly the reverse of what the noble Lord, Lord Mishcon, has asked for. Is the Minister prepared to give some form of undertaking that the Government are prepared to look at applying provisions of this character to other serious criminal offences?

I must explain why that is necessary. First, I think that it is an illusion to imagine that drug trafficking can be treated as an isolated crime: it cannot. If one asks any senior police officer with experience in this area in this country, in any other part of Western Europe or in the United States, he will say that we are confronted with the existence of highly sophisticated criminal syndicates. The operators move effortlessly from one form of serious crime to another: from drug trafficking to armed robbery, from counterfeit currency operations to large-scale fraud and then back again to drug trafficking. As I indicated, in a recent case—and there are no doubt plenty of other examples—a large sum of money was passed over the counter of a bank in London in what subsequently became clear were highly suspicious circumstances.

I repeat that what I want explained by the noble Lord, Lord Glenarthur, is how the bank manager can satisfactorily answer the question to himself, not that the money arises from a crime but that it arises in circumstances making it likely that it relates exclusively to drug trafficking. If he says that the Government are taking this step at the moment because this is a Bill dealing with drug trafficking but that they will apply the provision more widely to a limited category of serious offences when we come to the Criminal Justice Bill which will be before us in the next Session of Parliament, that would be an adequate answer. But if he says that the provision will relate exclusively to drug trafficking and there is no thought in the Government's mind at the moment that in the short term they will extend it, I must tell him that this amendment will have remarkably little effect. The bank manager will never be able satisfactorily to persuade himself that sums of money paid over in highly suspicious circumstances relate exclusively to drug trafficking. That is an issue that I very much hope he will answer today.

Arising directly from that point, the noble Lord, Lord Glenarthur, said that there had been discussions and negotiations (and obviously that is so) with the banks and no doubt with the building societies too. They have agreed, of course, that they will implement such a provision, but how do they intend to monitor it and police it themselves? That raises complicated questions regarding the management of financial institutions. How will they deal with that?

Lastly—and the Minister and I have been in correspondence on this matter fairly recently—there is the question of how the legislation will apply to the Channel Islands and the Isle of Man. As he knows from the correspondence, a major criminal investigation is taking place in the Isle of Man at the moment which has direct implications for banks in this country, in the United States and in the British Virgin Islands. He indicated in his letter what the insular authorities propose to do, but I should be grateful if he would repeat that this afternoon because it is desirable to have it on the record.

I do not propose to repeat the arguments that we had on the last occasion. As the noble Lord knows, neither the noble and learned Lord, Lord Denning, nor I are convinced that the voluntary system by itself will work. We welcome the move in the direction that is now being taken, but in our view it is considerably less than half a loaf.

As the noble and learned Lord and I pointed out at the Committee stage, the situation in the United States is quite different. Under the terms of their bank secrecy legislation there is a requirement that banks in the United States should disclose any payment of over 10,000 dollars paid across the counter. The noble Lord, Lord Glenarthur, explained why the Government at the moment were not prepared to move in that direction, though his colleague, the Parliamentary Under-Secretary, has indicated that there might be movement in the future; and that we welcome. But the American authorities—and this comes back to the point of substance—do not apply their legislation and direct it exclusively against drug traffickers. That is what we are doing in this Bill so far as the banks and financial institutions are concerned.

At first sight—and one has only had the opportunity to consider the matter over the past 24 hours—it seems to me a matter of serious concern that at the moment the Bill is drafted in this form. If it is to be effective and if banks are to be encouraged to disclose such information when they entertain substantial suspicion, what a number of us are concerned about is that they will be inhibited from disclosing it because the new clause is drawn in such a way that they will be protected only if they form an honest belief that the money that is being paid across the counter is basically the proceeds of drug trafficking. For the life of me, I do not see how they can possibly entertain that belief.

Lord Glenarthur

My Lords, I note the comments made by both noble Lords about the amendment. I particularly note the remarks of the noble Lord, Lord Mishcon, when he wanted to get on record the fact that we were dealing with a measure, as has been said on many occasions, of unusual character because it is dealing with a peculiarly vile trade. I fully understand his concern about that and also his hope that the measure would not be extended to other sorts of crime, though the noble Lord, Lord Harris, did not agree with him.

Let me start by answering the first question of the noble Lord, Lord Harris, and then come back to the point raised by the noble Lord, Lord Mishcon, in greater detail. It may be difficult for the bank to establish that money is money from drug proceeds in the absence of express information or knowledge about the suspect or his associates. But in some cases the information, or indeed circumstantial evidence, may be available. Furthermore, the bank can disclose a suspicion. Certainly that information or evidence is not needed in order for the protection offered by the amendment to apply.

There will be cases in which a bank suspects that money is the proceeds of crime but cannot say whether it is the proceeds of drug trafficking. In order to avoid the possibility of the laundering offence being committed the bank would be wise to proceed on the basis that it is drugs money, and the new protection would extend to it if it did. Although one cannot guarantee it, if the banks follow the procedure that I have outlined not only are they protected to that extent but they will also have a pretty good idea that that is where the money has come from.

8 p.m.

That leads me to the point raised by the noble Lord, Lord Mishcon, and argued against by the noble Lord, Lord Harris, that that proposal should not be extended in any other circumstances or, if it were, it would be a matter which would be debated hotly. I have no doubt that if it were to come forward in any other matter, that is what would happen and the noble Lord would state his ground clearly.

I shall bear in mind what the noble Lord, Lord Mishcon, says. I do not suppose that he would expect me to say otherwise. I shall have to balance that by saying that I shall bear in mind clearly what the noble Lord, Lord Harris, has said. There does not seem to be anything else that I can say because nothing has yet appeared which has that measure contained in it.

Lord Mishcon

My Lords, I interrupt only to ask the noble Lord whether he could make a clear statement for the record that the Government understand perfectly well that this is an exceptional power in exceptional circumstances. That is all I ask for.

Lord Glenarthur

My Lords, I can say that it is an exceptional power and the circumstances are exceptional. I can also say that from time to time other exceptional circumstances arise but I cannot say precisely what they will be.

As to how the banks will monitor the disclosure system, the banks have been extremely positive in their response to the Home Affairs Committee recommendations. I am sure that they want the system to work effectively. Monitoring arrangements must primarily be a matter for the banks. I do not think that the noble Lord would expect otherwise. We could discuss the whole question of monitoring with them, and that may well be the sensible way to proceed.

As for the Channel Islands, the Home Office has kept the island authorities in close touch with the Government's reasoning behind the Bill. The islands have all given assurances that they will enact parallel legislation to ensure that so far as possible they are not used as havens for the movement of drugs or the proceeds of drugs. To that end, Orders in Council for each of the islands will be drafted as soon as the Bill has been debated by Parliament, to apply similar provisions in the islands to allow for reciprocity among the respective jurisdictions.

In the meantime, I understand that there is close co-operation between enforcement agencies here and in the islands. I saw evidence of that at the end of last year on all matters concerning drugs. There is no doubt that the islands are determined that their position as offshore finance centres should not be exploited for the laundering of money derived from drug trafficking. I hope that that gives the noble Lord the reassurance for which he is looking.

On Question, amendment agreed to.

Viscount Davidson moved Amendment No. 87:

Page 18, line 6, leave out ("or having reasonable grounds to suspect").

The noble Viscount said: My Lords, some concern was expressed in another place about the formulation of the laundering offence and, in particular, about the implications for honest bank staff who might inadvertently find themselves handling the proceeds of drug trafficking. The Government gave careful consideration to the appropriate mental element of the offence when preparing the legislation and proposed that the launderer should have to act knowing or suspecting or having reasonable grounds to suspect that the person he was assisting was or had been involved in drug trafficking.

The objective test of, "having reasonable grounds to suspect" was included because we wanted to ensure that a person would not escape conviction by turning a blind eye to circumstances which should have aroused his suspicion. However, in the light of the concern expressed in another place and in view of the seriousness of the offence and the severity of its penalties, we have concluded on reflection that it would be right to omit that objective test so that the prosecution will now have to establish actual knowledge or suspicion on the part of the defendant. It would not be right to leave open the possibility of punishing mere inadvertence. I beg to move.

Lord Mishcon

My Lords, this is a very appropriate amendment.

On Question, amendment agreed to.

Viscount Davidson moved Amendment No. 88:

Page 18, line 11, after ("which") insert ("in whole or in part").

The noble Viscount said: My Lords, Clause 17(2) provides that the laundering offence will be committed not only where the property handled is itself the proceeds of drug trafficking but when it represents such proceeds directly or indirectly in the hands of the trafficker. However, property is often acquired with funds from a variety of sources. A particular asset may therefore be acquired partly with the proceeds of drug trafficking and partly from other funds. This amendment will ensure that a person can be proceeded against for the laundering offence where it can be shown that the property handled was at least partly acquired by the trafficker from the proceeds of drug trafficking. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 89 to 91:

Page 18, line 13, at end insert— ("(2A) Where a person discloses to a constable a suspicion or belief that any funds or investments are derived from or used in connection with drug trafficking or any matter on which such a suspicion or belief is based—

1. (a) the disclosure shall not be treated as a breach of any restriction upon the disclosure of information imposed by contract, and
2. (b) if he does any act in contravention of subsection (1) above and the disclosure relates to the arrangement concerned, he does not commit an offence under this section if the disclosure is made in accordance with this paragraph, that is—
1. (i) it is made before he does the act concerned, being an act done with the consent of the constable, or
2. (ii) it is made after he does the act, but is made on his initiative and as soon as it is reasonable for him to make it.").

Page 18, line 22, at end insert— ("or

1. (c) that—
1. (i) he intended to disclose to a constable such a suspicion, belief or matter as is mentioned in subsection (2A) above in relation to the arrangement, but
2. (ii) there is reasonable excuse for his failure to make disclosure in accordance with subsection (2A)(b) above.").

Clause 19, page 20, line 39, leave out ("prosecuting authority") and insert ("prosecutor").

On Question, amendments agreed to.

Clause 20 [Order to make evidence available]:

Lord Cameron of Lochbroom moved Amendment Nos. 92 to 102:

Page 21, line 13, after ("constable") insert ("or, in Scotland, the procurator fiscal").

Page 21, line 14 after ("judge") insert ("or, in Scotland, the sheriff").

Page 21, line 17, after ("judge") insert ("or, as the case may be, the sheriff").

Page 21, line 26, after ("judge") insert ("or, as the case may be, the sheriff").

Page 22, line 9, after ("judge") insert ("or, as the case may be, the sheriff").

Page 22, line 11, after ("constable") insert ("or, in Scotland, the procurator fiscal").

Page 22, line 14, after ("Rules") insert ("or, as respects Scotland, rules of court").

Page 22, line 18, after ("order") insert ("or a Circuit judge").

Clause 21, page 22, line 37, after ("constable") insert ("or, in Scotland, the procurator fiscal").

Clause 21, line 38, after ("judge") insert ("or, in Scotland, the sheriff").

Clause 21, line 40, after ("judge") insert ("or, as the case may be, the sheriff").

The noble and learned Lord said: My Lords, the amendments make the adaptations to Clauses 20 to 22 that are necessary for their operation in Scotland in order to ensure that investigations into drug trafficking can be pursued effectively throughout Great Britain. It is necessary to ensure that the Scottish authorities are equipped with adequate powers to undertake any investigations required.

The amendments to Clauses 20 and 21 contained in Amendments Nos. 92 to 102 will therefore enable the procurator fiscal to apply to a sheriff for an order to make information available to the police or for a warrant empowering the police to search for material if that is necessary in connection with an investigation into drug trafficking. This statutory provision is required because the existing common law powers of the police in Scotland would be unlikely to enable such wide investigations to be made at a sufficiently early stage in the investigation.

It is of course essential in cases of suspected drug trafficking that the police should be able to act at an early stage not only to gather information which may be needed as evidence in the proceedings but to identify assets which may need to be made subject to restraint orders.

The amendment to Clause 22 and Amendment No. 109 provide Scottish definitions for certain terms used in Clauses 20 and 21. As it stands, Clause 22 applies definitions of terms by reference to the Police and Criminal Evidence Act 1984 and that Act does not extend to Scotland.

The only point that I would raise on this matter is that we have not attempted to provide an exclusion equivalent to "excluded material" for there appears to be no similar exclusion at common law in Scotland for police powers of search. It seems inappropriate therefore to provide one especially for the purposes of these provisions. I would therefore, with the leave of the House, beg to move Amendments Nos. 92 to 102.

On Question, amendments agreed to.

Viscount Davidson moved Amendments Nos. 103 to 107:

Page 22, line 45, at end insert— ("(b) that the conditions in subsection (2A) below are fulfilled, or (c) that the conditions in subsection (3) below are fulfilled.

(2A) The conditions referred to in subsection (2)(b) above are—

1. (a) that there are reasonable grounds for suspecting that a specified person has carried on or has benefited from drug trafficking, and").

Page 23, line 1, leave out ("subsection (3) of that section") and insert ("section 20(4)(6) and (c) of this Act").

Page 23, line 2, leave out ("but") and insert ("and (c)").

Page 23, line 14, leave out from ("material") to end of line 15.

Page 23, line 16, leave out ("Those conditions") and insert ("The conditions referred to in subsection (2)(c) above").

The noble Viscount said: My Lords, these are all drafting amendments. I beg to move.

On Question, amendments agreed to.

Clause 22 [Sections 20 and 21: supplementary provisions, 1985]:

Lord Cameron of Lochbroom moved Amendment Nos. 108 and 109:

Page 24, line 10, at beginning insert ("Subject to subsection (3) below,").

Page 24, line 12, at end insert—

(" (3) As respects Scotland, in sections 20 and 21 of this Act the references to excluded material shall be omitted and—

"items subject to legal professional privilege" means—

1. (a) communications between a professional legal adviser and his client;
2. (b) communications made in connection with or in contemplation of legal proceedings and for the purposes of these proceedings,

being communications which would in legal proceedings be protected from disclosure by virtue of any rule of law relating to the confidentiality of communications; and

"premises" includes any place and, in particular includes—

1. (a) any vehicle, vessel, aircraft or hovercraft;
2. (b) any offshore installation within the meaning of section 1 of the Mineral Workings (Offshore Installations) Act 1971: and
3. (c) any tent or movable structure."

The noble and learned Lord said: My Lords, I have spoken to this amendment and Amendment No. 109. I beg to move the amendments.

On Question, amendments agreed to.

Clause 23 [Disclosure of information held by government departments]:

Lord Glenarthur moved Amendment No. 110:

Page 24, line 13, leave out from ("below") to ("the") in line 15.

The noble Lord said: My Lords, with the leave of the House, I should like also to speak to Amendments Nos. 112 to 119. This group of amendments relates to procedures set out in Clause 23 for the High Court to order the disclosure of information held by government departments. At present, such an order can only be made after proceedings have been instituted against a person for a drug trafficking offence. One of the purposes for which disclosure may he required is to facilitate the restraint of the suspect's assets. As a result of amendments to the Bill in another place, the High Court in certain circumstances will be able to make a restraint order before proceedings have been instituted. In such cases it would be convenient if the High Court was able to hear applications for disclosure of information at the same time. The proposed amendments will enable it to do so.

As presently drafted, the Bill allows the High Court to order material to be disclosed direct to the receiver or to authorise disclosure to the prosecuting authority but contains no guidance on the circumstances in which the receiver or prosecutor may in turn disclose that material to others. The amendments that we propose seek to set out the circumstances in which receivers or prosecutors can pass on information disclosed to them under Clause 23. First, the High Court will have to give the department concerned the opportunity to make representations before it authorises the disclosure of material to the receiver. The receiver will then be able to make further disclosure to the extent necessary for the exercise of his functions under the Act.

Where the court has authorised disclosure to the prosecutor, the information may be further disclosed for the purposes of functions relating to drug trafficking. This is intended to allow the disclosure of information that might be useful to the police or Customs in connection with a drug trafficking investigation whether or not that investigation relates to the same case. The change proposed to subsection (7) would bring the obligation imposed on the person who receives the order for disclosure into line with equivalent provisions in other recent legislation, notably Section 197 of the Insolvency Act 1985. I believe that these amendments serve an important purpose by clarifying the way in which the procedure set out in Clause 23 is to operate and the purposes for which the information obtained is to be used. I beg to move.

On Question, amendment agreed to.

Viscount Davidson moved Amendment No. 111:

Page 24, line 16, leave out ("prosecuting authority") and insert ("prosecutor").

The noble Viscount said: My Lords this amendment is consequential on Amendment No. 4. I beg to move.

On Question, amendment agreed to.

Lord Glenarthur moved Amendments Nos. 112 to 119:

Page 24, leave out lines 19 and 20 and insert ("produced to the court within such period as the court may specify.

(1A) The power to make an order under subsection (1) above is exercisable if—

1. (a) the powers conferred on the court by sections 8(1) and 9(1) of this Act are exercisable by virtue of subsection (1) of section 7 of this Act, or
2. (b) those powers are exercisable by virtue of subsection (2) of that section and the court has made a restraint or charging order which has not been discharged;

but where the power to make an order under subsection (1) above is exercisable by virtue only of paragraph (b) above, subsection (3) of section 7 of this Act shall apply for the purposes of this section as it applies for the purposes of sections 8 and 9 of this Act.").

Page 24, line 33, leave out ("disclosure") and insert ("production").

Page 24, line 37, leave out ("disclosure") and insert ("production").

Page 24, line 38, leave out ("disclosure") and insert ("material").

Page 24, line 38, after ("to") insert ("contain information that would").

Page 24, line 40, leave out from ("appointed") to end of line 7 on page 25 and insert (under sections 8 or 11 of this Act or in pursuance of a charging order.

(4) The court may by order authorise the disclosure to such a receiver of any material produced under subsection (1) above or any part of such material; but the court shall not make an order under this subsection unless a reasonable opportunity has been given for an officer of the department to make representations to the court.

(5) Material disclosed in pursuance of an order under subsection (4) above may, subject to any conditions continued in the order, be further disclosed for the purposes of the functions under this Act of the receiver or the Crown Court.

(5A) The court may by order authorise the disclosure to a person mentioned in subsection (5B) below of any material produced under subsection (1) above or any part of such material; but the court shall not make an order under this subsection unless").

Page 25, line 13, at end insert— (" (5B) The persons referred to in subsection (5A) above are—

1. (a) any member of a police force,
2. (b) any member of the Crown Prosecution Service, and
1123
3. (c) any officer within the meaning of the Customs and Excise Management Act 1979.

(5C) Material disclosed in pursuance of an order under subsection (5A) above may, subject to any conditions contained in the order, be further disclosed for the purposes of functions relating to drug trafficking. (5D) Material may be produced or disclosed in pursuance of this section notwithstanding any obligation as to secrecy or other restriction upon the disclosure of information imposed by statute or otherwise.").

Page 25, line 22, leave out subsection (7) and insert—

(" (7) the person on whom such an order is served—

1. (a) shall take all reasonable steps to bring it to the attention of the officer concerned, and
2. (b) if the order is not brought to that officer's attention within the period referred to in subsection (1) above, shall report the reasons for the failure to the court:

and it shall also be the duty of any other officer of the department in receipt of the order to take such steps as are mentioned in paragraph (a) above.").

On Question, amendments agreed to.

Clause 26 [Prohibition of supply etc. of articles for administering controlled drugs]:

Lord Glenarthur moved Amendments Nos. 120 to 124:

Page 27, line 9, after ("used") insert ("in circumstances where the administration is unlawful").

Page 27, line 13, leave out from beginning to ("the") in line 17 and insert—

(" (3) A person who supplies or offers to supply any article which may be used to prepare a controlled drug for administration by any person to himself or another believing that the article is to be so used in circumstances where the administration is unlawful is guilty of an offence. (3A) For the purposes of this section, any administration of a controlled drug is unlawful except.

(a)").

Page 27, line 20, leave out ("would not be") and insert ("is not").

Page 27, line 22, leave out ("in").

Page 27, line 25, leave out ("would not be") and insert ("is not").

The noble Lord said: My Lords, in moving these amendments en bloc it may be convenient to your Lordships if I speak also to Amendment No. 140. Clause 26 makes it an offence to supply items that are to be used for the administration of a controlled drug. During discussion of this clause in Committee, I mentioned that my right honourable friend the Home Secretary was considering the possibility of extending the scope of the new offence to cover items used to prepare drugs for administration as well as those used simply for administering the drugs. I was grateful for the support that a number of your Lordships expressed for the idea of extending the new offence in this way. I should now like to propose that we do indeed extend the scope of Clause 26 to cover items used in preparing controlled drugs for administration.

As I said in Committee, the cocaine kits which were the immediate cause of public concern usually contain only one item that is used for administering the drug. All the others are used for preparing it. If that one item were to be removed from the kit and sold separately, it would be possible to offer for sale a cocaine preparation kit that would be just as repugnant as the cocaine kits themselves. The burden will of course remain on the prosecution to prove that the supplier believed that the articles he was selling would be used in connection with drug misuse in order to safeguard the position of honest shopkeepers. The draft clause adopted in Committee provided a defence for a supplier who believed on reasonable grounds that the items he was supplying would be used for medical purposes.

We are concerned that putting the onus on the defendant to show that he held such a belief would cause difficulties for those who make or distribute equipment commonly used in the lawful preparation of a controlled drug. A manufacturer or wholesaler particularly would have no belief about the ultimate use of any individual item supplied by him. So the defence would be difficult to establish. We are therefore now proposing that the burden should be on the prosecution to establish that the article was supplied in the belief that the ensuing administration of the drug would be unlawful. Where the articles in question are cocaine kits and similar items, such belief should not be difficult for the prosecution to establish because such items are unlikely to be used for medical purposes. I beg to move.

Lord Mishcon

My Lords, these are sensible and useful amendments.

On Question, amendments agreed to.

Lord Glenarthur moved Amendment No. 125:

After Clause 26, insert the following new clause:

("Power to inspect Land Register etc.

.—(1) The Chief Land Registrar (in this section referred to as "the registrar") shall, on an application under subsection (2) or (4) below made in relation to a person specified in the application or to property so specified, provide the applicant with any information kept by the registrar under the Land Registration Act 1925 which relates to the person or property so specified.

(2) An application may be made by—

1. (a) any police officer not below the rank of superintendent.
2. (b) any Crown Prosecutor, or
3. (c) any person commissioned by the Commissioners of Customs and Excise not below the rank of senior executive officer,

and on an application under this subsection an appropriate certificate shall be given to the registrar.

(3) In subsection (2) above, "appropriate certificate" means a certificate—

1. (a) that there are reasonable grounds for suspecting that there is information kept by the registrar which is likely to be of substantial value (whether by itself or together with other information) to an investigation into drug trafficking, or
2. (b) that—
1. (i) a person specified in the certificate has committed or there are reasonable grounds for suspecting that a person so specified has committed a drug trafficking offence, and
2. (ii) there are reasonable grounds for suspecting that there is information kept by the registrar which is likely to be of substantial value (whether by itself or together with other information) to an investigation into whether the person so specified has benefited from drug trafficking or in facilitating the recovery of the value of his proceeds of drug trafficking.

(4) An application may be made by a receiver appointed under section 8 or 11 of this Act and on an application under this subsection there shall be given to the registrar—

1. (a) a document certified by the proper officer of the court to be a true copy of the order appointing the receiver, and
2. (b) a certificate that there are reasonable grounds for suspecting that there is information kept by the registrar which is likely to facilitate the exercise of the powers conferred on the receiver in respect of the person or property specified in the application.

(5) The reference in subsection (1) above to the provision of information is a reference to its provision in documentary form.").

The noble Lord said: My Lords, the Bill contains a number of provisions designed to help trace and recover the proceeds of drug trafficking. This proposed new clause adds to them. Information held by the Land Registry may well be helpful in identifying the assets of drug traffickers. The police and the Crown Prosecution Service may already obtain access to such information for the purposes of investigating crime and recovering stolen property. This clause extends those powers to officers of Customs and Excise where the investigation relates to drug trafficking and also to receivers appointed under the Bill where the information is likely to help them in the restraint or realisation of a trafficker's assets. The proposed new clause provides one more way in which the extent of the trafficker's property can be ascertained. It will therefore contribute to the effectiveness of the confiscation order. I beg to move.

8.15 p.m.

Lord Mishcon

My Lords, I shall not detain the House, but it is remarkable to me that whereas this confidential information by bankers and other financial institutions can be given to a constable, when one wants to make an application to the chief land registrar for a copy of entries it cannot be made by anyone below the rank of superintendent. I merely smile and sit down.

On Question, amendment agreed to.

Clause 30 [Interpretation]:

Lord Glenarthur moved Amendments Nos. 126 and 127:

Page 28, leave out lines 15 to 18.

Page 28, leave out lines 23 and 24.

The noble Lord said: My Lords, in moving these two amendments en bloc I should like to speak also to Amendments Nos. 130, 131, 132 and 134. These amendments relate to the interpretation clause of the Bill. In part, they are consequential on the amendments agreed earlier and introduce various new terms to the clause. We are also proposing the insertion of a list of expressions used in the Bill which we hope will provide clear signposting round this complex legislation.

On Question, amendments agreed to.

Lord Cameron of Lochbroom moved Amendments Nos. 128 and 129:

Page 29, line 41, after ("personal") insert (", heritable or movable").

Page 29, line 42, after ("intangible") insert ("or incorporeal").

The noble and learned Lord said: My Lords, these two amendments provide the necessary modifications to the definition of property in the Bill to take account of the terminology of Scots law. I beg to move.

On Question, amendments agreed to.

Lord Glenarthur moved Amendments Nos. 130 to 135:

Page 29, leave out lines 43 and 44.

Page 30, leave out lines 1 to 3.

Page 30,leave out lines 4 to 7 and insert—

("(1A) The expressions listed in the left hand column below are respectively defined or (as the case may be) fall to be construed in accordance with the provisions of this Act listed in the right hand column in relation to those expressions.

Expression	Relevant provisions
Benefited from drug trafficking	Section 1(3)
Charging order	Section 9(2)
Confiscation order	Section 1(8)
Dealing with property	Section 8(5)
Defendant	Section 1(8)
Gift caught by this Act	Section 5(10)
Making a gift	Section 5(11)
Proceeds of drug trafficking	Section 2(1)(a)
Realisable property	Section 5(1)
Restraint order	Section 8(1)
Value of gift, payment or reward	Section 5
Value of proceeds of drug trafficking	Section 2(1)(b)
Value of property	Section 5(7).").

Page 30, line 22, at end insert— ("(6A) References to property held by a person include a reference to property vested in his trustee in bankruptcy, permanent or interim trustee within the meaning of the Bankruptcy (Scotland) Act 1985 or liquidator. (6B) References to an interest held by a person beneficially in property include a reference to an interest which would be held by him beneficially if the property were not so vested.").

Page 30, line 26, leave out subsection (8).

Clause 31, page 31, line 36, at end insert— ("(1A) In section 49(1)(g) of the Land Registration Act 1925 (protection of certain interests by notice) after "Charging Orders Act 1979" there is inserted "or the Drug Trafficking Offences Act 1986.")

The noble Lord said: My Lords, these amend ments are consequential. I beg to move.

On Question, amendments agreed to.

Clause 31 [Minor amendments]:

Lord Cameron of Lochbroom moved Amendments Nos. 136 and 137:

Page 31, line 41, at end insert— ("(2A) After subsection (4) of section 18 of the Civil Jurisdiction and Judgements Act 1982 there is inserted the following subsection— (4A) This section does not apply as respects the enforcement in Scotland of orders made by the High Court in England and Wales under or for the purposes of the Drug Trafficking Offences Act 1986." ").

Page 32, line 4, at end insert— ("(4) Section 55(1) of the Bankruptcy (Scotland) Act 1985 (discharge of debtor not to release him from liabilities in respect of fines etc.) shall have effect as if the reference to a fine included a reference to a confiscation order").

The noble and learned Lord said: My Lords, these two amendments make minor adjustments to existing legislation applying to Scotland consequential upon the provisions of the Bill. I beg to move.

On Question, amendments agreed to.

Clause 32 [Short title, commencement and extent]:

Lord Cameron of Lochbroom moved Amendments Nos. 138 and 139:

Page 32, leave out line 14 and insert—

("(4) This Act has effect in Scotland as follows—

1. (a) sections 8 (but not subsection (5A) or (6)), 11, 12 and 23 (but not subsection (5D), (6) or (7)) extend also to Scotland, but only as provided by sections [Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23] and [Scotland: supplementary] of this Act;
2. (b)
• section 8(5A) and (6);
• section 13;
1127
• sections [Bankruptcy of defendant etc.] and [Sequestration in Scotland of defendant etc.];
• section [Receivers: supplementary provisions] (1);
• sections 20 to 22;
• section 23(5D), (6) and (7);
• section 26;
• section 30, so far as relating to other provisions of this Act extending to Scotland;
• section 31(2), (2A) and (4); and
• this section, so far as relating to other provisions of this Act extending to Scotland,
• extend also to Scotland.
3. (c) sections [Recognition and enforcement in Scotland of orders and functions under sections 8, 11, 12 and 23], [Scotland: supplementary], [Inhibition and arrestment in Scotland] and [Proof in Scotland of High Court order] extend to Scotland only.

(5)").

Page 32, line 15, leave out ("Scotland and").

The noble and learned Lord said: My Lords, these two amendments apply to the extent clause of the Bill specifying the provisions of the Bill that apply to Scotland.

I should like to point out that in one respect these amendments are now incomplete. The House has agreed today to insert a new subsection (2A) into Clause 17, sub-paragraph (ii) of which protects from actions for breach of confidence persons who disclose their suspicions that funds or investments are derived from drug trafficking. I would wish that the paragraph—I think it is paragraph (a)—be extended to Scotland. With the permission of the House, the necessary additional amendment will be tabled for Third Reading. I move the two Amendments Nos. 138 and 139 en bloc.

Lord Harris of Greenwich

My Lords, since we are coming to the end of our proceedings, may I ask an wholly unreasonable question, for which I shall not ask for an answer tonight? As these provisions are being extended to Scotland, I cannot recall whether we have discussed the situation in relation to Northern Ireland banks. I do not press the point tonight but no doubt the matter is being looked at and no doubt it has already been dealt with.

Lord Glenarthur

My Lords, so far as Northern Ireland is concerned, Section 26 extends the relevant provisions of the Act to Northern Ireland. I had better let the noble Lord have details. But I believe that it does.

On Question, amendment agreed to.

In the Title

Lord Glenarthur moved Amendment No. 140:

Line 5, after ("drugs") insert ("or used to prepare a controlled drug for adminstration").

The noble Lord said: My Lords, last but not least and definitely consequential, I beg to move.

On Question, amendment agreed to.