Criminal Justice (International Co-operation) Bill [H.L.]

HL Deb 22 January 1990 vol 514 cc878-902

3.9 p.m.

The Minister of State, Home Office (Earl Ferrers)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee. —(Earl Ferrers.)

On Question, Motion agreed to.

House in Committee accordingly.

[The BARONESS SEROTA in the Chair.]

Clauses 1 to 3 agreed to.

Clause 4 [United Kingdom evidence for use overseas]:

Lord Mishcon moved Amendment. No. 1: Page 4, line 21, leave out ("and").

The noble Lord said: There is a part of this Bill —namely Part II —which deals with international co-operation in regard to the investigation and prosecution of offences relating to drugs and terrorism. I should like the Minister to know immediately that he, in moving amendments to Part II, will find full co-operation from these Benches not only with the original measure but with the amendments that he intends to move. I do not know whether that will enable the Minister to shorten his address to the Committee. As I have said, there is complete co-operation and agreement on this side of the Chamber.

However, Part I of the Bill deals with criminal offences generally. The exchange of information and co-operation which should lead to the apprehension of criminals wherever they commit offences is the subject matter of that part of the Bill. My amendment deals with a situation which the noble Earl may be able to clarify.

It will be known to the Committee that in many countries fiscal offences are criminal matters. They are very largely dealt with in this country as civil matters and only the more serious ones become criminal cases. Fiscal matters regarded as criminal offences may come under the aegis of this Bill. If that is so, the Committee and the Minister may feel that it would be quite wrong, for example, to impose on our banks, which rely for their custom on people believing in their confidentiality, a duty to hand over to a foreign authority a copy of a statement of a bank account if it is alleged by that authority that the offence is a criminal one relating to fiscal matters in that foreign country but not in ours.

If this Bill becomes an Act it should enable the Government to ratify the European Convention on Mutual Assistance in Criminal Matters 1959. It would also appear to authorise the Government to ratify the additional protocol. It is that protocol which has the effect of extending the scope of the convention to fiscal offences.

There has been a previous pronouncement by the Government regarding these matters. That appears to be irreconcilable with the idea of affording assistance under a convention regardless of whether or not the fiscal matter being investigated is a criminal matter in this country. On 20th December 1988 a press release was issued by the Inland Revenue which quoted the reply of the Financial Secretary to a Written Question tabled in the other place on 20th December. In that reply the Minister said: The Government recognises the value which is rightly attached to international co-operation among fiscal authorities and the need to make adequate and effective arrangements to this end which are fair to taxpayers and the Revenue authorities concerned. Such co-operation plays an important part in ensuring the proper determination of tax liabilities on an international level. However, in view of the existing provisions for mutual assistance in this area provided, for example, by our extensive network of double taxation treaties and our European obligations, we have concluded that the UK need not become a party to the Convention".

That refers to the OECD and Council of Europe Convention for Mutual Administrative Assistance in Tax Matters. Therefore I ask the Minister, through this amendment, whether it is correct that fiscal matters are covered by Part I. If they are, does the Minister agree that, regarding fiscal matters, we should extend this co-operation and cause banks to disclose information which is otherwise confidential only where the offence alleged is an offence according to our own criminal law? I beg to move.

3.15 p.m.

The Earl of Selkirk

I support what the noble Lord, Lord Mishcon, has said. I shall not try to repeat his arguments which have been so admirably and clearly stated. I know it is the strong view of the banks of this country that an amendment of this kind is necessary. Frankly, a moment's thought on what is involved would support that view.

Lord Monson

I had not seen this amendment until about three minutes ago. The noble Lord, Lord Mishcon, has made out an excellent case for it. We have to recognise that the United States of America in particular is claiming more and more jurisdiction over what goes on outside its own frontiers. That is a development which worries a great many people. I do not believe that we should do anything to facilitate it.

Lord Harris of Greenwich

I do not wish to express a view on the amendment moved by the noble Lord, Lord Mishcon, until I have heard what the noble Earl, Lord Ferrers, has to say. We wish this Bill to be as rigorous as possible because of the scale of money-laundering that is now taking place. I am grateful to the Minister for the letter which I received earlier this afternoon dealing with a point of some importance. As far as I am concerned, he has dealt with the matter satisfactorily.

I wish to raise a particular point on this amendment which could also be raised on other amendments. It concerns a different issue. What happens if a bank or another financial institution also operating in the United Kingdom is convicted partly as a result of the provisions of this clause? In my view there is little doubt that the American authorities would have found the provisions of this clause particularly helpful in a prosecution which took place last week in Tampa, Florida. The Bank of Credit and Commerce International was convicted. It pleaded guilty to three charges of conspiracy and money-laundering. An associate bank —

Lord Mishcon

I hope the noble Lord will forgive me for interrupting him and not think me discourteous. Everything that he has said so far has nothing to do with this amendment, but it might be extremely relevant to a debate on clause stand part.

Lord Harris of Greenwich

I am perfectly prepared to deal with the matter in that way, but the speech I am about to make will be brief and there would be no purpose in repeating it later. Therefore perhaps I may continue. An associate bank, the Bank of Credit and Commerce International (Overseas), pleaded guilty to another 29 charges. Those two banks agreed to pay a fine of 14 million dollars, which is the largest fine that has ever been imposed in such cases by a court in the United States.

The BCCI operates worldwide and it has no fewer than 40 branches in the United Kingdom. What action will the Bank of England, as the regulatory authority, take against the BCCI in this country as a result of what happened in Tampa, Florida last week? As the noble Earl and his officials will be aware, it has power to take action under the provisions of the Banking Act 1987. As the noble Earl will realise from the debate we had at Second Reading, there is serious concern about the quantity of drugs' money still being laundered in this country.

The noble Lord, Lord Mishcon, reminded us at Second Reading, that the National Drugs Intelligence Co-ordinator said that about £1,800 million derived from drug trafficking was still washing around in the United Kingdom. He also said that, despite the passage of the Drug Trafficking Offences Act 1986, the United Kingdom continues to be a major centre for money-laundering.

In those circumstances I am sure that the noble Earl will appreciate that when a bank, which operates on a substantial scale in the United Kingdom, is convicted of such serious offences in the United States, many of us will assume that prompt action will be taken by the Bank of England to deal with the situation. I realise that this matter is outside the competence of the Home Office, but I shall be very grateful if, in the light of what happened last week, the Minister were to write to me about the problem and to put a copy of that letter in the Library of this House.

Earl Ferrers

I am grateful to the noble Lord, Lord Harris, for his final remarks. The question he posed is, as the noble Lord, Lord Mishcon, said, slightly outside the terms of the amendment. The noble Lord said that it was outside the competence of the Home Office. The Home Office is a fairly competent organisation and I have no doubt that we shall be able to find the answer to his specific question. I shall find the answer and write to him. I am also grateful to the noble Lord for saying that he would reserve judgment on the amendment until he had heard what I have to say. I have the fullest confidence that, having heard what I have to say, he will agree with it.

The noble Lord, Lord Mishcon, was kind enough to say that we would have full co-operation from his side of the Committee on Part II of the Bill. I am grateful to him for that because it is an important part of the Bill. I appreciate the concerns expressed by the noble Lord and by my noble friend Lord Selkirk and the noble Lord, Lord Monson. I appreciate too the concerns on the part of the banks. However, I hope that I shall be able to reassure the Committee that the Bill is drafted in such a way as to meet those concerns. I hope it will be agreed that the amendments are not necessary.

As the Committee will recall, one of the main advantages we hope to obtain from the Bill is that it will enable us to participate with other countries in Europe in the full range of mutual legal assistance arrangements provided for in the European Convention on Mutual Assistance in Criminal Matters. Part I of the Bill is intended to make it possible for us to co-operate with other countries in relation to any kind of criminal offence, subject to the Secretary of State's general discretion to refuse to act upon any particular request from overseas where it appears to him right to do so. The Bill does not specifically refer to fiscal offences, a matter about which the noble Lord, Lord Mishcon, asked, but it is the Government's intention to accede to Chapter 1 of the additional protocol to the European convention, the effect of which will be to require us to provide assistance to other European convention countries in relation to fiscal offences just as with any other criminal offences.

The European convention itself set out, in Article 2, the main grounds upon which a request for assistance can be refused. Under the terms of the convention, it is only possible for parties to the convention to require that the activity giving rise to a request for assistance should amount to an offence in both the country which makes the request and in the country which receives it if the request will involve the exercise of powers of search and seizure. This matter is dealt with in Clause 7 of the Bill, not in Clause 4 to which the present amendments refer.

In effect, this means that acceptance of the amendments would, since they impose a dual criminality requirement as a prerequisite to the grant of assistance under Clause 4, make it impossible for us to accede to the fiscal provisions of the additional protocol. However, the United Kingdom stands to gain by accession to the protocol because it will open up to us new sources of evidence for use in our own criminal proceedings against tax offenders. It is important, as the free market in capital draws nearer, that the United Kingdom should co-operate in ensuring that that free market does not make tax evasion easier. The ability to seek evidence overseas or to provide evidence to our partners in the Council of Europe is a useful addition to our defences. There is no reason in principle why assistance should be denied in the case of a fiscal offence when it is offered for every other kind of criminal offence. The Bill involves no breach of taxpayer confidentiality.

For these reasons, I hope that the noble Lord will not find it necessary to press his amendment. I hope too that I can give him some reassurance that the Bill's provisions do all that is necessary to meet the genuine concerns which lie behind the amendment. Acceding to the protocol will, after all, only oblige us to provide assistance in fiscal cases to other European convention countries. I do not think that it is with such countries that the noble Lord is primarily concerned.

Our dealings with countries which are not parties to the European convention or any similar treaty will be subject to the general provisions of the Bill alone, and, as I have already indicated, Clause 4 confers upon the Secretary of State a broad general discretion whether to comply with any particular request for assistance received from overseas. It would therefore be open to him to refuse to comply with any request if he judged it right to do so. We would not wish to be committed to a general policy of refusing any request which we might receive from a non-convention country in relation to a fiscal offence where there is no dual criminality but any such requests which we might receive will be examined carefully. If it is felt that there is, for example, any reason to doubt the integrity of the overseas judicial authority which made the request, or any other reason of public policy why the request should not be complied with, it will be open to the Secretary of State to take no action upon it.

I believe that the discretion which Clause 4 confers upon the Secretary of State will be sufficient to meet the concerns indicated by the noble Lord, and I hope that, on the basis of my explanation of the circumstances in which this discretion might be exercised, he will not wish to press the amendment.

Lord Mishcon

I wish I could feel content with the noble Earl's courteous reply but I found it singularly unsatisfactory. I wish to tell the Committee why. On every conceivable occasion where there has been a question of hitting at serious international crimes the Government have had support from this Dispatch Box. They have had support when they have sought extraordinary powers in regard to banks and in regard also to matters affecting personal liberty. We have talked in terms of the confidentiality of banker and customer and have said that that has to be invaded in view of the universal threats of terrorism and drug offences. From this Dispatch Box too I have ventured humbly to say that we must be careful to see that the floodgates argument does not apply —that once having allowed certain things to happen in our criminal law, we stop short of things which otherwise will come rushing through by way of alteration to old traditional and valuable concepts.

The relationship of banker and customer in this country is a sacred one. Because it is a sacred one, foreign depositors who are not as fortunate in their own countries —I am referring to countries in Europe which are members of the European convention —prefer to do business with our banks. The strength of their confidentiality is often the strength that enables them to obtain custom where banks in other countries are not able to do so from those self-same customers.

What did the Minister say when I talked about fiscal matters which are not criminal offences in this country but about which, possibly because of our passing this clause unamended, banks will be made to give information which they otherwise would have protected? The noble Earl referred to Clause 7 and fairly said that where there is dual criminality the matter relates to powers of entry, search and seizure. It has nothing to do with affording information and disclosing copies of bank statements.

The noble Earl referred to Clause 4 to which I seek to add this subsection. The clause gives a general discretion to the Minister. If he will only say, as I now invite him to do, that it will be the intention in the exercise of that discretion not to give such assistance where the fiscal offence was not a criminal offence in this country, I shall not press the amendment. However, the least I expect is an assurance that the discretion will be exercised in that way; otherwise we shall not be protecting bankers. It is strange for those on this side of the Committee to be trying hard to defend the interests of bankers. However, those of us on this side are equally interested in the confidentiality that exists by tradition as between bankers and customers. We are also interested in the prosperity of the City of London.

It is in those circumstances that I invite the noble Earl to give that undertaking; namely, that where the fiscal matter complained of by the other country is not a criminal offence in this country, we shall not force our banks to afford information which would otherwise be covered by confidentiality. We are not dealing with drugs and trafficking offences. As I said, those of us on this side of the Committee have invited the Government to go ahead with as forceful measures as they can in that direction because we are at one with them in their endeavour to defeat these evils.

3.30 p.m.

The Earl of Selkirk

I should like to ask my noble friend whether he will consult again with the British Bankers' Association. The points made by the noble Lord, Lord Mishcon, particularly as regards the significance of the banking system on the economic side of our life in this country, cannot be ignored. The bankers have not made these comments because they wish to evade anything; they say that this protection is a matter of great importance.

Can my noble friend at least undertake to consult with those who strongly hold that view? It is perhaps difficult for those who are not in the banking business to appreciate how significant are certain steps. Perhaps he can give an undertaking that this matter will again be considered so as to determine how the matter stands.

Lord Harris of Greenwich

I certainly have no objection to the Government consulting the bankers. However, I hope that at the same time they will also consult other people. We are concerned about the public interest in this matter; not the interests of just the banking community. We are faced with a major criminal problem; that is, the quantity of illicit money raised by people involved in the drugs industry on both sides of the Atlantic. If this power will strengthen our position in terms of dealing with the matter, then I think we should give it to the Government.

However, when the noble Earl replies I hope that he will deal with one particular point. From his remarks, I was not clear about this matter, although that is probably the result of a misunderstanding on my part. I understood him to say that if the Bill were amended in this fashion we would not be able to ratify the convention. Am I correct in that assumption?

Earl Ferrers

Yes.

Lord Harris of Greenwich

I thought that that was so.

Earl Ferrers

I am grateful to the noble Lord, Lord Harris, for drawing our attention to that point. There are many issues here and I do not think that the noble Lord, Lord Mishcon, should feel any sense of shame in supporting the bankers, if indeed it is shame that he feels. There is a real issue here and I can quite see why people are concerned about the matter.

One of the matters which is of particular importance is the fact that in the Bill dual criminality refers to "search and seizure" only. That is the only occasion when dual criminality comes into effect. If we want that provision to apply to other matters, as suggested by the noble Lord, then the noble Lord, Lord Harris, is right: we would not be able to sign the protocol. Of course it is most important that we do so because there are many benefits to be gained from so doing.

The protocol will oblige us to provide assistance in fiscal cases to other European countries. Therefore there are great advantages in signing the document. I think it would be a great pity if we were to accept the amendment and insert into the Bill a provision which would actually prevent us from so doing.

The noble Lord was also concerned, as indeed was my noble friend Lord Selkirk, about the position of British bankers. Consultations are continuing with the British Bankers' Association. I am quite happy that these should continue. If the association feels very concerned about the matter, I am quite content that it should inform us of such concern.

The noble Lord, Lord Mishcon, asked whether I would give an assurance, in relation to any fiscal matter complained of, that the Secretary of State would not give such consent unless a similar matter was a criminal offence in this country. I have paraphrased the noble Lord's question, but I think that that was what he said. I have a great deal of sympathy with that view. However, I am sure he will understand that I cannot give him a blanket assurance which would bind any future Secretary of State. I cannot do so because it would then be necessary to put such provision into the Bill. However, I can give the noble Lord the assurance that any future Secretary of State confronted with this kind of situation would give it serious attention. I cannot, however, give him the blanket assurance he seeks. Indeed I do not think that he would really expect me to do so.

Lord Mishcon

I am grateful to the Minister for his reply. In view of the assurance given, even though it was given in somewhat guarded language which I appreciate he had to use, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Clause 4 agreed to.

Clauses 5 to 10 agreed to.

3.30 p.m.

Clause 11 [Substances useful for manufacturing controlled drugs]:

Earl Ferrers moved Amendment No. 3: Page 10, line 28, leave out from ("Convention") to ("under") in line 29.

The noble Earl said: This is simply a drafting amendment which shortens the form in which the Vienna Convention is cited in Clause 11. Because there are several references to the convention in the new clauses which we have tabled for insertion after Clause 12, we have decided to provide a definition of the convention. This is contained in the new clause proposed by Amendment No. 14. I beg to move.

On Question, amendment agreed to.

Clause 11, as amended, agreed to.

Clause 12 agreed to.

Earl Ferrers moved Amendment No. 4: After Clause 12, insert the following new clause:

("Concealing or transferring proceeds of drug trafficking

—(1) A person is guilty of an offence if he—

1. (a) conceals or disguises any property which is, or in whole or in part directly or indirectly represents, his proceeds of drug trafficking; or
2. (b) converts or transfers that property or removes it from the jurisdiction, for the purposes of avoiding prosecution for a drug trafficking offence or the making or enforcement in his case of a confiscation order.

(2) A person is guilty of an offence if, knowing or having reasonable grounds to suspect that any property is, or in whole or in part directly or indirectly represents, another person's proceeds of drug trafficking, he —

1. (a) conceals or disguises that property; or
2. (b) converts or transfers that property or removes it from the jurisdiction, for the purpose of assisting any person to avoid prosecution for a drug trafficking offence or the making or enforcement of a confiscation order.

(3) A person is guilty of an offence if, knowing or having reasonable grounds to suspect that any property is, or in whole or in part directly or indirectly represents, another person's proceeds of drug trafficking, he aquires that property for no, or for inadequate, consideration.

(4) In subsections (1)(a) and (2)(a) above the references to concealing or disguising any property include references to concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it.

(5) For the purposes of subsection (3) above consideration given for any property is inadequate if its value is significantly less than the value of that property, and there shall not be treated as consideration the provision for any person of services or goods which are of assistance to him in drug trafficking.

(6) a person guilty of an offence under this section is liable —

1. (a) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum or both;
2. (b) on conviction on indictment, to imprisonment for a term not exceeding fourteen years or a fine or both.").

The noble Earl said: The noble Lord, Lord Mishcon, was kind enough to say that there would be agreement from his side of the Committee to the amendments which we seek to introduce into this part of the Bill. He even suggested that I might truncate my remarks accordingly. Indeed I was tempted to rise and simply say, "I beg to move". However, I think that that may be regarded as a discourtesy. It is only correct that I should give some explanation regarding what are substantial amendments to the Bill.

This is the first of several new clauses which have been introduced into the Bill in order to enable us to implement the Vienna Convention. The proposed new clause seeks to fill the gap between our existing money laundering offence under Section 24 of the Drug Trafficking Offences Act 1986 and the rather wider offence set out in Article 3 of the convention.

The position is as follows. Section 24 of the Drug Trafficking Offences Act 1986 created an offence of being concerned in an arrangement whereby a drug trafficker is assisted by someone else to retain the benefit of drug trafficking. The key to the offence is that the defendant —the one who is assisting—knew or suspected that the person whose property he was dealing with was a drug trafficker. Section 24 also requires that the arrangement must be for the benefit of the drug trafficker whose proceeds are the subject of the arrangement.

The convention offences, on the other hand, rest on the nature or source of the property itself and not on whether the person himself is a drug trafficker. They cover the situation where anybody, including a drug trafficker himself, deals with proceeds in such a way as to avoid prosecution or the making, or enforcement, of a confiscation order against any person.

Accordingly, subsections (1) and (2) of the new clause give effect to Article 3 of paragraph i(B) and (ii) of the convention. They create new offences of concealment, disguise, conversion or transfer of proceeds for the purpose of avoiding prosecution or confiscation. Similarly subsections (3) and (5) give effect to Article 3(c)(1) of the convention. They create an offence of acquiring property knowing or having reasonable grounds to suspect that it is the proceeds of drug trafficking.

The effect of subsection (5) is that a person, who provides goods or services unconnected with drug trafficking activities, will not commit an offence by receiving payment for those goods or services even if he knew or had reasonable grounds to suspect that the payment came from the proceeds of drug trafficking. We have in mind here, in particular, tradespeople who supply such goods and services, but, of course, if the goods or services assisted the drug trafficker in his drug trafficking activities, then an offence would be committed.

There are just two other points I feel I should draw to the Committee's attention about this new clause. First, the penalties in subsection (6) for these new offences are the same as for the existing money laundering offences in the 1986 Act. Secondly, by virtue of Amendment No. 19, those offences are made drug trafficking offences under the 1986 Act and consequently the power to make a confiscation order under the Act will apply to them. I beg to move.

Lord Hailsham of Saint Marylebone

This is highly technical stuff, and I am not in a position to criticise or endorse everything before us. Virtually 10 pages of amendments of a highly technical character have been introduced by the Government in Committee. And one clause —Clause 15—that was in the original draft has been omitted. I wonder how it was that the Bill came to be presented on Second Reading for enthusiastic endorsement in principle when so much required to be done before it reached Committee.

Earl Ferrers

I am not surprised that my noble and learned friend asks such a question. He might not have asked it had he been here on Second Reading, but I do not blame him for that. He had many other things to do. It is clearly a matter of concern when the Government introduce a Bill and then bring forward a number of amendments.

I explained on Second Reading that we were endeavouring to put into statute the requirements of the Vienna Convention which was signed only 12 months ago. The Bill provided a wonderful legislative opportunity for immediate implementation of that convention. As my noble and learned friend rightly said, the Bill contains technical matters. It was not possible to have all those technical matters resolved by the time the Bill was introduced. I explained the dilemma that the Government then faced: either we introduced the Bill without the terms of the Vienna Convention or we asked the indulgence of this place to introduce a Bill which was inadequate and incomplete so that the requirements of the Vienna Convention could be immediately introduced. We can take some pride in that, even though it might irk my noble and learned friend. It is only one year since the convention was signed. That is pretty recent to enact enabling legislation. I do not say this with any great pride, but it took 17 years to ratify the 1971 convention. If we have managed to ratify this convention within 12 months with the help and understanding of this place, I believe that that will be of benefit.

Lord Callaghan of Cardiff

There is a tactic well known to the Home Office and every other department equated with the Home Office. It is one, I am sure, the noble and learned Lord, Lord Hailsham, has practised in the past. If there is a legislative gap, a slot to be filled, and no immediate government Bill, the Home Office can always be relied upon to come forward and provide one. It has a cupboard full of Bills ready to be brought forward at a moment's notice. I dare say that that is what happened on this occasion.

Earl Ferrers

I am not certain whether that is a helpful intervention. On the assumption that it is, I shall take it as being so. On reflection, the noble Lord might think that it was not as helpful as he intended it to be.

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 5. After Clause 12, insert the following new clause:

("Interest on sums unpaid under confiscation orders

.—(1) If any sum required to be paid by a person under a confiscation order is not paid when it is required to be paid (whether forthwith on the making of the order or at a time specified under section 31(1) of the Powers of Criminal Courts Act 1973) that person shall be liable to pay interest on that sum for the period for which it remains unpaid and the amount of the interest shall for the purposes of enforcement be treated as part of the amount to be recovered from him under the confiscation order.

(2) The Crown Court may, on the application of the prosecutor, increase the term of imprisonment or detention fixed in respect of the confiscation order under subsection (2) of section 31 of the said Act of 1973 (imprisonment in default of payment) if the effect of subsection (1) above is to increase the maximum period applicable in relation to the order under subsection (3A) of that section.

(3) The rate of interest under subsection (1) above shall be that for the time being applying to a civil judgment debt under section 17 of the Judgements Act 1838.").

The noble Earl said: Perhaps I may speak also to Amendment No. 6. The two new clauses have been introduced to enable us fully to meet the requiremnents of Articles 5.1 and 6(c) of the Vienna Convention. Under those articles, we are required to ensure that the maximum possible amount of proceeds of drug trafficking, and any income derived from them is confiscated. We need to make two adjustments to the scheme established under the 1986 Act: one to deal with interest accrued on sums unpaid under confiscation orders; the other to take account of the increase in realisable property which comes to light after a confiscation order is made. Both issues have been raised by our enforcement agencies as priority concerns and the Home Affairs Committee's recent report on Drug Trafficking and Related Serious Crime recommended that the 1986 Act should be amended at the earliest opportunity.

To that end the first new clause makes provision for the addition of interest, at the same rate as that applicable to a civil judgment debt, to the amount remaining unpaid under a confiscation order at the time when it should be paid, either forthwith or on the expiry of any period given by the Crown Court as time to pay. The interest so added is then treated as part of the amount to be recovered under the confiscation order and, under subsection (2), any period of imprisonment in default may be increased accordingly.

The second new clause provides that the amount to be recovered under a confiscation order can be increased, within the limit of the assessed value of the proceeds, where it turns out that the amount that might be realised is greater than was initially assessed by the Crown Court.

Under each clause the Crown Court is empowered to make a consequential increase, where appropriate, in the period of imprisonment to be served in default of payment. I beg to move.

On Question, amendment agreed to.

3.45 p.m.

Earl Ferrers moved Amendment No. 6: After Clause 12, insert the following new clause:

("Increase in realisable property

.—(1) This section has effect where by virtue of section 4(3) of the Drug Trafficking Offences Act 1986 (insufficient realisable property) the amount which a person is ordered to pay by a confiscation order is less than the amount assessed to be the value of his proceeds of drug trafficking.

(2) If, on an application made in accordance with subsection (3) below, the High Court is satisfied that the amount that might be realised in the case of the person in question is greater than the amount taken into account in making the confiscation order (whether it was greater than was thought when the order was made or has subsequently increased) the court shall issue a certificate to that effect, giving the court's reasons.

(3) An application under subsection (2) above may be made either by the prosecutor or by a receiver appointed under the said Act of 1986 in relation to the realisable property of the person in question.

(4) Where a certificate has been issued under subsection (2) above the prosecutor may apply to the Crown Court for an increase in the amount to be recovered under the confiscation order; and on that application the court may—

1. (a) substitute for that amount such amount (not exceeding the amount assessed as the value referred to in subsection (1) above) as appears to the court to be appropriate having regard to the amount now shown to be realisable; and
2. (b) increase the term of imprisonment or detention fixed in respect of the confiscation order under subsection (2) of section 31 of the Powers of Criminal Courts Act 890 1973 (imprisonment in default of payment) if the effect of the substitution is to increase the maximum period applicable in relation to the order under subsection (3A) of that section.").

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 7: After Clause 12, insert the following new clause:

("Offences on British ships

. Anything which would constitute a drug trafficking offence if done on land in any part of the United Kingdom shall constitute that offence if done on a British ship.").

The noble Earl said: It may be for the convenience of the Committee if we were to take Amendment No. 7 together with Amendments Nos. 8, 9, 10 and 18.

Taken together these maritime provisions are designed to give effect to the requirements in the Vienna Convention which require parties "to co-operate" to the fullest extent possible to suppress illicit drugs traffic by sea. To that end each party is thus required to establish jurisdiction over offences of illicit trafficking on its own registered vessels.

Article 17(2) of the convention identifies the form which such international co-operation is expected to take. With the Committee's permission I will read the following passage from that article: A Party which has reasonable grounds to suspect that a vessel flying its flag or not displaying a flag or marks of registry is engaged in illicit traffic may request the assistance of other Parties in suppressing its use for that purpose. The Parties so requested shall render such assistance within the means available to them".

Article 17(3) enables a party which suspects that a ship registered in another convention state is engaged in illicit traffic to request authorisation from the flag state to board and search the ship. That implies a regime in which the United Kingdom may be requested or authorised to board vessels flying the flag of another convention state and in which we may ask or authorise others to board our ships. There is, however, no point in boarding and searching a ship unless some form of criminal sanction is attached to the carriage of the illicit drugs which may be found as a result. Thus we need to ensure not only that the carriage of illicit drugs on a British ship is an offence but that the carriage of such drugs on the ship of any convention country is an offence also, triable in our courts. Thus we are proposing to extend the extra-territorial jurisdiction of the British courts in respect of the ships of other countries as well as our own whether on the high seas or in the territorial waters of another country. Any ship not registered in any country may, under the terms of the convention, be treated in the same way as a United Kingdom ship so far as jurisdiction is concerned.

One of two things may happen if illicit drugs are found as a result of searches authorised under these provisions. The ship concerned is likely to be escorted into port, following which either the flag country will seek the extradition home of those suspected of complicity in the offences, or the country in question will institute proceedings locally.

These amendments seek to give full effect to the convention's maritime requirements. Amendment No. 7 extends to British ships all drug trafficking offences (that is, all existing prior to this Bill) as well as those which we are now creating. Amendment No. 8 creates a new offence in respect of the transportation of controlled drugs for the purposes of illicit import or export. This offence will apply to the ships of convention countries and to unregistered ships, as well as to those registered here. Subsection (2) provides that the offence is committed where a person knows, or has reasonable grounds to suspect, that the drugs are intended to be imported, or have been exported, contrary either to Section 3(1) of the Misuse of Drugs Act 1971 or to the law of any other state. Subsection (3) provides for other governments to certify that import or export of controlled drugs is prohibited under their law. The test in respect of this offence is therefore not whether the accused actually suspected the illicit purpose behind the carriage of the drugs but whether a reasonable man would have done so in those circumstances, subject, under subsection (5), to the accused proving that in fact he did not do so.

Amendment No. 9 and the new schedule introduced by Amendment No. 18 create the arrangements whereby the United Kingdom may authorise other countries to board our ships, and we may be authorised to board other ships. No authorisation is required before the United Kingdom may board an unregistered ship. But in the case of the ships registered in convention states boarding may only take place at the request, or on the authorisation, of that country. Actions such as these may also be subject to conditions laid down by the other convention state. Subsection (4) empowers the Secretary of State to seek or authorise the boarding of United Kingdom vessels by other convention states. But in giving his authority the Secretary of State will be able to attach conditionsֵ For example, he might wish to limit local prosecution for any offences discovered, or to ensure that capital punishment is not imposed.

The remaining maritime amendments are largely technical in their effect, or consequential on the principal changes. I hope that these provisions will provide enforcement officers with much needed powers enabling them to deal with ships which moor close to our coasts, but which are nevertheless still in international waters and which tranship supplies of drugs to smaller craft which carry them to the mainland. If these important provisions are enacted they will strengthen yet further our ability to co-operate with other countries in this area. We must do all we can to remove any safe haven from those who organise such a trade. I beg to move.

Lord Harmar-Nicholls

As a matter of general interest which may not fit specifically with these amendments, I am interested that we are speedily giving effect to convention decisions made only a year ago. Are other countries doing so? The concluding words of the noble Earl in explaining what these amendments meant were that the changes enabled us to co-operate with other countries to achieve what the convention had in mind. Do other countries need to enshrine that in their legislation as we are doing today? Have they done it?

Earl Ferrers

Yes, clearly the changes have to be ratified. I think I am right in saying that three other countries have done so already: China, Nigeria and one other country whose name I forget. We can consider that we are the first to give such detailed recognition and to alter our law accordingly.

Lord Callaghan of Cardiff

The Minister is quite right to doubt whether I intended to be very helpful on the last occasion I spoke. My purpose here is purely to seek information. This seems a very desirable provision. The noble Earl said that it would apply to our territorial waters and to the high seas, on request from another state or another flag registered in that state.

I take another example, such as one of our smaller independent territories. If we were asked to move in the case of such a territory without a substantial navy, and supposing we had a frigate within the territorial waters of that state—as we might well do—would we then respond if the suspected drug runner were in the territorial waters of the home state? I see no reason why we should not, but it would be interesting to know whether the provision would apply in that situation.

Earl Ferrers

If the vessel concerned were within the territorial waters of the country we could take such action as we liked because it is within our territorial waters.

Lord Callaghan of Cardiff

I must apologise to the noble Earl—

Earl Ferrers

Perhaps I may follow the argument through. If I have not answered the noble Lord's point then he can make that clear when I have finished. If the vessel of another country were within our territorial waters then we could take action against that vessel because it was within our territorial waters. It would be the same way as taking action against an individual in our country who infringes the rules of our country.

However, if the vessel of the other state were to be moored not within 12 miles of our frontier, of our coastline—that is, our territorial waters—but if it were one mile outside those waters, then we could take action against that vessel provided we received the request from the country or we had its approval to do so and also provided that the country was a party to the convention.

I said that I had forgotten the third country which had taken action on the convention. It is the Bahamas.

Lord Callaghan of Cardiff

I fully understand the point that we can operate on request within our own territorial waters or on the high seas. I am sorry if I did not make my question plain. Can we operate in the territorial waters of another country which requests us to do so? I am thinking especially of some of the smaller countries in the West Indies which are independent members of the Commonwealth and which have their own territorial waters but which do not have the necessary facilities to prevent some of the drug smuggling going on at present. Supposing such a request came to us because we had a faster or bigger ship, would we be able to operate under this convention in another country's territorial waters? That is the point I am trying to make.

Earl Ferrers

I apologise to the noble Lord. I realise that on this occasion he is asking a helpful question. The answer is yes, we can do so, provided we have the authority of the other country. I am sorry that I did not understand the point to which the noble Lord referred.

On Question, amendment agreed to.

Earl Ferrers moved Amendments Nos. 8 to 10: After Clause 12, insert the following new clause:

("Ships used for illicit traffic

.—(1) This section applies to a British ship, a ship registered in a state other than the United Kingdom which is a party to the Vienna Convention (a "Convention state") and a ship not registered in any country or territory.

(2) A person is guilty of an offence if on a ship to which this section applies, wherever it may be, he—

1. (a) has a controlled drug in his possession; or
2. (b) is in any way knowingly concerned in the carrying or concealing of a controlled drug on the ship,

knowing or having reasonable grounds to suspect that the drug is intended to be imported or has been exported contrary to section 3(1) of the Misuse of Drugs Act 1971 or the law of any state other than the United Kingdom.

(3) A certificate purporting to be issued by or on behalf of the government of any state to the effect that the importation or export of a controlled drug is prohibited by the law of that state shall be evidence, and in Scotland sufficient evidence, of the matters stated.

(4) A person guilty of an offence under this section is liable—

1. (a) in a case where the controlled drug is a Class A drug—
1. (i) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum or both;
2. (ii) on conviction on indictment, to imprisonment for life or a fine or both;
2. (b) in a case where the controlled drug is a Class B drug—
1. (i) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum or both;
2. (ii) on conviction on indictment, to imprisonment for a term not exceeding fourteen years or a fine or both;
3. (c) in a case where the controlled drug is a Class C drug—
1. (i) on summary conviction, to imprisonment for a term not exceeding three months or a fine not exceeding the statutory maximum or both;
2. (ii) on conviction on indictment, to imprisonment for a term not exceeding five years or a fine or both.

(5) In this section "a controlled drug" and the references to controlled drugs of a specified Class have the same meaning as in the said Act of 1971; and an offence under this section shall be included in the offences to which section 28 of that Act (defences) applies.").

After Clause 12, insert the following new clause:

("Enforcement powers

.—(1) The powers conferred on an enforcement officer by Schedule (Enforcement powers in respect of ships) to this Act shall be exercisable in relation to any ship to which section (Offences on British ships) or (Ships used for illicit traffic) above applies for the purpose of detecting and the taking of appropriate action in respect of the offences mentioned in those sections.

(2) Those powers shall not be exercised outside the landward limits of the territorial sea of the United Kingdom in relation to a ship registered in a Convention state except with the authority of the Secretary of State; and he shall not give his authority unless that state has in relation to that ship —

1. (a) requested the assistance of the United Kingdom for the purpose mentioned in subsection (1) above; or
2. (b) authorised the United Kingdom to act for that purpose.

(3) In giving his authority pursuant to a request or authorisation from a Convention state the Secretary of State shall impose such conditions or limitations on the exercise of the powers as may be necessary to give effect to any conditions or limitations imposed by that state.

(4) The Secretary of State may, either of his own motion or in response to a request from a Convention slate, authorise a Convention state to exercise, in relation to a British ship, powers corresponding to those conferred on enforcement officers by Schedule (Enforcement powers in respect of ships) to this Act but subject to such conditions or limitations, if any, as he may impose.

(5) Subsection (4) above is without prejudice to any agreement made, or which may be made, on behalf of the United Kingdom whereby the United Kingdom undertakes not to object to the exercise by any other state in relation to a British ship of powers corresponding to those conferred by that Schedule.

(6) The powers conferred by that Schedule shall not be exercised in the territorial sea of any state other than the United Kingdom without the authority of the Secretary of State and he shall not give his authority unless that state has consented to the exercise of those powers,").

After Clause 12, insert the following new clause:

("Jurisdiction and prosecutions

.—(1) Proceedings under this Part of this Act or Schedule (Enforcement powers in respect of ships) in respect of an offence on a ship may be taken, and the offence may for all incidental purposes be treated as having been committed, in any place in the United Kingdom.

(2) No such proceedings shall be instituted—

1. (a) in England or Wales except by or with the consent of the Director of Public Prosecutions or the Commissioners of Customs and Excise;
2. (b) in Northern Ireland except by or with the consent of the Director of Public Prosecutions for Northern Ireland or those Commissioners.

(3) Without prejudice to subsection (2) above no proceedings for an offence under section (Ships used for illicit traffic) above alleged to have been committed outside the landward limits of the territorial sea of the United Kingdom on a ship registered in a Convention state shall be instituted except in pursuance of the exercise with the authority of the Secretary of State of the powers conferred by Schedule (Enforcement powers in respect of ships) to this Act; and section 3 of the Territorial Waters Jurisdiction Act 1878 (consent of Secretary of State for certain prosecutions) shall not apply to those proceedings,").

The noble Earl said: I beg to move Amendments Nos. 8 to 10 en bloc. I have already spoken to them.

Lord Mishcon

Do we have to be as pedantic as it seems we are in subsection (3) of the new clause in Amendment No. 8? The subsection says: A certificate purporting to be issued by or on behalf of the government of any state to the effect that the importation or export of a controlled drug is prohibited by the law of that state shall be evidence, and in Scotland sufficient evidence, of the matters stated". If the words were "sufficient evidence" for both countries I could understand it. However why is it only "evidence" for us but "sufficient evidence" in Scotland? If there is a difference in the sense that "sufficient evidence" in Scotland means incontrovertible evidence, why cannot it be incontrovertible evidence also in the United Kingdom?

Lord Hailsham of Saint Marylebone

This is a mystery which is only understood by Scots lawyers. But there is a distinction. I speak from my experience.

Earl Ferrers

I am deeply indebted to my noble and learned friend for giving me the answer. I was about to give it had my noble and learned friend not intervened. I am sure that the noble Lord will be satisfied that that is the answer, Scottish law is very different from English law and the Scots hold great store by the distinction.

Lord Mishcon

Because I know him to be an honest man, I take the noble Earl's word for it that this was exactly the answer he was going to give even if the noble and learned Lord, Lord Hailsham, had not intervened. I recognise fully that there are different standards of evidence in Scotland as well as different types of pleas. But if Scotland has the terminology "sufficient evidence" and we wish to say that it will be sufficient evidence in the United Kingdom if that certificate is given, why can we not use the one terminology that it shall be "sufficient evidence" in both countries?

4 p.m.

Lord Hailsham of Saint Marylebone

I am not the person who is competent to speak about Scottish law, but I think the noble Lord will find that if evidence in Scotland is insufficient it does not and cannot prove the case, whereas evidence in England can prove the case, notwithstanding the fact that if it were controverted it might not be sufficient.

Earl Ferrers

I have reason to be deeply indebted to my noble and learned friend. However, to make matters perfectly clear to the noble Lord, Lord Mishcon, I should say—

Lord Hailsham of Saint Marylebone

We appear to have the answer on a piece of paper.

Earl Ferrers

I was trying to explain that the only reason that I said that my noble and learned friend had provided the answer that I would have given was that when he said what he did I was reminded of what the answer might have been. I might have forgotten that, had my noble and learned friend not said it. Sufficient evidence in Scotland means admissible evidence. The two terms are intended to have the same effect. I hope that the noble Lord, Lord Mishcon, who I know is very well versed in these matters, is satisfied with that answer. If he is not, he will no doubt let me know and I shall do my best to give him a long and detailed reply by letter.

On Question, amendments agreed to.

Earl Ferrers moved Amendment No. 11: After Clause 12, insert the following new clause:

("Extradition

(1) The offences to which an Order in Council under section 2 of the Extradition Act 1870 can apply shall include drug trafficking offences.

(2) In paragraph 15 of Schedule 1 to the Extradition Act 1989 (extradition offences treated as within jurisdiction of foreign states) after paragraph (i) there shall be inserted "or

(j) a drug trafficking offence within the meaning of the Drug Trafficking Offences Act 1986,".

(3) At the end of subsection (2) of section 22 of the said Act of 1989 (extradition offences under Conventions) there shall be inserted— (h) the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances which was signed in Vienna on 20th December 1988 ("the Vienna Convention"). and at the end of subsection (4) of that section there shall be inserted "and

(h) in relation to the Vienna Convention, any drug trafficking offence within the meaning of the Drug Trafficking Offences Act 1986." ")

The noble Earl said: In moving Amendment No. 11, I shall speak also to Amendments Nos. 17 and 20. This new clause proposed at Amendment No. 11 deals with extradition. Its purpose is to give effect to Article 6 of the Vienna Convention. Article 6 makes provision of a kind commonly found in such international agreements, the essential elements of which are that: first, criminal offences under national laws which give effect to the convention are deemed to be extraditable offences in any extradition treaty between parties to the convention; secondly where a party's extradition law depends on the existence of a treaty and there is no such treaty with another party, the convention may serve as a legal basis for extradition in respect of offences covered by it; and thirdly, a party in whose territory an alleged offender is found shall itself either extradite or prosecute.

United Kingdom extradition law is now largely contained in the Extradition Act 1989. This defines an extradition crime as one which carries imprisonment for a term of 12 months or more. The fresh offences created by the Bill are punishable on trial on indictment with terms of over 12 months, and so no additional provision is required in respect of Commonwealth countries. Nor need we be concerned about states which are parties to the European Convention on Extradition which we intend to ratify shortly and other foreign states with which we establish new treaties under the 1989 Act. But for the time being extradition with the remaining foreign countries with which we have arrangements will continue to be governed by treaties made under the Extradition Act 1870. It is therefore, necessary in respect of the latter to make provision so that new offences are treated as extraditable for the purposes of an Order in Council under Section 2 of the 1870 Act. This is the intention of subsection (1) of the amendment.

Subsection (2) provides that for the purposes of extradition, extra-territorial drug trafficking offences are to be treated as falling within the jurisdiction of foreign states. Subsection (3) adds the Vienna Convention to the list of international conventions in Section 22 of the 1989 Act which permit extradition for relevant offences to or from other parties to the respective conventions if the United Kingdom has no regular extradition arrangements with them.

Amendment No. 17 amends the provisions permitting extension of the Bill to the Channel Islands, the Isle of Man or any colony. The new clause concerning extradition does not require to be extended to the islands by Order in Council because the Extradition Act 1989, which it amends, applies there directly. The amendment, therefore, recognises that it is not necessary to extend the entire Bill by Order in Council and permits exceptions. Amendment No. 20 makes two minor consequential amendments to the Extradition Act, 1989. I beg to move.

Lord Harris of Greenwich

I take it that the provision referring to the Channel Islands and the Isle of Man means that there will not have to be any legislation passed by the legislatures of the Isle of Man, Jersey and Guernsey. I assume that it will be done at the instance of the British Government without the need for legislation in each of those three territories because, as the noble Earl will be aware, problems have arisen in the past as a result of rather slow progress in those legislatures on the drug trafficking offences legislation which we have been discussing this afternoon.

Earl Ferrers

As regards extradition, that functions automatically.

On Question, amendment agreed to.

Clause 13 [Application of ancillary provisions of Misuse of Drugs Act 1971]:

Earl Ferrers moved Amendment No. 12: Page 11, line 37, leave out ("section 11 or 12") and insert ("Part II").

The noble Earl said: Subsection (3) of Clause 13 extends Section 21 of the Misuse of Drugs Act 1971. Its effect is that, where an offence under Clause 11 or 12 committed by a body corporate is proved to have been committed with the consent or connivance of, or attributable to the neglect of specified officers of the body corporate then the officers shall also be guilty of the offence and liable to criminal proceedings. The effect of this amendment is to substitute for the offences under Clauses 11 and 12 all the offences provided in Part II of the Bill. This includes the new offences provided for by Amendments Nos. 4 and 8. This is really consequential on the expansion of Part II of the Bill by the amendments which we are discussing. I beg to move.

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 13: Page 12, line 1, leave out subsection (5).

The noble Earl said: Clause 13(5) of the Bill provides for the extension of Section 27 of the Misuse of Drugs Act so as to give courts power to order the forfeiture of items relating to offences committed under Clause 11. This is no longer needed because Section 27 of the 1971 Act was in fact amended by Section 70 of the Criminal Justice Act 1988 to cover all drug trafficking offences. This is therefore almost a drafting amendment. I beg to move.

On Question, amendment agreed to.

Clause 13, as amended, agreed to.

Clause 14, [Consequential amendments of Drug Trafficking Offences Act 1986 and Criminal Justice (Scotland) Act 1987]:

On Question, Whether Clause 14 shall stand part of the Bill?

Earl Ferrers

By virtue of Amendment No. 19 all the provisions presently contained within Clause 14 are to be transferred into Schedule 3 to the Bill. Clause 14 is, therefore, no longer necessary. This is devised really to tidy up the Bill. I hope that the Committee will approve of such tidying measures. I beg to oppose the Question that the clause stand part of the Bill.

Clause 14 negatived.

Earl Ferrers moved Amendment No. 14: After Clause 14, insert the following new clause:

("Interpretation of Part II:

.—(1) In this Part of this Act— British ship" means a ship registered in the United Kingdom or a colony; Convention state" has the meaning given in section (Ships used for illicit traffic) (1) above; scheduled substance" has the meaning given in section 11(4) above; ship" includes any vessel used in navigation; the territorial sea of the United Kingdom" includes the territorial sea adjacent to any of the Channel Islands, the Isle of Man or any colony; the Vienna Convention" means the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances which was signed in Vienna on 20th December 1988.

(2) Any expression used in this Part of this Act which is also used in the Drug Trafficking Offences Act 1986 has the same meaning as in that Act.

(3) If in any proceedings under this Part of this Act any question arises whether any country or territory is a state or is a party to the Vienna Convention, a certificate issued by or under the authority of the Secretary of State shall be conclusive evidence on that question.").

The noble Earl said: The main purpose of this new clause is to define certain terms used in Part II of the Bill. I think the Committee will agree that these provisions do not need any explanation. The clause also provides for the issue by the Secretary of State of certificates confirming whether any country or territory is a party to the Vienna Convention. That could be relevant, for example, in proving whether or not a foreign vessel was a convention vessel, and as such could have been legitimately boarded on the high seas with the consent of the competent authorities of the country of registration. I beg to move.

Lord Mishcon

I may be making this point out of sheer ignorance, but should there not be a definition of a colony in view of the way in which independence is given to almost every one of the constituent parts of what was our empire? The amendment states: British ship" means a ship registered in the United Kingdom or a colony". In other definitions one should at least define which countries are colonies and name them because they may fast disappear.

Earl Ferrers

I believe that that is probably a good reason for not naming them. However, it had escaped my notice that there is a definition of a colony in the Interpretation Act 1978.

On Question, amendment agreed to.

Clause 15 agreed to.

Clause 16 [Consequential amendments, repeals and revocation]:

Earl Ferrers moved Amendment No. 15: Page 12, line 28, after ("on") insert ("or otherwise relating to").

The noble Earl said: This is a very minor amendment. As the Bill stands at present Clause 16 refers to Schedule 3 of the Bill. Clause 16 indicates that the amendments contained in Schedule 3 are consequential on the remaining provisions of the Bill. After the addition of the further paragraphs to Schedule 3 proposed in Amendment No. 19 it would not be strictly accurate to describe all the amendments contained in Schedule 3 as being consequential. Therefore we propose adding the words "or otherwise relating to". I beg to move.

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 16: Page 12, line 28, at end insert— ("( ) For the avoidance of doubt it is hereby declared that the amendment by that Schedule of the definition of "drug trafficking offence" in section 38(1) of the Drug Trafficking Offences Act 1986 applies to that definition as applied by any other enactment, including this Act.").

The noble Earl said: The amendment is linked with the proposal to amend the definition of "drug trafficking" in Section 38(1) of the Drug Trafficking Offences Act 1986. In the present print of the Bill that provision is found in Clause 14(1) but as a result of Amendment No. 19 it will be transferred to Schedule 3. The purpose of the amendment is simply to make it clear that the revised term "drug trafficking offence" applies not only for the purposes of the 1986 Act but also for those of other enactments, for example certain provisions of the Criminal Justice Act 1988 and the provisions of this Bill. I beg to move.

On Question, amendment agreed to.

Clause 16, as amended, agreed to.

Clause 17 [Short title, commencement and extent]:

Earl Ferrers moved Amendment No. 17: Page 12, line 40, leave out from ("that") to ("modifications") in line 41 and insert ("the provisions of this Act shall extend, with such exceptions and").

The noble Earl said: I spoke to the amendment in connection with Amendment No. 11. I beg to move.

On Question, amendment agreed to.

Clause 17, as amended, agreed to.

Schedules 1 and 2 agreed to.

Earl Ferrers moved Amendment No. 18: After Schedule 2, insert the following new schedule:

("SCHEDULE ENFORCEMENT POWERS IN RESPECT OF SHIPS

Preliminary 1.—(1) In this Schedule "an enforcement officer" means—

1. (a) a constable;
2. (b) an officer commissioned by the Commissioners of Customs and Excise under section 6(3) of the Customs and Excise Management Act 1979; and
3. (c) any other person of a description specified in an order made for the purposes of this Schedule by the Secretary of State.

(2) The power to make an order under sub-paragraph (1)(c) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament. (3) In this Schedule "the ship" means the ship in relation to which the powers conferred by this Schedule are exercised.

Power to stop, board, divert and detain

2.—(1) An enforcement officer may stop the ship, board it and, if he thinks it necessary for the exercise of his functions, require it to be taken to a port in the United Kingdom and detain it there.

(2) Where an enforcement officer is exercising his powers with the authority of the Secretary of State given under section (Enforcement powers) (2) of this Act the officer may require the ship to be taken to a port in the Convention state in question or, if that state has so requested, in any other country or territory willing to receive it.

(3) For any of those purposes he may require the master or any member of the crew to take such action as may be necessary.

(4) If an enforcement officer detains a vessel he shall serve on the master a notice in writing stating that it is to be detained until the notice is withdrawn by the service on him of a further notice in writing signed by an enforcement officer.

Power to search and obtain information

3.—(1) An enforcement officer may search the ship, anyone on it and anything on it including its cargo.

(2) An enforcement officer may require any person on the ship to give information concerning himself or anything on the ship.

(3) Without prejudice to the generality of those powers an enforcement officer may—

1. (a) open any containers;
2. (b) make tests and take samples of anything on the ship;
3. (c) require the production of documents, books or records relating to the ship or anything on it;
4. (d) make photographs or copies of anything whose production he has power to require.

Powers in respect of suspected offence

4. If an enforcement officer has reasonable grounds to suspect that an offence mentioned in section (Offences on British ships) or (Ships use for illicit traffic) of this Act has been committed on a ship to which that section applies he may—

1. (a) arrest without warrant anyone whom he has reasonable grounds for suspecting to be guilty of the offence; and
2. (b) seize and detain anything found on the ship which appears to him to be evidence of the offence.

Assistants 5.—(1) An enforcement officer may take with him, to assist him in exercising his powers—

1. (a) any other person; and
2. (b) any equipment or materials.

(2) A person whom an enforcement officer takes with him to assist him may perform any of the officer's functions but only under the officer's supervision.

Use of reasonable force 6. An enforcement officer may use reasonable force, if necessary, in the performance of his functions.

Evidence of authority 7. An enforcement officer shall, if required, produce evidence of his authority.

Protection of officers 8. An enforcement officer shall not be liable in any civil or criminal proceedings for anything done in the purported performance of his functions under this Schedule if the court is satisfied that the act was done in good faith and that there were reasonable grounds for doing it.

Offences 9.—(1) A person is guilty of an offence if he—

1. (a) intentionally obstructs an enforcement officer in the performance of any of his functions under this Schedule;
2. (b) fails without reasonable excuse to comply with a requirement made by an enforcement officer in the performance of those functions; or
3. (c) in purporting to give information required by an officer for the performance of those functions—
1. (i) makes a statement which he knows to be false in a material particular or recklessly makes a statement which is false in a material particular; or
2. (ii) intentionally fails to disclose any material particular.

(2) A person guilty of an offence under this paragraph is liable on summary conviction to a fine not exceeding level 5 on the standard scale.").

The noble Earl said: I spoke to the amendment with Amendment No. 7.I beg to move.

Lord Mishcon

This is only a small point but perhaps the noble Earl will be good enough to consider it. Paragraph 7 of the amendment states that the enforcement officer: shall, if required, produce evidence of his authority". That may be very misleading if it is deemed to be oral evidence. I should have thought that the word "written" before "evidence" would be an improvement. All the enforcement officer would have to do would be to produce his authentication in writing. If it is left as "evidence" that could lead to misunderstanding and possibly to a great deal of argument by barrack room lawyers.

Earl Ferrers

I have little doubt that it means written evidence but I shall certainly look into the point.

On Question, amendment agreed to.

Schedule 3 [Consequential Amendments]:

Earl Ferrers moved Amendment No. 19: Page 14, line 43, at end insert—

("The Criminal Justice Act 1982

1A. At the end of Part II of Schedule I to the Criminal Justice Act 1982 there shall be inserted—

"Criminal Justice (International Co-operation) Act 1990

Section (Concealing or transferring proceeds of drug trafficking) (concealing or transferring proceeds of drug trafficking)."

The Drug Trafficking Offences Act 1986

1B.—(1) The Drug Trafficking Offences Act 1986 shall be amended as follows.

(2) In section 2(4) after the words "section 24 of this Act" there shall be inserted the words "or section Concealing or transferring proceeds of drug trafficking of the Criminal Justice (International Co-operation) Act 1990".

(3) In the definition of "drug trafficking" in section 38(1) after paragraph (c) there shall be inserted— (d) manufacturing or supplying a scheduled substance within the meaning of section 11 of the Criminal Justice (International Co-operation) Act 1990 where the manufacture or supply is an offence under that section;".

(4) In the definition of "drug trafficking offence" in section 38(1) after paragraph (d) there shall be inserted— (dd) an offence under section 11, Concealing or transferring proceeds of drug trafficking or Ships used for illicit traffic of the Criminal Justice (International Co-operation) Act 1990;", and in paragraph (e) for "(d)" there shall be substituted "(dd)".

The Criminal Justice (Scotland) Act 1987

1C. In section 1(6) of the Criminal Justice (Scotland) Act 1987 after paragraph (d) there shall be inserted— (e) manufacturing or supplying a scheduled substance within the meaning of section 11 of the Criminal Justice (International Co-operation) Act 1990 where the manufacture or supply is an offence under that section;" ").

The noble Earl said: The amendment adds to the consequential amendments specified in Schedule 3 three new paragraphs which are numbered 1A, 1B and 1C.

Paragraph 1A proposes an amendment to Part II of Schedule 1 of the Criminal Justice Act 1982. Its effect is to extend the categories of prisoners in respect of which the Secretary of State has no power of early release to include those who are convicted of the offence (proposed by Amendment No. 4) of concealing or transferring the proceeds of drug trafficking.

Paragraph 1B proposes three amendments to the Drug Trafficking Offences Act 1986. The Drug Trafficking Offences Act allows a court, in making a confiscation order against a convicted drug trafficker, to assume that any property which has come into the defendant's possession in the period prior to the institution of proceedings represents the proceeds of drug trafficking. The one situation in which the 1986 Act does not allow that assumption to be made is where the drug trafficking offence is solely that of money laundering. The effect of the first of the amendments is to ensure that the same distinction is preserved in regard to the new money laundering offences created by the Bill. The second and third amendments to the 1986 Act transfer into Schedule 3 what in the Bill as introduced were subsections (1) and (2) of Clause 14 with the addition of references to the new clauses proposed as Amendments Nos. 4 and 8.

The proposed amendment to the Criminal Justice (Scotland) Act 1987 simply transfers into Schedule 3 what was Clause 14(3) in the Bill as printed. I beg to move.

On Question, amendment agreed to.

Schedule 3, as amended, agreed to.

Schedule 4 [Repeals]:

Earl Ferrers moved Amendment No. 20: Page 15, line 38, at end insert—

(1989 c.33.	The Extradition Act 1989.	In section 22(4)(f)(ii) the word "and".
		In Schedule 1, in paragraph 15(h) the word "or" where it last occurs.").

The noble Earl said: I spoke to the amendment with Amendment No. 11. I beg to move.

On Question, amendment agreed to.

Schedule 4, as amended, agreed to.

House resumed: Bill reported with amendments.