§ 4.48 p.m.
§ House again in Committee.
§ Schedule 1 [Forfeiture of terrorist cash]:
§
Lord Kingsland moved Amendment No. 5:
Page 75, line 11, after "currency" insert "whether legal tender or not".
§ The noble Lord said: In moving Amendment No. 5, I wish to speak also to Amendments Nos. 6 to 15 and 17 to 19. I believe that the noble Lord, Lord Rooker, will speak to Amendments Nos. 20 to 22.
§ The amendments are largely inspired by the Law Society of Scotland. Amendment No. 5 extends the definition of "cash" for the purposes of Schedule 1. It seeks to ensure that banknotes which are not regarded as legal tender, including counterfeit currency, will come within the ambit of the Bill in relation to forfeiture, seizure and detention of terrorist cash.
§ Amendment No. 6 probes the circumstances in which it would not be reasonably practicable to seize only the part of the cash which relates to terrorist cash. We would appreciate clarification of the circumstances in which the Government envisage that terrorist cash could not be separated from the whole.
§ Amendments Nos. 7, 10 and 17 seek to extend the initial period of detention of seized cash from 48 hours to eight days. In our view, authorised officers should be given sufficient time in which to investigate the origin and intended use of such cash. The proposed eight-day period would provide a reasonable time-scale within which to conduct such inquiries and may prevent unnecessary applications for an extension of the detention period.
§
Amendment No. 8 would ensure that those persons with,
an interest in the detained cash",
have an opportunity to make representations to the court regarding its continued detention. If cash is to be detained for a maximum of two years, it is appropriate that a person with an interest in the cash should have an opportunity to make representations to the court. Unless such a provision is included in the Bill, the court may make a detention order on the basis of incomplete or inadequate information.
§ Amendment No. 9 seeks to ensure that the suspect and any third party have a right of appeal and the means to be able to make it. A seizure of funds can have adverse effects on innocent third parties and on legitimate businesses, as well as on the suspect. In our view, there should be a right to representation, funded by legal aid, where necessary, and rights of appeal when the property is seized or subject to a restraint order. The seizure provisions should be subject to PACE codes of practice.
330
§
Amendment No. 13 seeks to ensure that the civil procedure to forfeit detained cash cannot take place until,
criminal proceedings have been concluded or a decision has been taken by",
a law officer not to proceed with the case. We are of the view that the relationship between civil and criminal proceedings should be examined and provision made in the Bill to ensure that consideration is given to an application for civil forfeiture only after a determination has been reached in relation to the criminal prosecution. To do otherwise may, we believe, prejudice evidence that is essential for the criminal trial and subsequent confiscation order.
§ Amendment No. 14 seeks to make it clear that "forfeiture proceedings" in this part of the Bill are "civil proceedings". It is vital for the nature of the proceedings to be clear in the Bill; that will ensure that an appropriate procedure is used and that the correct regulations are applied for the purposes of legal aid.
§ Amendment No. 15 provides for "rules of court" to be made to specify the practice and procedure to be adopted in appeals proceedings. Specific provision should be made in the Bill to allow rules of court to be developed for appeal proceedings. Unless that enabling power is included, no provision can be made to govern the procedure of the hearings.
§
Amendment No. 18 probes the circumstances in which it would be considered appropriate for a court to award compensation under paragraph 10(4) of Schedule 1. If,
the applicant has suffered loss as a result of the detention of the cash",
and the court is satisfied that it would be reasonable to award compensation, such compensation should be granted. It is difficult to ascertain why compensation should be restricted to exceptional circumstances, as is currently proposed.
§ Finally, Amendment No. 19 would extend the circumstances in which a person will be held to have obtained property through terrorism. As the Bill is currently drafted, it takes no account of the situation in which a person has acquired property in consequence of an act of terrorism. For example, the situation could arise in which a terrorist purchases or disposes of shares in a company that is subsequently adversely affected by an act of terrorism. That person may benefit from the purchase or disposal, depending on fluctuations in the stock market, as a result of that terrorist activity. Property that is acquired "in consequence or the planned act of terrorism should be subject to the Bill's provisions. The amendment would ensure that such property was covered.
§ I am greatly reassured by the fact that Amendment No. 5 and many of the amendments that are grouped with it are supported by the noble Earl, Lord Mar and Kellie. I beg to move.
§ The Earl of Mar and KellieMembers of the Committee should not take too seriously the fact of my support, which the noble Lord, Lord Kingsland, mentioned. However, that does not mean that I do not 331 support the amendments, most of which come from the Law Society of Scotland and 12 of which are in my name.
The noble Lord explained the amendments very well, so I shall mention only Amendment No. 5. I shall be very surprised if that amendment is not agreed to. It draws the Committee's attention to the fact that Scottish banknotes are not legal tender. Unless the amendment is agreed to, it will be perfectly reasonable for terrorists to hold their ill-gotten gains—or otherwise—in Scottish banknotes. I am certain that that is not the Government's intention. I look forward to the Minister's comments.
§ Lord Williamson of HortonI, too, want briefly to discuss Amendment No. 5, which deals with the forfeiture of terrorist cash. It is extremely important to include the Scottish point. The provisions should be absolutely watertight. Will the Minister explain whether currency that is not legal tender may be seized, and whether, therefore, the amendment is necessary? Terrorists are likely to be adept at acquiring Scottish notes and at shifting cash between currencies. I very much doubt whether they subscribe to the view that they should save the pound.
I shall give another example. It would be possible to transfer pounds into deutschmarks at the end of December this year. From 1st January those deutschmarks will not be legal tender under German law, but they could still be used for all transactions. That may seem a rather curious position but it would establish a loophole involving the transfer of terrorist cash. The amendment is important, irrespective of the Scottish point, which I also support. I hope that the Minister will make it clear that we do not have a loophole in this context.
§ Lord Howie of TroonI, too, support the amendment. The Scottish element was eloquently raised by the noble Earl, Lord Mar and Kellie. It must have been 30 or 40 years ago when Scottish banknotes were acceptable in England provided that one paid a premium of sixpence, I believe, or a shilling, which the English put away in their piggybanks. The note, although not legal tender, was acceptable provided that one paid a sort of fine for using it. I wonder how that applies in this circumstance. Will Scottish notes be acceptable, provided that a premium is paid, as used to he the case 40 or so years ago?
§ Lord RookerI have not got an answer about Scottish banknotes; I make that clear now. This is what parliamentary accountability is all about—that highlights the scrutiny function of Committee stages. We will find an answer to that excellent question. I do not think that my noble friend Lord Howie was making a point about making money out of a premium.
§ Lord Howie of TroonNo.
§ Lord RookerHowever, I can see the possibility of doing so.
§ Lady Saltoun of AbernethyI thank the Minister for giving way. There is no premium now.
§ 5 p.m.
§ Lord RookerI did not mean it quite like that. I do not want to be misunderstood in Scotland, but I thought there might be another way of making a few bob on the side. In due course I shall move Amendments Nos. 20 to 22.
I shall do my best to respond to the amendments in the spirit in which they were introduced by the noble Lord, Lord Kingsland. I accept that most of them are probing amendments. I shall seek to answer the points raised. We shall have to return to Amendment No. 5 once I have taken advice from my learned friends about Scottish banknotes.
We do not believe that Amendment No. 5 is necessary. Where cash, for example, was known to be counterfeit it would be liable to seizure under normal criminal law for investigation of an appropriate offence. Where it was not known to be counterfeit it might be seized unwittingly in accordance with the Schedule 1 scheme, but once it was discovered to be counterfeit, it could be dealt with under the other powers. We do not believe there is any need for the cash seizure scheme to cover cash which is not legal tender. Powers to deal with such cash and remove it from circulation already exist. I say that on the basis that I shall come back on the point regarding Scottish banknotes. Therefore, I do not believe that Amendment No. 5 is necessary. It is possible that cash could be used for funding various activities. However, we believe that that is taken account of under existing provisions.
I turn to Amendment No. 6. The effect of removing subparagraph (2) would be to deny an authorised officer the possibility of seizing, for example, a traveller's cheque where he knew it was not completely terrorist cash. That is the one example I have. Paragraph 2 caters for instances where the authorised officer may not be able to divide cash into that which he has reasonable grounds to suspect to be terrorist cash and that which he does not; for example, where a traveller's cheque is seized.
That might arise where the officer has intelligence that part of the traveller's cheque was bought with legitimate money and part was bought with the proceeds of terrorism. It is important that the terrorist part of the cash in such circumstances is seized. The effect of the amendment would remove that possibility. Once the cash in the circumstances I outline was paid into an account, which must happen within 48 hours, paragraph 4(2) provides that the non-terrorist part must be repaid. We do not believe, therefore, that the amendment is necessary. I hope that the example I have given explains why the provision is in the Bill.
I turn to Amendment No. 9. It is not wholly clear whether the amendment relates to appeals against forfeiture of seized cash or to the restraint orders made under Part 2 of Schedule 1 to the Bill. In the case of a forfeiture order, any other party to the proceedings who is aggrieved by the order may appeal against the order to the Crown Court. That would include the 333 person from whom the cash was seized and also possibly a victim of criminal conduct who claimed that the cash belonged to him.
In the case of a restraint order made by the High Court, anyone affected by the order may appeal to the Court of Appeal. In the case of an appeal against the forfeiture order to the Crown Court, Clause 2(2) of the Bill ensures that legal aid will be available for such proceedings. Likewise, anyone affected by a restraint order can apply to the High Court for the order to be varied or discharged where civil legal aid provisions would apply and a person would be able to appeal from a High Court decision to the Court of Appeal in the normal way. I hope that that will satisfy the noble Lord.
Amendments Nos. 7, 10, and 17 seek to extend the period from 48 hours to eight days. We believe that 48 hours is an appropriate length of time and follows, as I said earlier, the longstanding precedent set out in the drug trafficking provisions dating from 1990. The provision has been used and we have every reason to believe that it has worked extremely well.
At the 48-hour point, an order for continued detention can be made if there are reasonable grounds for suspecting that the cash is terrorist cash and that an investigation into the cash or criminal proceedings is underway. We do not believe that it is appropriate to allow cash to be detained for eight days before a court hearing takes place. I am not sure why the period mentioned is eight days. I have not had the advantage of the briefing. If the answer is not satisfactory, perhaps the noble Lord will come back on that point.
I turn to Amendments Nos. 8 and 11. The person with an interest in the cash seized and detained who claims that the cash seized or part of it is not terrorist cash already has a remedy under the provisions of the Bill and under the revised magistrates' courts' rules. We agree with the sentiment of the amendment. It is right in principle that persons affected by seizure should he able to make the court aware of their concerns. That is why paragraph 3(4) of Schedule 1 ensures that the order for the detention of the seized cash must provide for notice to be given to persons affected by it. Furthermore, the revised magistrates' courts' rules will enable those who are given notice under paragraph 3(4) to make representations. The timescales involved for the first hearing will not mean, however, that the opportunity to make representations at that point will be possible. For those reasons, we see no need for the amendment.
The effect of Amendment No. 12 is to do away with the requirement to place certain instruments—the subject of seizure—in an interest-bearing account on the simple grounds that it is not possible to do so. We believe that the amendment is aimed at the fact that it may be difficult to pay some of the instruments defined in paragraph 1(2) as being cash into an interest-bearing account.
I understand that it is possible to pay all types of monetary instruments defined as cash under paragraph 1 of the schedule into such an account. 334 Bonds and bearer shares will first have to be converted to cash. If the definition of "cash" is extended using the order-making power under paragraph 1(3)—I am not making law on my feet, but I suspect that provision may have to be extended to cover such bank notes as were referred to earlier—we would ensure that any additional instruments could also be paid into an interest-bearing account.
It is important that cash is paid into an interest-bearing account. There is a simple reason for that. It will avoid the possibility of paying compensation in lieu of interest if a forfeiture order is not made. Therefore, we see no need for the amendment.
Amendment No. 13 seeks to link the terrorist cash seizure scheme with criminal proceedings. We believe that that would be a big mistake. It is not appropriate to make that link as the seizure scheme stands alone. It is not part of the criminal proceedings that might or might not follow. The seizure scheme is a civil scheme focusing on the cash. It has nothing to do with the individual, his guilt or innocence. It would be a mistake to link those. It may be that an individual linked to the cash is facing proceedings for terrorism matters. However, that will not necessarily be the case. Cash might be found without anyone present or any obviously identifiable owner; or the carrier of the cash which may be used for terrorist purposes may be wholly innocent. Therefore, such a link would be a mistake. There is no link between the cash proceedings and any criminal proceedings. That is why Clause 1(2) provides that the powers in Schedule 1 are exercisable in relation to cash whether or not proceedings have been brought for an offence in relation to the cash. The amendment would undermine Clause 1(2). For those reasons I hope that the noble Lord will reconsider and, in due course, not move the amendment.
Amendment No. 14 seeks to make forfeiture proceedings under Part 3 of Schedule 1 to the Bill civil proceedings. I draw the noble Lord's attention to that. I realise that the Bill has been rewritten and slightly changed from how it was in the other place. But the issue is already on the face of the Bill in Clause 1(1). It refers to forfeiture in civil proceedings. Therefore, that matter is actually covered.
Amendment No. 15 proposes that the rules of court make provision as to the practice and procedure in connection with proceedings relating to forfeiture. A power to make relevant rules of court is already available by virtue of Section 144 of the Magistrates' Courts Act 1980 and Section 84 of the Supreme Court Act 1981. Rules governing the procedure in relation to detention and forfeiture of terrorist cash were made under those provisions when the Terrorism Act 2000 came into force earlier this year. That was despite the express reference to another rule-making power in Section 31 of the Terrorism Act 2000. The question which immediately comes to mind is why is it necessary to have this duplication? I do not have the answer. However, the fact is that the rule-making provisions are there. We therefore do not believe that the amendment is necessary.
335 Amendment No. 18 concerns compensation in paragraph 10 of Part 4 of the Schedule. If a person's cash is detained but not ultimately made the subject of forfeiture, interest is paid. But if the cash was not put into an interest-bearing account he may be paid compensation in lieu of interest in accordance with the rules set down in paragraph 10(2) of Schedule 1.
The amendment is concerned with the circumstances in which additional compensation may be paid. There are bound to be wholly exceptional circumstances where the normal interest is not sufficient compensation. I have in mind circumstances where a person's cash was detained, and so was unavailable to him, and then was subsequently returned, but that cash had been part of a successful business deal—for example, the buying and selling of a house—and the deal had fallen through to the extent that there had been a considerable loss; in those circumstances he would have grounds for seeking compensation outside and above the interest. But those would be very exceptional circumstances.
There is a lower test for compensation. If we have a lower test, such as that implied in the amendment, then authorised officers may be fearful of making the seizure orders because they might be responsible for large pay-outs. Given the seriousness of the issues at stake, it is not right to bind them in the way that the amendment proposes. Nevertheless, where there are exceptional circumstances, compensation would naturally be payable.
I was not completely clear as to precisely what type of cash Amendment No. 19 was designed to catch. The noble Lord gave an example but the amendment seems to go much wider than the current definition of "property obtained through terrorism" in paragraph 11(1) of Scheclule 1. Property obtained by or in return for acts of terrorism might have been payment for committing a murder. Obtaining property by or in return for acts carried out for the purposes of terrorism might include stealing a car to perpetrate a terrorist act. The purpose of bringing cash which is the proceeds of terrorism within the scheme—in addition to cash which is intended for use in terrorism and cash which belongs to proscribed organisations—is to prevent terrorism. In many cases the proceeds of terrorism are recycled to further terrorist causes. To cast the net too wide would make it difficult to justify cases; for example, how would forfeiting proceeds in the above example of the bargaining of property help to prevent terrorism? Therefore, we cannot support the amendment.
The point is that we are dealing with a civil scheme. We must separate the issue from the people concerned. The people concerned who are linked to the cash, however tenuously, may be wholly innocent, even though it is subsequently proved that that cash was deployed for terrorism.
Amendments Nos. 20, 21 and 22 standing in my name make simple additions to Part 5 of Schedule 1 to the Bill. They tidy up the definition of "property earmarked as terrorist property". Members of the Committee will be aware that Schedule 1 sets out the 336 scheme relating to the cash forfeiture. Part 5 explains when the cash which is, or represents, property obtained through terrorism, falls within the scheme.
Amendments Nos. 20 and 22 are simple drafting amendments. Amendment No. 21 ensures that where property falls outside the scheme and is exchanged for other property, that property also falls outside the scheme. For example, where property obtained through terrorism is sold to a bona fide purchaser who has no idea of its origins, that property will fall outside the scheme by virtue of paragraph 16(1) of Schedule 1. If the bona fide purchaser sells the property in return for cash that cash too will fall outside of the scheme. The amendment ensures that that is the case. I hope that in due course Members of the Committee will accept the three amendments.
§ 5.15 p.m.
§ Lord Howie of TroonBefore my noble friend sits down, perhaps he can clear up a point for me. When he refers to "cash", does he include under that term "currency" whether legal tender or not?
§ Lord RookerOn page 75 of the Bill cash means,
It must be cash that is legal tender because if it is counterfeit cash or is not legal tender, it would not be covered. That is why I am seeking urgent advice on the first question that I was asked about Scottish banknotes.
- "(a) coins and notes in any currency,
- (b) postal orders,
- (c) cheques of any kind, including travellers' cheques.
- (d) bankers' drafts,
- (e) bearer bonds and bearer shares, found at any place in the United Kingdom".
§ The Earl of Mar and KelliePerhaps I could ask the noble Lord to go back to his answers on Amendments Nos. 13 and 14. They were aimed at establishing that forfeiture would be, certainly in Scotland, part of the civil law proceedings. I became slightly confused by what the noble Lord was saying. Can he confirm that forfeiture will be a civil matter?
§ Lord RookerCriminal proceedings and the scheme for the seizure of terrorist cash are two entirely separate processes. Therefore, we do not want a link between the two. We are dealing here with cash seizures which are preventive measures. They stand entirely independently of criminal proceedings. So the latter is simply not relevant to the seizure schemes. The key issue concerns terrorist cash. I hope that I have made that clear. Amendments Nos. 13 and 14 deal with civil procedures. Criminal procedures are prosecutions for acts of terrorism. They are quite separate. We should not make a link between the two.
§ Lord Williamson of HortonI know that the Minister will return to Amendment No. 5. I specifically raised the point about the German currency. It is a very important currency. Huge amounts of money can be shifted in it. From 1st January the deutschmark will 337 not juridically be legal tender. In that case apparently it could not be seized. None the less, early next year one can go into Germany and buy a huge house with deutschmarks. That is the German law. Currency which is not legal tender will be usable for a period of some months.
§ Lord RookerI shall take further advice on that matter and come back to the noble Lord. Like most other sane people I have looked at what foreign currency I have been hanging on to having seen the list of dates by which some European currencies will not be legal tender. There is a gap with some currencies. They will cease to be legal tender but can still be paid in through the banking system. Therefore, it may be that there is a satisfactory answer so far as the deutschmark is concerned.
Schedule 1(2) does not refer to sterling. It states:
'Cash' means … coins and notes in any currency".One assumes that they are legal tender, but if there is a gap because of the transfer to the euro—which is possible, because the dates are not the same in all European countries, as I discovered last week after reading a leaflet from the Department of Trade and Industry—there is a mechanism. That cash must go through the banking system in order to be exchanged—that may be the way around that problem. However, I shall take advice and write to the noble Lord on that point.
§ Lord KingslandFirst, I thank the Minister for giving such a full reply on the many amendments that have been grouped together. I shall briefly respond to what he has said.
First, on Amendment No. 5 and legal tender, the Minister kindly said that he will reflect on the situation regarding Scottish banknotes. I trust that that applies also to the point made about German currency by the noble Lord, Lord Williamson of Horton.
The Minister said that he was content to rely on the criminal law in relation to counterfeit currency. I wonder whether that is the ideal approach. The specific procedure here is a civil procedure. In dealing with other amendments, the Minister has been at pains to emphasise the distinction between the civil and the criminal and the importance of limiting this part of the Bill to civil procedure. Yet, in his reply on Amendment No. 5, he admits that counterfeit funds are a matter for criminal law.
I do not want to make a cheap debating point, but that affects the logic of his position on the importance of civil procedure. Will he further consider the position of counterfeit funds before Report? The point is not just the distinction, in principle, between criminal and civil law but that the criminal rules in relation to counterfeit funds may not be as expeditious as are the civil rules laid down in the schedule.
§ Lord RookerIn seizing the money, having received advice or intelligence or conducted investigations, the authorised officer may come across other possible 338 crimes—not just counterfeiting of money but other criminal activities completely outwith the seizure. The authorised officer would then report to the authorities evidence of criminal activities for investigation. If other possible crimes are discovered—the example that we discussed was the crime of forging banknotes—that does not nullify the fact that the seizure of money is a civil procedure.
§ Lord KingslandWith the greatest possible respect to the Minister, that is true but beside the point. The Minister accepted that the present wording does not cover counterfeit money. He also told your Lordships that seizing funds is a civil law issue. I simply suggest to him that he may want to reflect on the matter before Report.
As to Amendment No. 13, which the noble Earl, Lord Mar and Kellie, seized after the Minister's reply, the Minister was at pains to say that the scheme was civil and had nothing to do with criminal law and criminal guilt. I draw the Minister's attention to Clause 1(1). That defines the circumstances in which cash can be seized in terms of terrorist acts, which are indisputably criminal. If the definition of the cash is itself intimately connected with the criminal law, is it not difficult to envisage how the two regimes will remain separate?
§ Lord RookerSchedule 1 sets up a scheme to deal with the cash. It is a stand-alone scheme. That is the whole point. The cash may be taken in pursuance of investigation before all the evidence is available. It is a stand-alone, civil scheme, and there is no connection between it and the terrorist activity that the cash may be thought to be funding.
§ Lord KingslandWhether or not the scheme, in any particular case, follows its logic through to the final act of forfeiture, the extent to which it moves down that route will depend on a judgment on whether a criminal act has been committed. The nature of that criminal act will be determined in the context of Clause 1(1). Perhaps the Minister will return to that point on Report.
§ Lord RookerI can help the noble Lord. By the way, it goes without saying that I shall reflect before Report on everything that is said in Committee. We must because of the process: issues will be raised that no one has contemplated. I shall be happy to reflect, but I shall read out the latest note that I have received from the Box, because it is helpful. It states:
The origin of the cash might well be criminal. But that does not mean that the person carrying the cash is a criminal.We must separate out the issues. Cash to fund terrorist activities may not be carried by terrorists. Wholly innocent people may carry cash that is the result of criminal activity.
§ Lord KingslandI entirely accept that, but I suggest to the Minister that that in no way undermines my point.
339 I have two other reflections on the Minister's response. On Amendment No. 15, he rightly pointed out that the rules of procedure in our courts cover the issue raised by the amendment. Will the Minister—either now or later—tell us whether that is also true of Scottish law?
Amendment No. 18 concerns the question of exceptional loss. The Minister rightly said that it covers matters other than the payment of interest, and went on to give an example in which, in effect, someone would have the right in law to damages. He was reluctant to state that in terms in the Bill, because he felt that that might act as a disincentive to those officers tasked with the act of seizure. Ought your Lordships to endorse a statement by the Minister to the effect that public officials would be influenced in that way?
§ Lord RookerPublic officials making decisions under law are always aware that they must take account of consequences such as the cost of their actions and issues such as value for money. We do not want a lower test for compensation. There is a severe test for compensation, but we do not want to lower it.
I gave a couple of examples of wholly exceptional cases: a business deal and a house purchase. If money was withheld from someone and they were unable to conduct their deal or purchase, and the money was then returned because it was not terrorist cash, they would clearly have a good claim. That is fair; I accept that. We do not want to lower the test for compensation, as would the amendment, simply because officers taking decisions on the margin about an amount of cash and the circumstances might err on the side of being too cautious. We are in deep water in searching to obtain terrorist cash. The procedure is new and it would be wrong to lower the test.
§ Lord KingslandAs regards human rights, I see the importance of officers being cautious. However, I suggest to the Minister that where an officer finds a legitimate set of circumstances for seizing cash, he should not be put off pursuing his duty by the fact that it might cost the Treasury a little more money than if the Bill were constrained by the current draft.
Finally, I turn to Amendment No. 18. The Minister's reply is a good illustration of why cash conversion—that is, the route it takes into other forms of property or activity—should be traced by a High Court judge and not by a magistrates' court. In the meantime, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 5.30 p.m.
§ [Amendments Nos. 6 to 19 not moved.]
§
Lord Rooker moved Amendments Nos. 20 to 22:
Page 80, line 28, leave out "Property" and insert "Earmarked property obtained through terrorism
Page 80, line 38, leave out "the original property or of and insert "earmarked property, whether the original property or
Page 81, line 1, after "of" insert "earmarked
§ On Question, amendments agreed to.
340§ Schedule 1, as amended, agreed to.
§ Clauses 2 and 3 agreed to.
§ Schedule 2 [Terrorist property: amendments]:
§
Lord Kingsland moved Amendment No. 23:
Page 85, line 19, after "that" insert "each of the requirements for the making of the order is fulfilled
§ The noble Lord said: Amendment No. 23 is part of a series of amendments which alters the procedure for applying for account monitoring orders and the criteria which must be met before such applications can be granted. The amendment makes specific provision in relation to the requirements which must be complied with before an account monitoring order can be made.
§ We believe that an essential requirement has been omitted from the criteria for consideration listed in paragraph 2(1). Reference should he made to the fact that the applicant has reasonable grounds for believing that an audit is likely to be of substantial value to the investigation. We therefore propose an altered wording in the subsequent amendment to include that requirement and to reflect the drafting of an analogous clause in the Proceeds of Crime Bill. If account monitoring orders are to be available under the proceeds of crime legislation as well as tinder this measure, and if the policy intention behind the orders is uniform, it is important that the provisions are broadly similar.
§ Amendment No. 25 makes it clear that an account monitoring order need not be intimated to the holder of the account. The rationale behind the orders, as I understand them, is to allow the appropriate officer to monitor transactions in relation to an account over a period of time without the account holder's knowledge. They are an extension to the production order procedure applicable under the Proceeds of Crime Bill.
§ The new Proceeds of Crime Bill makes specific provision in Clause 367(3) that an application for a production order need not he intimated to the person specified in the application. This part of the Bill is, however, silent in regard to intimation. In our view, in order to avoid ambiguity as to whether intimation is required for the purpose of the account monitoring order, it is preferable to specify the position on the face of the Bill.
§ Amendment No. 26 specifies what information should be included in the information for an account monitoring order. We take the view that an application for an account monitoring order should specify that the person named in the application is subject to a terrorism investigation and that the order is sought for the purposes of that investigation. As currently drafted, these criteria are not referred to as essential elements of the application. Amendment No. 26 seeks to rectify the position and ensure that the drafting of the clause in this respect will reflect the terms of the analogous provisions in the Proceeds of Crime Bill.
§ Amendment No. 28 seeks to introduce the definition of "account information" for the purposes of the clause. The concept of account information is 341 central to this part of the Bill and it is, therefore, important that a clear definition of the phrase is stated on the face of the Bill. The amendment merely seeks to do that; and in doing so replicates the definition in the analogous clause in the Proceeds of Crime Bill.
§ Amendment No. 29 details the requirements which must be satisfied before a judge can make an account monitoring order. Our view is that, before an account monitoring order can be made, the judge should be satisfied not only that there are reasonable grounds for suspecting that the person specified in the application has committed a terrorist offence, but also that there are reasonable grounds for believing that the accounts information will be of substantial value to the investigation. As currently drafted, the Bill makes no provision for those criteria. The amendment seeks to address that and again reflects the drafting of the analogous clause in the Proceeds of Crime Bill.
§ Amendment No. 30 probes the circumstances in which it is envisaged that the description of information in an application could subsequently be varied. We are not satisfied that the description of information specified in an application once granted should be capable of being varied by anyone other than the court. The initial application must be granted by the court and any application to vary or discharge should be considered only by the court and not altered unilaterally on the part of the applicant. If the applicant requires further information to be included, a new application should be submitted and efforts made to ask the court to vary the existing order.
§ Amendment No. 31 makes provision to ensure that information which is subject to legal privilege will not be disclosed under this part of the Bill. Article 8 of the European Convention on Human Rights enshrines the right to privacy. The law is keen to protect the relationship between a solicitor and his or her client and has made provision for the doctrine of legal professional privilege. In order to preserve that relationship, and ensure that such information and communications are privileged, provision should be made on the face of the Bill to the effect that an account monitoring order will not extend to the disclosure of information subject to legal privilege.
§ Amendment No. 32 introduces an additional consideration which the Court of Session must take into account in determining whether to make a restraint order. Paragraph 3 extends the current restraint procedure to enable restraint orders to be granted at an earlier stage in the proceedings. We appreciate that the extension of the procedure may be necessary, in some cases, in order to prevent the disposal of the proceeds of terrorist crime prior to the institution of proceedings.
§ However, due regard must also be had to proportionality and the extent of the evidence available at the investigatory stage. In order to balance the degree of interference which a restraint order imposes in relation to a suspect's property at the early stage of investigation, an assessment should be made as to the likelihood of the assets or property concerned being disposed of at that point. If there is a substantial 342 risk that the property will disappear, or some other factor which suggests a degree of urgency, an application for restraint should be made. The amendment seeks to ensure that any action taken is proportionate.
§ Amendment No. 33 provides for disclosure to a constable or nominated officer as soon as is reasonably practicable. As currently drafted, the Bill provides that a person commits an offence under paragraph 5 of Schedule 2, Part 3, if, inter alia, he or she does not disclose the information to a constable or nominated officer as soon as is practicable after the information comes to him or her. There may, however, be situations in which a person cannot make the disclosure, as soon as would otherwise be practicable, for good reason. In these circumstances, it may be inappropriate to render that person criminally liable. To reflect that, we propose that the offence is restricted to situations in which disclosure is not made as soon as is reasonably practicable.
§ I turn to Amendment No. 34. Paragraph 5 of Schedule 2 inserts new sections in the Terrorism Act 2000 and creates the offence of failing to disclose information relating to certain criminal activities under that Act. The new section imposes a duty on a person to disclose information which leads him to suspect that another individual has committed a terrorism offence. We support the introduction of that new offence but do not see the point of imposing a duty on a person to disclose certain information if it is already in the public domain.
§ For example, suppose that a bank is given information to the effect that Osama bin Laden is a terrorist and has committed one of the offences referred to in the Terrorism Act 2000. If that information comes to the attention of the bank by various means in the course of its business, as it may well do, it will be under a duty to disclose it to a constable or nominated officer. If it fails to do so it will commit an offence. The result is that the constable concerned or nominated officer will be showered with information which is already in the public domain.
§ The constable concerned or nominated officer will have to trawl through documents to find information that is not in the public domain. The task of so doing, if banks are to honour these provisions, as we trust they will, may be too much for the constable concerned or nominated officer and he may miss valuable information which would prevent further acts of terrorism. We therefore propose that information that is already in the public domain need not be disclosed.
§ As to Amendment No. 35, if a person knows or suspects that another has committed a terrorism offence it is important that he discloses the information on which that is based to a constable or nominated officer as soon as is practicable. That disclosure may lead to further inquiries and the prevention of other acts of terrorism. It is conceivable that the disclosure of such information will lead to the saving of thousands of lives.
§ However, we believe that it would be unfortunate if the person who made the disclosure informed the terrorist that he had done so. The terrorist could then 343 take the appropriate precautions to avoid further detection and carry out further acts of terrorism. We see no conceivable reason why he should be told that such a disclosure has been made. Accordingly, we suggest that the person who makes the disclosure should not inform the suspected terrorist that he has made it.
§ We are also concerned that any such person should not be deterred from keeping the disclosure from the suspected terrorist. The sole aim is to catch terrorists and prevent further acts of terrorism. A person who makes a disclosure, but does not tell the suspected terrorist, should not be in fear of any repercussions. Accordingly, we propose that a person who has made a disclosure but does not inform the suspected terrorist should not risk civil or criminal proceedings for failing to do so. I beg to move.
§ 5.45 p.m.
§ The Earl of Mar and KellieI support the amendments spoken to by the noble Lord, Lord Kingsland. Again, almost all of them come from the Law Society of Scotland. They reflect the fact that both the Proceeds of Crime Bill and the present measure are passing through this Parliament for Scotland on the basis of a Sewel Motion. This means that the Scottish Parliament has given up the right to scrutinise the Bill. This legislation is, after all, concerned largely with criminal justice which is clearly a devolved matter. I hope that the Minister takes these amendments extremely seriously because we must get the Bill right for Scotland.
§ Lord RookerI hope to take all the amendments seriously. I appreciate that use has been made of the Sewel Motion. The decision has been made in Scotland that the legislation on these issues should be considered in Westminster. While that agreement has been freely entered into, it does not mean that we do not take the issues seriously because Westminster is to consider the legislation.
I am grateful to the noble Lord for the way he dealt with the amendments. I shall do my best to answer the points that he made. I shall try to keep to the same order, although I have a separate note that is out of kilter. I deal with Amendments Nos. 23 to 29 as a group. The Committee will be aware that Part I of Schedule 2 sets out the scheme relating to the monitoring of bank accounts of terrorist suspects for up to 90 days. This provides for real time disclosure of transactions and other information which will assist the police in their investigations.
The amendments tabled by the noble Lord in large part replicate the clause without changing the substance of the provision, but we believe that where they make substantive changes they are to the detriment of the functions. The principal change that is effected by the amendments is that the grounds that must be satisfied before an order can be made are amended and, in certain respects, the threshold is increased. The amendments remove the existing grounds to be satisfied. Those grounds are the same in substance as those required before the financial order 344 can be made under Schedule 6 of the Terrorism Act 2000. We are trying to mirror the Terrorism Act 2000 as much as possible.
I accept the point about consideration of the Proceeds of Crime Bill in another place. It will be months before that Bill comes to this House—I am unable to forecast its shape—but the Terrorism Act is already on the statute book. We see great benefits to the courts, the police and the financial institutions in framing the powers in this Bill in terms similar to those in the Terrorism Act. In the course of an investigation the police may well use financial information to identify the existence of accounts held by a specified person and use an account monitoring order to obtain disclosure of information relating to the account.
The essence of the difference in approach between noble Lords and the Government is two-fold. First, the court would not be able to make an order unless satisfied that there were reasonable grounds to suspect the person specified in the order of a terrorist offence. Secondly, the police must demonstrate that the information to be obtained would be of substantial value to the terrorist investigation. Put in that way, on the surface they sound reasonable if one forgets the context of the Bill. As to the first point, it assumes that the person specified is suspected of an offence. That may well be true in the majority of cases, but it is not necessarily so. The police may well wish to obtain information relating to transactions on an account when the account holder—the specified person—may be innocent and is perhaps being used by others for terrorist purposes. The amendments tabled by the noble Lord would preclude the use of an order in such cases.
Even in those cases where the person specified is the suspect, the requirement to have reasonable grounds would preclude the use of this investigatory tool at an early stage in the investigation when it might not be possible to establish such reasonable grounds. We are not being unreasonable. These account monitoring orders are approved by a judge. This is not the Government and the police going off willy-nilly.
The purpose of the order is to help deal with terrorist crime and the financing of terrorists. We need the order to assist in the investigations of an inquiry. To that extent, of course, the investigation is the means of establishing the reasonable grounds for believing offences may be committed. In the early part of an inquiry, the reasonable grounds test may not be met, but it would be sufficient under the terms of the schedule for the judge to grant the order.
The second essential difference to which I referred—that the order must be of substantial value to the investigation—again imposes a different test in relation to the account monitoring orders than that which exists in the financial orders under the Terrorism Act at the moment. As I explained, we see real benefits in keeping the two procedures similar. To use a different formulation would lead to questions as to whether one is intended to be more stringent than the other.
345 In so far as the noble Lord seeks to raise the threshold for the granting of an order, the Government feel that this would greatly limit its value to the police in their important work of combating the funding of terrorism. We believe it is right that the police should demonstrate that the order will be of value—this is already provided for—but we do not think it should go any further than that.
As to Amendment No. 25, the purpose of the account monitoring order is to investigate a suspected terrorist without indicating to the holder of the account that he or she is being investigated. The amendment tabled by the noble Lord seeks to make clear that the police, when making the application, need not tell the person to whom the application relates. The Government agree that this should be the case. That is why the application is made ex parte without telling anyone else. The amendment does not take the matter any further at all. The police certainly do not need reminding that the whole purpose of the account monitoring order is to examine someone's finances without alerting that person to the investigation.
It may assist the Committee if I make clear that the court rules will require the court to serve notice of the order, if made, on the financial institution but not on the person specified in the application. I hope that this explanation satisfies the noble Lord.
Amendment No. 31 seeks to provide for the circumstances where a financial institution would want to refuse to provide information on the grounds of legal privilege. The information which would be disclosed by virtue of an account monitoring order would relate to the account—principally, details of transactions. We cannot see any occasion when such information would be legally privileged. We believe, therefore, that the amendment is unnecessary.
Amendment No. 32 seeks to spell out for Scotland what is inherent in the process by which the Court of Session comes to make a restraint order—in other words, the court must have reasonable grounds for suspecting that property will be disposed of prior to the conclusion of proceedings. This is another way of articulating the civil standard of proof on which the Court of Session has to be satisfied before it makes the restraint order.
As the Committee will know, a restraint order is in the nature of an interim or temporary provision. Any judge will require to be satisfied, on reasonable grounds, that the property concerned is likely to be disposed of, but it would be unusual—and unduly selective in this context—to make the express provision contemplated in the amendment.
I say that for the following reasons. First, the amendment concerns Scotland only, but there are comparable provisions for England and Wales at paragraph 2(2) of Schedule 2 to the Bill and for Northern Ireland at paragraph 4(2), and no amendment is proposed for those provisions. There is a clear implication that there is a Scottish speciality here when in fact there is none whatever.
346 Secondly, no comparable express requirements are proposed for Scotland in relation to the power of the Court of Session under paragraph 18(1) of Schedule 4 to the Terrorism Act 2000. This also concerns the power of the Court of Session to make a restraint order, so there is a further clear implication of a speciality for this particular power only, which is incorrect.
I am grateful for the opportunity to make clear that a court will have to be satisfied, on a civil standard of proof, that a restraint order is necessary because the property concerned may otherwise be disposed of in the interim. I hope that, in due course, noble Lords will withdraw those amendments.
Amendment No. 34 relates to the information order being in the public domain. The Bill provides that a person does not commit an offence if he has reasonable excuse for failing to disclose. This would be capable of covering a case where a person believed the information to be so widely available that it did not need to be passed to the police. The provision provides a way to assess whether a person should be relieved from his criminal liability—that is, was it reasonable for him to act as he did. This is the proper way to deal with what the amendment refers to as "information in the public domain".
It is a wholly reasonable amendment for the noble Lord to table. In the case of wide-spread, publicly available information, it would be quite preposterous to consider that someone had committed an offence because he did not pick up a phone, ring the police and say, "By the way, do you know about this?" I hope the Committee will think that there is an adequate defence.
Amendment No. 35 has a sensible aim. It seeks to ensure that a person who knows or suspects another of committing an offence does not tip off that other person to the fact that the police have been informed. The amendment also seeks to provide protection for a person disclosing information to the police should civil or criminal proceedings be brought against him for doing so.
The first aim is already adequately achieved by the existing provision in the Terrorism Act 2000. Section 18 provides that it is an offence for a person to enter into or become concerned in an arrangement which facilitates the retention or control by another of terrorist property. The Government believe that this provision addresses the concerns behind the noble Lord's amendment. After all, the whole schedule is an amendment to the Terrorism Act, and therefore we believe that that aim is taken care of.
I have come to the end of the amendments—although I may have missed one out—but the noble Lord raised the issue of an order not being varied by the applicant after the order is made. We agree with him. I regret that I am not sure which amendment this related to, but the provisions sought to be deleted provide for a variation of the description of the information in the application—that is, a variation before the order is made. Once made, the variation to 347 any order must be made by the court. I want to make that absolutely clear and I am glad that I have had the opportunity to put it on the record.
§ Lord KingslandI shall be telegraphic in the few remarks that I am about to make before I withdraw my amendments.
I thank the Minister for drawing my attention to the parallel which the Government are drawing with the Terrorism Act 2000 rather than with the Proceeds of Crime Bill, which is the parallel that has informed many of these amendments. I shall obviously reflect on that issue. I am grateful to the noble Lord.
As to the question of reasonable grounds, the noble Lord went on to say that the grounds for making such an application would not be "unreasonable". I am tempted to ask the noble Lord whether he sees any gap between reasonableness and unreasonableness. There must be some gap, otherwise the Minister would not have resisted my insertion of "reasonable". I shall re-table the amendment. Perhaps between now and Report stage, which is not very far away, the Minister may wish to come back on that point. This is an important matter—the influence of the word "reasonable" over the conduct of public officials.
The noble Lord was reassuring on the question of legal professional privilege. My noble friend Lady Buscombe will be returning to this point at a later stage and in a different context. I ask the Minister to reflect between now and Report whether he really thinks that the fact that it is unsaid is sufficient protection in the context of legislation which has international ramifications, and where legal privileges are viewed in a different light in different countries.
Finally, on the question of "reasonable" excuse for failure to disclose—the question of the public domain—here we have reversal of the burden of proof. Normally, that is legitimate in circumstances where the facts that compose the excuse are uniquely in the domain or knowledge of the accused. I wonder whether, in the circumstances of "public domain", that matches the normal circumstances in which the courts are prepared to tolerate reverse burdens of proof.
I am grateful to the Minister for taking particular care over responding to the amendments. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 24 to 36 not moved.]
§ Schedule 2 agreed to.
§ Clause 4 [Power to make order]:
§ 6 p.m.
§
Lord Goodhart moved Amendment No. 37:
Page 3, line 8, after "action" insert "involving terrorism
§
The noble Lord said: This is a probing amendment. Clause 4 as drafted allows a freezing order to be made if a foreign government or resident is likely to take,
action to the detriment of the United Kingdom's economy (or part of it)".
348
That expression is extraordinarily wide. Perhaps I may give an example. A Japanese company is considering whether to build a new car manufacturing plant in the United Kingdom or in Switzerland. The Swiss Government offer the company a financial inducement to build its plant in Switzerland—something in the nature of, say, a tax holiday.
§ That is plainly action to the detriment of the United Kingdom economy. The result is that, at least in theory, the Treasury could make a freezing order stopping anyone in the United Kingdom, or United Kingdom nationals resident abroad, from making payments to the Swiss Government. Some people might say that that was quite right, but I am sure that it was not the intention. I want to probe why such a wide-ranging clause has been adopted.
§
I expect to be told that the reason is Chat the wording was drawn from Section 2 of the Emergency Laws (Reenactments and Repeals) Act 1964, the section being repealed by the Bill and replaced with this provision. I accept that the wording is drawn from that section. But Section 2 of the 1964 Act dealt with a much narrower issue. It covered the case where a foreign government made an order requiring someone to make a payment or to transfer gold or securities to them and the United Kingdom Government was, under the 1964 Act, given power to block anyone within United Kingdom jurisdiction from complying with the foreign government's order. So the reference in that case to,
action to the detriment of the United Kingdom's economy",
had a much narrower scope than the new one does. Indeed, the 1964 Act goes back to the days of exchange control. I suppose that the reference to gold is a reference to the days when gold had some real monetary function.
§ The result is that, whereas the wording was not excessively wide in relation to the 1964 Act, it is wholly excessive when applied to Clause 4 of the Bit. Therefore, Amendment No. 37 requires the action which is to the detriment of the United Kingdom economy to be action "involving terrorism". I assume that that is the main part of what is specifically intended by this clause. It is not necessarily the right way, but I believe that the Government should ask the draftsman to re-examine the clause. As it stands, it is so excessively wide as to be unsatisfactory. I beg to move.
Lord RentonBefore the Minister replies, perhaps the noble Lord, Lord Goodhart, will bear with me for a moment. He seeks to insert into Clause 4 the words "involving terrorism", whereas the clause deals with matters to the detriment of the economy.
We are entitled to look to the Long Title to help us to interpret the Bill. It is intended,
To amend the Terrorism Act 2000; to make further provision about terrorism and security",and, as a separate item,to provide for the freezing of assets".349 That is what Part 2, and especially Clause 4, purport to do. To insert the words "involving terrorism", would limit the application of Clause 4, and that would be unfortunate.
§ Lord GoodhartI am grateful to the noble Lord, Lord Renton, for raising that point. He is right. The Long Title of the Bill does contain the words,
to provide for the freezing of assets".But my amendment as drafted was not intended as a final version. Its purpose is to raise with the Government the point that the power in Clause 4 goes so wide that it must go far beyond anything that it is intended to achieve. It seems to me that the Government should restrict the drafting of the clause. I accept that the Government's objective here may not be limited to terrorism, although no doubt it includes it. I should like them to accept, however, that the present wording is excessively wide and to reconsider it.
§ Lord EltonI find myself surprised and rather alarmed to be in disagreement with my noble friend Lord Renton—possibly for the first time in my parliamentary career. I feel very strongly that emergency legislation should be restricted to the emergency to which it relates. To say that it is wrong to restrict it to that purpose seems to me—if I may respectfully say so—to be misguided.
My position is that one should not give more to a government legislating ventre à terre than is absolutely necessary—because everything that is given to them is scarcely considered. If it does not relate directly to the stated purposes of the legislation, it should not be given.
Lord RentonI say with deep respect to my noble friend that he may not have realised that the words "involving terrorism" are words of limitation. Here, the Government are rightly trying to protect the economy in a broader sense. If the words "involving terrorism" are inserted in the way suggested, on occasions when there could be a detriment to the economy, but not necessarily involving terrorism, the limitation would be regrettable.
§ Lord HyltonI should like to follow up the theme opened by the noble Lord, Lord Renton. I asked yesterday, at col. 242 of Hansard, whether Clause 4 dealing with freezing orders was sufficiently widely drawn to catch illegitimate funds—they derive sometimes from the proceeds of crime, corrupt practices and abuse of state power—placed in London by dictators of foreign states, their families and possibly members of their governments. They place those funds in London not for the benefit of their country but of themselves and their families. The Abacha family case from Nigeria is perhaps the most recent and the most notorious. But it is by no means the only one. It is probable that funds belonging to the Milosevic family followed routes through London. Other similar tyrants include the Duvaliers in Haiti, the Marcos in the Philippines, the so-called Emperor 350 Bokassa in central Africa, General Mobutu in Zaire and possibly even Mr Saddam Hussein in Iraq. Those people have had a new word coined for them: kleptocrats. It should be possible to freeze such moneys on reasonable suspicion before they move out of London to other financial centres almost at the drop of a hat.
It has already been mentioned that the existing law which sometimes makes it possible to freeze moneys passing through London is the Emergency Laws (Re-enactments and Repeals) Act 1964 which continued emergency powers legislation of 1939. The difficulty is that that legislation has seldom been used effectively.
Clause 4(2) of the Bill states that,
action to the detriment of the United Kingdom's economy (or part of it) has been or is likely to be taken by a person or persons".A possible interpretation of those two lines might include harm done to the City of London, our banking and other institutions by their providing a place in which money looted from very poor countries can find a temporary resting place. That may be one way out of the difficulty. Another way might be through the Proceeds of Crime Bill which is still passing through another place. That may not be entirely satisfactory with regard to freezing because it touches only on the recovery of money by means of a civil action in this country.I should like to see prevented the movement out of Britain, in particular London, or the spending, of funds belonging to very suspect dictators and members of governments. I hope that the Government will be able to give a reply. I have almost six pages of detailed accounts dated 4th October of this year on how various Nigerian moneys moved through London and on to banks in other countries between 1996 and 1999. I have since read in the press that it is thought that £100 million passed through the island of Jersey alone. The sums involved are very large and I imagine that Jersey got only a small fraction.
Lord RentonBefore the noble Lord sits down, will he confirm that those various matters which occurred a year or two ago did not necessarily involve terrorism?
§ The Earl of OnslowI disagree with the noble Lord, Lord Hylton. I do not disagree in any way with the ghastliness of the people he mentioned because they are very unpleasant people. However, some of our complaints have been that the Bill has had things attached to it which are extra to the prime purpose of emergency legislation. We might like to hang many things on to the Bill but noble Lords are complaining that there is too much of that already. Therefore, however worthy the point that the noble Lord, Lord Hylton, makes—and it is very worthy—the provision should not be tacked on to the Bill. There is too much of that already, and I hope that we shall take off much of it.
§ Lord HyltonFirst, I agree with the noble Lord, Lord Renton, that the Nigerian money was nothing to do with terrorism.
351 On the points raised by the noble Lord, Lord Elton, and the noble Earl, Lord Onslow, yes, I would rather that the Bill were very narrow, dealing with an emergency. However, that is not what we have been presented with and it is not what the Government appear to wish to achieve. If the Bill is to be a wide measure, perhaps it can do some useful work as well.
§ 6.15 p.m.
§ Lord EltonPerhaps the Minister will reply to the specific point that what he wants to achieve relates to terrorism. If not, I disagree with the noble Lord, Lord Hylton, and agree with my noble friend Lord Onslow: this is not the vehicle for that provision. There should be a different vehicle.
§ Lord Thomas of GresfordI agree with what has been said. The noble Lord, Lord Hylton, rightly raises the serious problem of money laundering through United Kingdom banks amounting to some 630 million dollars. That is a lot of money. In order to deal adequately with that issue, the legislation would have to consider much wider matters than are contained in the clause which deals simply with the Treasury freezing the assets of individuals.
I assume that it is not the Government's intention to legislate generally on money laundering because that is a huge subject which requires a separate Bill. Consequently, I support the submission made by my noble friend.
§ Lord KingslandAmendments Nos. 38 to 40, in the name of my noble friends Lord Dixon-Smith and Lady Buscombe, are in this group. I should like to speak briefly to them.
On Amendment No. 38, we all know that the United States is the prime target of terrorist groups such as A1'Qaeda and is likely to remain so. Countries other than the United Kingdom may be targets or become targets depending on the circumstances. After 11th September we all recognise that the terrorist threat is global and to be effective the response must be global too.
The power to freeze funds where they are likely to be used for terrorism is a useful counter weapon. Why should it be limited to protecting the UK economy and UK nationals and residents? To leave funds here, free for use in terrorism aimed at the United States economy or United States residents, is likely to cause outrage in Washington—and rightly so. Global terrorism needs to be tackled globally. The Government should take the powers necessary to restrain funds that are designed to be used for terrorism outside the United Kingdom.
On Amendment No. 39, we are, in a different way, linking up with the noble Lord. Lord Goodhart. We believe that the power to make a freezing order must be limited. It is not enough simply to show that the action about which a complaint is made will cause some detriment to the United Kingdom economy. We suggest that a freezing order can be made only if the 352 action that is going to cause a detriment to the United Kingdom economy is unlawful or has the intention of causing detriment.
There can be no complaints from those affected by a freezing order if their action is unlawful or intended to cause detriment to the UK economy. If, on the other hand, lawful means are used and no detriment is intended, it would not be right for the Treasury to make a freezing order.
§ Lord McIntosh of HaringeyAs we come to Part 2, I should like to stretch the conventions of the House by referring to an article on the front page of today's Evening Standard. It says that Omar Mohammed Othman, otherwise known as Abu Qatada and described as Osama bin Laden's key contact in Britain, today launched a legally aided High Court hid to be paid social security benefits. He has been cited on a United Nations list of suspected terrorists and, although living on benefits in west London, he was found to have assets of £180,000, which were seized. That is the subject of Part 1, which we have just agreed. He is now using legal aid to come back to the High Court to challenge the decision to suspend benefit. It may be helpful to say how Part 2 operates in respect of that application.
Part 2 makes it clear that the Treasury will have the powers to freeze assets in such circumstances. The provisions enable us to freeze funds when there is a threat to United Kingdom economic interests—I shall come to the constraints in a moment—or to the lives or property of United Kingdom citizens or residents. The freezing order can designate persons, groups or governments outside the United Kingdom and anyone, whether in the United Kingdom or abroad, who assists the funding of such people.
As Mr Othman is included in the United Nations list as an accomplice of bin Laden, under the Bill we could freeze his assets on the basis of intelligence, even if there was no investigation in this country. We could stop the payment of benefits because the freezing orders bind the Crown. We could allow some release of funds, including benefits, where appropriate, to avoid undue hardship. That is provided in paragraph 3 of Schedule 3. We could seize—and have seized—the £180,000 cash that police found in Mr Othman's house under the provisions for cash seizure in Part 1, which I have already referred to.
I hope that it will be accepted throughout the House that those are appropriate uses of the powers provided in Parts 1 and 2.
§ The Earl of OnslowIf the money has been seized already, why do we need new powers to seize it? I ask that purely in the spirit of friendly curiosity.
§ Lord McIntosh of HaringeyBecause Mr Othman is trying to get the money back and we want to make sure that he cannot.
§ Lord Thomas of GresfordDo the Government intend to bring before Parliament orders dealing with 353 individuals? The machinery is that a statutory instrument should be laid before Parliament. Will that relate to one person?
§ Lord McIntosh of HaringeyI am coming to that. There is very severe parliamentary control of freezing orders. They are subject to affirmative resolution procedures. That is tough on Parliament, because there could be a number of them.
The amendments relate to Clause 4, which is the central element of the provisions that will allow the United Kingdom to take swift unilateral action to freeze terrorist assets. There will be two conditions. First, the Treasury must reasonably believe that an action threatens the United Kingdom's economy or part of it or the life or property of United Kingdom nationals and residents. Secondly, the action is to be taken by people resident outside the United Kingdom or by a foreign government.
It has been suggested that the concept of threats to the United Kingdom economy is very wide—much wider than terrorism. I am referring particularly to the amendment tabled by the noble Lord, Lord Goodhart. There are unavoidable and desirable constraints on the use of that power. Before we exercise it, we have to consider whether it is compatible with European Community obligations. It could not be used as a means of arbitrary discrimination or as a disguised restriction on the free movement of capital. International law, in particular the World Trade Organisation, would prevent the power being used as an illegitimate tool to protect UK businesses. The European Convention on Human Rights also imposes significant restrictions on the exercise of the power. We can freeze assets only when it is necessary in the general interest and where it is a proportionate interference with the rights of individuals.
The power is just one part of the sanctions regime. If a decision to impose sanctions is taken at European Community level or under a United Nations Security Council resolution, it would not be appropriate to use the power. There are safeguards in the power. As I said, the Treasury must have reasonable grounds for its belief and any freezing order is subject to affirmative resolution in both Houses. A freezing order will automatically cease to have effect two years after it is made and the Treasury has a duty to keep any freezing order under review and to consider whether a change in circumstance means that it is no longer appropriate for the order to continue in force. There are many constraints on what may seem to be a very broad power.
Amendment No. 37 is designed to restrict the power specifically to terrorism. The problem is that the power is intended to provide wide-ranging protection against threats to national security. One reason for these provisions is to counter the new risk of terrorism, but it is also important to cover such situations as wars or civil unrest affecting United Kingdom nationals and their property. The sanctions have been available for many years to counter actions that threaten UK economic interest, wherever that threat comes from.
354 I was interested in the comments of the noble Lord, Lord Goodhart, about the restrictions in the 1964 Act. I was not aware of the restriction to gold, but that Act has been used to justify sanctions against the governments and residents of Iraq and Serbia. That was widely thought to be a proper use of it. The amendment would prevent us from doing that in future. The criteria provide a clearer basis for action than simply terrorism, which allows for a more subjective interpretation.
§ Lord EltonI do not wish to be a bore on this subject, but I think that I am likely to become so. Can we establish at the beginning that this is emergency legislation directed at an emergency? When the Minister—or my noble friend Lord Renton—starts saying that it would be very useful and desirable to prevent other things happening which are not the product of the emergency, it seems to me that the parliamentary process that we are now using is not appropriate. I am merely picking up on what my noble friend Lord Onslow said a moment ago. The House generally feels that emergency legislation must restrict itself to dealing with the events of the emergency.
§ Lord McIntosh of HaringeyI did not use the phrase "very useful" but I do not dissent broadly from what the noble Lord, Lord Elton, said. If we included the word "terrorism", we would, in effect, restrict quick and urgent action that was necessary to prevent certain things that cannot be shown at an early stage of an investigation to be terrorism. That will be true for a number of aspects of Parts 2 and 3 of the Bill. We shall resist moves to restrict the powers given under the Bill on, for example, disclosure of information for criminal investigations and proceedings, which is wider than the existing provisions because at the time when it is necessary to allow such disclosure, it will not be possible to know whether such disclosure would be beneficial in dealing with terrorist threats. That is the problem throughout these parts of the Bill.
§ 6.30 p.m.
§ The Earl of OnslowThe noble Lord has made it worse. He has gone on a trawling expedition and we do not like such expeditions. Everybody accepts—some more readily than others—that there may be a need for emergency legislation, but to make it cover every action in case it leads to terrorism, brothel keeping, or whatever, is too wide. We must restrain the Government's urge to tack things on to Bills just because it would be useful or nice or because it makes our lives easier. We are dealing with terrorism, not brothel keeping.
Lord RentonBefore the noble Lord replies, I hope that it may be helpful if I point out to my noble friend Lord Onslow that not all emergencies involve terrorism.
§ Lord McIntosh of HaringeyI did not use the words—useful, nice or convenient—that the noble Earl, Lord Onslow, seems to be attributing to me. It 355 serves me right for going on to mention Part 3 of the Bill. He is tempted to a view on Part 3 that is completely wrong on the idea that one can trawl for information. However, it would be inappropriate for me to answer that point now, so I shall restrict myself to the amendments that we are discussing.
Amendment No. 37 would restrict the use of Clause 4 in a way that could be damaging to terrorist investigations. Amendments Nos. 38, 39 and 40 go in the other direction. I have already said that the measure will ensure that the powers that were originally intended for use in war time are broad enough to cover the threat of terrorist attacks. To achieve that, we need a broad and flexible power to cover a range of different circumstances. We appreciate that these are serious measures for use only in emergencies and in defence of national security. I am making that point mainly to the noble Lord, Lord Elton, and the noble Earl, Lord Onslow.
We do not think it appropriate, as Amendment No. 38 would provide, to freeze assets unilaterally in response to actions against any state other than the United Kingdom.
§ Lord Campbell-SavoursI wonder whether my noble friend can help me. On looking through the Bill, I can find no reference to timing. What would happen if the Treasury made a freezing order at the beginning of a parliamentary Recess? What will be the position if the matter has to be approved under affirmative resolution of Parliament?
§ Lord McIntosh of HaringeyAn order of that kind comes into effect immediately on being made and has to be confirmed within 28 days of parliamentary working time. Therefore, it can come into effect even during a Recess, but will fall unless it has been confirmed by affirmative resolution of both Houses within 28 days. It comes into effect immediately, which I think was the point being made.
§ Lord Campbell-SavoursIt would take some time before it secured parliamentary approval. There would be a substantial delay in the Summer Recess, for example.
§ Lord McIntosh of HaringeyNo. It would be in force, which is the important point. I think that everyone agrees that that is necessary.
I return to the point about Amendment No. 38 and states other than the United Kingdom. In those circumstances, we believe that we should implement financial sanctions if they have been agreed, for example, by the United Nations or the European Union, rather than seeking unilateral action. We are looking to limit the scope of the Bill as compared with Amendment No. 38.
§ Lord EltonI am most grateful for that emollient phrase. May I ask the noble Lord while he is on 356 Amendment No. 38 how the Bill, unamended, will affect the economies of the Channel Islands and the Isle of Man?
§ Lord McIntosh of HaringeyIt depends whether or not they are in the United Kingdom. I do not know the answer, but I shall write to the noble Lord.
§ Lord EltonThey are not, but they are very much dependent upon us.
§ Lord McIntosh of HaringeyThen the Bill does not cover them. There may be cases when we wish to freeze funds on behalf of other governments. An Order in Council is currently going through Parliament that will allow the enforcement in the United Kingdom of external forfeiture and restraint orders made in certain designated countries that will include all European Union and G7 states.
I turn to Amendment No. 40, which would change "life" to "persons". We would not wish to exercise those powers in response to less serious actions against United Kingdom nationals, such as petty theft or minor cases of assault. It would be disproportionate to freeze assets against threats to the persons of UK citizens. We believe that the current wording of "life" is appropriate to the gravity of the powers. I emphasise that the use of freezing orders must be consonant with our obligations under ECHR, Community and international law. The qualification that only unlawful or intentional actions against the UK's economic interest is unnecessary. There are extensive provisions to test that there are reasonable grounds for freezing orders through parliamentary scrutiny and appeal to an independent adjudicator through judicial review.
The clause has been approached from both sides. I adhere to the view that the balance that we have struck in the wording is the correct one.
§ Viscount GoschenBefore the noble Lord. Lord Goodhart, speaks again to his amendment, I should like to ask the Minister a question. He objected to the use of the term "involving terrorism". I agree with my noble friend Lord Onslow and the noble Lord, Lord Goodhart, that the Bill should be restricted to terrorism. I see no reference to national security. Clause 4(2)(b) refers to,
action constituting a threat to the life or property of one or more nationals",which is a very broad description and could relate to almost any crime.Does the noble Lord object to tightening up that subsection with reference being made to national security, including terrorism, or does he feel that the drafting is perfect?
§ Lord McIntosh of HaringeyThe drafting is more helpful than referring simply to national security. We have spelt out what national security means, which is helpful.
While I am on my feet, I shall deal with two points that were raised in the debate and which I have not yet answered. The first referred to the Channel Islands and 357 the Isle of Man. They are not covered in the Bill, but we are asking their governments to make their own legislation.
The noble Lord, Lord Hylton, asked about dictators. We all sympathise with the emotion behind his remarks, but the Bill is not for dealing with stolen assets or corruption funds; it is about national security. The correct vehicle for what the noble Lord, Lord Hylton, referred to is the Proceeds of Crime Bill, which includes provisions to freeze funds at the start of a police investigation. I hope that when we come to that Bill, he will raise those points in the House.
§ Lord Thomas of GresfordI was pleased to hear the Minister refer to judicial review. I sought confirmation in the debate yesterday but the Attorney-General did not have time to reply to me at that time.
I should like to make another point. The Minister described a virtual Grand National course of obligations that have to be surmounted, together with the parliamentary procedures, before a freezing order is ever made. Would it not assist in lowering the fences if it were quite clear from the wording of the Bill that it related to terrorism, as my noble friend suggested in his amendment?
§ Lord McIntosh of HaringeyNo. At the time when action had to be taken, it would not necessarily be possible to prove that terrorism was involved. That is why we seek these broader powers and constrain them in a way that I hope meets with the approval of the noble Lord, Lord Thomas.
§ Lord GoodhartThe debate has gone on longer and ranged a good deal wider than I anticipated when I moved this amendment. For example, the noble Lord, Lord Hylton, raised the question of the possible use of the clause to restrain or freeze the assets of dictators. I agree with what the Minister said in that regard.
I end by not being satisfied with the Government's response. As regards the drafting, the Minister did not attempt to dispute my interpretation; that is, that it is within the wording of the Bill as it now stands that it should cover the competitive bidding for overseas investment that I was describing. I specifically chose the example of Switzerland because I wished to choose a state which was not part of the European Union.
It is certainly unsatisfactory if we have to rely for the restriction on the extreme width of Clause 4 on international obligations, the rules of the World Trade Organisation and so forth. It would be better if on the face of the Bill some limitation could be imposed on the width of Clause 4. I entirely accept that Clause 4 is not intended to be limited to terrorism and that my amendment is therefore inappropriate. But that gives rise to the wider problem raised by the noble Lord, Lord Elton, and the noble Earl, Lord Onslow, and it again discloses a problem dealt with by many speakers yesterday, including myself. This is a wholly inappropriate use of emergency legislation because it goes well beyond the emergency.
358 Having said that, I cannot redraft the legislation for the Government. It is unsatisfactory. Nevertheless, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 38 to 40 not moved.]
§ Clause 4 agreed to.
§ Clause 5 [Contents of Order]:
§ [Amendment No. 41 not moved.]
§ Clause 5 agreed to.
§ Clause 6 agreed to.
§ 6.45 p.m.
§ Schedule 3 [Freezing orders]:
§
Lord Kingsland moved Amendment No. 42:
Page 97, line 37, after "is" insert "reasonably
§
The noble Lord said: Amendment No. 42 provides that disclosure to the Treasury under that part of the Bill should take place,
as soon as is reasonably practicable".
§
As currently drafted, the Bill states that a freezing order can require disclosure to the Treasury of relevant information as soon as is practicable after the information is received. However, there may be situations in which a person cannot make the disclosure, for good reason, as soon as would otherwise have been practical. To reflect those situations we suggest that provision is made for such disclosure to be made,
as soon as is reasonably practicable".
§ A similar sentiment lies behind Amendments Nos. 46 and 47, the first in relation to Clause 11(1)(c) and the second in relation to Clause 11(2)(c). I beg to move.
§ Lord MonsonPerhaps I may point out that there is a drafting defect in both Amendments Nos. 46 and 47, no doubt understandably in view of the haste with which the amendments had to be tabled. The definite article has been omitted in front of the word "Treasury" and it does not read quite right without the word "the" in front of it.
§ Lord McIntosh of HaringeyIt may be helpful if I say that we understand that these amendments are intended to make it explicit on the face of the Bill that any amendment to a freezing order as well as the making of the order is based on the Treasury's reasonable belief that the relevant conditions are met. We agree with that principle.
Our view is that that is the effect of the current drafting reads in accordance with the Interpretation Act 1978. However, we agree that the Bill should expressly provide that in making changes to freezing orders the Treasury must have a belief, as well as stating that it has a belief, that the relevant conditions are met, and that that belief should be reasonable. We shall table amendments on Report to meet that point.
§ Lord KingslandI am grateful to the Minister for that undertaking. In those circumstances it is proper for me to beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Schedule 3 agreed to.
§ Clause 7 [Review of order]:
§
Lord Kingsland moved Amendment No. 43:
Page 4, line 5, at end insert "and must revoke such freezing order if it ceases to have reasonable grounds to consider that the conditions set out in section 4 are fulfilled
§ The noble Lord said: In moving Amendment No. 43 I shall speak also to Amendments Nos. 44 and 45.
§ However necessary may be the powers to freeze funds on the say-so of the Government, those powers are draconian and require protection against executive abuse. Just as a power must be exercised only if certain conditions, as set out in Clause 4(2), are fulfilled, so the order should be revoked as soon as the conditions cease to be fulfilled.
§ There appears to be no protection in the Bill as drafted against the Treasury letting a freezing order run for the full two years, even if the reasons for it have fallen away. Amendment No. 43 requires the Treasury to lift the order when the conditions are no longer fulfilled. So the "victim" of the order if—I may use that expression—has some legal recourse if the Treasury fails to so act.
§ I turn to Amendment No. 44. There appears to be no provision in the Bill as drafted to allow for the renewal of a freezing order at the end of the initial period of two years. That might have the bizarre effect that the Treasury was forced, as a pure matter of timing, to release funds when it had reasonable grounds to suppose the funds would immediately be used to launch a terrorist attack. It is even more bizarre to allow detention indefinitely, without trial, but impose a time limit in the much less important context of money.
§ Although we would not normally argue for a swingeing measure, such as a freezing order, to be strengthened, we are prepared to accept that, in the context of terrorism and London's pivotal position as a financial centre, there may be a strong case for renewal in some circumstances—provided there is the possibility of recourse to the courts as proposed in our amendment to line 5. Amendment No. 44 is designed to achieve that.
§ Finally, I turn to Amendment No. 45. A freezing order prohibits all those in the United Kingdom, and United Kingdom nationals elsewhere, from making funds available to or for the benefit of specific persons named or described in the freezing order. If such a person acts in breach of a freezing order he can be sent to prison for two years.
§ At the very least, there should be some convenient means by which the existence of the freezing order is brought to the attention of the criminal party. It is hardly fair that the Treasury can make a freezing order, which carries with it criminal sanctions, and not publish it in some way so that innocent people do not inadvertently become criminal.
360§ Such publication can be achieved relatively easily by simply inserting the appropriate notice in the Gazette. It is our understanding, or at least our hope, that many banks regularly read the Gazette to check winding up petitions which have the effect of freezing a company's assets. That is, or should be, an established practice in the banking community. If the list of freezing orders are then published, either before or after the list of outstanding petitions, those responsible for checking such a list will be able to look at the list of freezing orders as well.
§ This is an important point because the whole purpose of a freezing order is to freeze money and not to catch innocent people unawares and send them to prison. The aim is to freeze the cash and that is achieved if the freezing orders are brought to the attention of those who hold the cash. I beg to move.
Lord RentonI believe that the Government would welcome the amendments to which my noble friend has just spoken. Clause 7 as it stands is unusual. It merely says,
The Treasury must keep a freezing order under review".But these amendments would enable the Government, when reviewing a freezing order, to take various forms of action which could well be necessary in the circumstances. I would hope therefore that the Government will say, "Yes, this will enable us to fulfil our intentions much better". In other words, these amendments are not only in the Government's interest but also in the national interest.
§ Lord McIntosh of HaringeyI would have thought that the noble Lord, Lord Renton, would approve of the taciturnity and precision of Clauses 7 and 8. The noble Lord, Lord Kingsland, might have called there "telegraphic". I believe that they are absolutely clear and admirably short.
Before I deal with them perhaps I may say something about my response to Amendments Nos. 46 and 47. I said that we would introduce amendments at Report stage to cover these points. I did mean Amendments Nos. 46 and 47 rather than Amendment No. 42, which is a separate issue.
Clauses 7 and 8 represent wonderful drafting. They underline the emergency nature of the provisions. They provide for an ongoing review of all freezing orders. They set a maximum period of two years after which freezing orders will cease to come into effect. As regards Amendment No. 43, we do not need to specify in that context that the Treasury must revoke an order when the condition under which it was made is no longer fulfilled. That is clearly the intention underlying Clause 7. As part of our obligation to review we pay careful attention to any change in circumstances There is no point in having a review unless one is prepared to revoke.
However, an explicit provision could impair the effectiveness of the power if the circumstances which led to an order changed but it was still appropriate to have an order in place. As regards Amendment No. 44, I do not see any benefit in it. If the order needs to be 361 continued it should be made again subject to affirmative resolution in Parliament. That is for the protection of Parliament. The Treasury would make it clear in such debates that it was replacing an order that had expired. These are serious powers and they should be subject to parliamentary scrutiny.
As regards Amendment No. 45, we are dealing with statutory instruments. They are public documents made freely available as soon as they are laid, including on the HMSO website. As the targets will be primarily abroad, publication in the Gazette would be unlikely to bring the order to their attention. As a matter of practice the Bank of England does publicise these orders among financial institutions.
As regards banks being liable to criminal penalties, paragraph 7(5) of Schedule 3 provides a defence for those who do not know that the person to whom they have made funds available was the person specified in the order.
§ Viscount GoschenBefore my noble friend responds to the Minister's comments, can the Minister explain what he understands to be the use of Clause 7 as it stands in the Bill? It states that the Treasury must keep an order under review. What does that mean? It is not specified unless that appears somewhere else in the Bill and I do not know about it. Exactly what review process has to be gone through? Would it be open to challenge? Just to state that the order must be kept under review reflects the kind of wording that Government Ministers use from time to time about policies on which they have yet to make decisions. The current wording is meaningless on its own.
§ Lord McIntosh of HaringeyThe noble Viscount, Lord Goschen, does not like plain English either. The clause means what it says. The matter has to be kept under review. If there are changed circumstances which mean that the order should be revoked, that will be done. What the Treasury cannot do, according to Clause 7, is simply to make an order and forget it. This clause is entirely desirable as well as being clear.
§ Lord KingslandI thank the Minister for his reply. As regards Amendment No. 43, the noble Lord said that an explicit provision of the sort contained in that amendment would impair the effectiveness of the power. I find it hard to see how that can be so. If the noble Lord has no other complaint than that against the amendment, then surely including it on the face of the Bill would be wholly advantageous.
§ Lord McIntosh of HaringeyThere could be a wide range of conditions set out in Section 4. It could be that some of them have changed as the amendment provides and the order must be revoked. Surely that cannot be right. One must admit the possibility that under changed conditions, which have been identified in the review, it would not be appropriate for the order to be revoked.
§ Lord KingslandI am most grateful to the Minister for that further clarification. But the amendment says,
if it ceases to have reasonable grounds to consider the conditions set out in section 4 are fulfilled".If the Treasury ceases to have reasonable grounds, in those circumstances, it is hard to imagine any conclusion that the Treasury could reach other than revocation. Perhaps the noble Lord would like to reflect further on this clause before he returns to your Lordships' House at Report stage.
§ Lord McIntosh of HaringeyI am glad to do that. I always reflect on these matters.
§ Lord KingslandI am most grateful to the Minister. I am also grateful to the noble Lord for his response to Amendment No. 45. I am not quite sure what conclusions I should draw from what the Minister said. Is he accepting my amendment by saying that it is unnecessary or is he accepting it by saying that he is going to add it to the Bill? This is the amendment regarding the Gazette.
§ Lord McIntosh of HaringeyNo, certainly not. It would be inappropriate use of the Gazette. The statutory instruments are published and the Bank of England provides all banks with a summary. It is quite unnecessary and an inappropriate use of the Gazette.
§ Lord KingslandI thank the noble Lord for that clarification. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 7 agreed to.
§ Clause 8 [Duration of Order]:
§ [Amendment No. 44 not moved.]
§ Clause 8 agreed to.
§ [Amendment No. 45 not moved.]
§ Clauses 9 and 10 agreed to.
§ Clause 11 [Procedure for making certain amending orders]:
§ [Amendments Nos. 46 and 47 not moved.]
§ Clause 11 agreed to.
§ Clause 12 agreed to.
§ Clause 13 [De-hybridisation]:
§ On Question, Whether Clause 13 shall stand part of the Bill?
§ 7 p.m.
§ Lord Phillips of SudburyThis is an error. The Question should be whether Clause 17 stand part of the Bill. Clause 13 concerns de-hybridisation. I have raised the matter with the learned Clerk and, with the leave of the Committee, the Question whether Clause 17 stand part of the Bill should be dealt with in the right place, which is at the end of the amendments to Clause 17.
§ Clause 13 agreed to.
§ Clauses 14 to 16 agreed to.
363§ Clause 17 [Extension of existing disclosure powers]:
§
Lord Goodhart moved Amendment No. 48:
Page 7, line 6, at beginning insert "Subject to subsection (2A),
§ The noble Lord said: In moving Amendment No. 48, I wish to speak also to Amendments Nos. 59, 70 and 81. These all raise the issue of the privilege against self-incrimination. Part 3 deals with the disclosure of information. Clause 17 extends many existing powers of disclosure to cover disclosure for the purposes of criminal investigations or criminal proceedings. Clause 19 concerns disclosure of information held by the Inland Revenue or Customs and Excise.
§ I shall confine my remarks to Clause 17 but they apply also to Clause 19. Clause 17 applies to the provisions in Schedule 4, which contains a list of 53 statutes and a number of Northern Ireland orders, under which information is required by government departments or public authorities. That information is now to be used not only for the purposes for which it was originally required under the 53 statutes but also for the purposes of criminal investigations and criminal proceedings.
§ A large number of those statutes—I have not attempted to go through all of them, but those I have looked at make the position quite clear—require people in the private sector, individuals or companies, to provide, under statutory direction, information on certain subjects. If that information is to be used for the purposes of criminal proceedings against the persons who provided that information, the question arises whether that is a breach of the privilege against self-incrimination which has been held to be part of Article 6 of the European Convention on Human Rights.
§ I admit that to some extent the law on that point is in a somewhat uncertain state. Some years ago we had the decision of the European Court of Human Rights in the case of Ernest Saunders. Mr Saunders had in the course of the investigation of the Guinness share pushing deal been required to give evidence to inspectors under the companies legislation. It was a statutory requirement that he should give that evidence. The evidence that he gave was then used against him in the criminal trial. Subsequently, it was held by the European Court of Human Rights that there was a breach of his rights under Article 6.
§ In the other direction we have the decision of the Privy Council in the case in Scotland, the name of which. I believe, was Brown, in which a woman was required to state whether or not she was driving a car at a particular time as that information was relevant to criminal proceedings against her. It was held that the request to give that information was not a breach of her rights under Article 6. Therefore, it is not clear what the position is. I raise the provision largely as a probing amendment to find out whether the Government recognise that some of these obligations under Clause 17, and perhaps also under Clause 19, may breach the privilege against self-incrimination. If that is the case, how do the Government propose to deal with that, or do they simply intend to leave the matter at large and 364 allow the courts, when looking at any particular case, to decide whether there is a breach of the privilege against self-incrimination? I beg to move.
§ Lord McIntosh of HaringeyStrictly speaking. I ought to confine myself to the amendments which concern the use to which information can be put by prosecutors, which is not the subject of this part of the Bill at all. This part of the Bill deals only with disclosure. However, the noble Lord, Lord Goodhart, made a perfectly legitimate point to which one ought to respond. Before I discuss the issue of self-incrimination, I should say that the extension here does not concern criminal proceedings. Disclosure provisions already exist in regard to criminal proceedings. The extension here concerns criminal investigations. Therefore, it is less of an extension than the noble Lord indicated.
Let me make it clear that we are not changing the ways in which information can be used; we are simply widening the gateways from prosecutions to investigations. The specific answer to the noble Lord's question is that some of the Acts listed in Schedule 4 already contain provisions that prevent information obtained through compulsory powers being used as evidence against the person who provided it. Those restrictions on use will continue to hold good for information disclosable under Part 3. The noble Lord mentioned the Saunders case. Some of the provisions for information disclosable under statutory powers came into conflict with that case and some of the Acts referred to in Schedule 4 have been amended accordingly. As I say, those restrictions on use will continue to hold good for information disclosable under Part 3.
In addition to the restrictions on use that may already be contained in the enactments listed in Schedule 4, which will still apply, any public authority prosecuting a criminal offence and any court considering the matter would have to consider the Human Rights Act and the Saunders and Brown cases to which the noble Lord, Lord Goodhart, referred.
§ Baroness Carnegy of LourIs the Minister able to say whether the Government accept the recommendation of the secondary legislation committee that the order referred to in subsection (3) of Clause 17 should be subject to affirmative procedure, or has that not yet been decided?
§ Lord McIntosh of HaringeyThat point will be dealt with in consideration of a later amendment. In order to curtail debate, I shall say in advance that we shall accept the recommendation of the Delegated Powers and Regulatory Reform Committee.
§ Lord GoodhartI am grateful to the Minister. It is clear that the Government have given some consideration to the possible self-incrimination aspects. In the circumstances, I believe that broadly my inquiries have been answered satisfactorily. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
365
§
Lord Phillips of Sudbury moved Amendment No. 48A:
Page 7, line 7, after "authority" insert "to another public authority".
§ The noble Lord said: This, too, is a probing amendment. I hope that it will be of use to the Committee in consideration of this complex Bill. Late last night, when grappling with the wording of Clause 17(2), it seemed to me that the scope of disclosure permitted by that clause may be wider than most of us understand or, indeed, than the Government intend. It is wide enough in authorising disclosure by or on behalf of a public authority, given of course that "public authority" is defined by reference to the Human Rights Act.
§ Therefore, public authorities do not include only governmental departments, governmental bodies and statutory bodies but what are known as "hybrid" public bodies. That term extends to organisations such as the Law Society, the Bar Council, the General Medical Council, a doctor or healthcare worker working within the NHS, a privatised company running a school or a prison, Railtrack and the Press Complaints Commission. It is a massive extension of disclosure prospects.
§ The point of the amendment is to confine the right to disclose to all the bodies concerned in accordance with the 66 scheduled pieces of legislation, to other public bodies or, as I have expressed it, to another public authority. As the clause stands, I cannot see any reason for wondering whether or not the disclosure is also to be allowed to an individual who comes within paragraphs (a), (b), (c) or (d) of Clause 17(2); that is, an individual bringing a private prosecution, contemplating bringing a private prosecution or contemplating investigating a private prosecution, as covered in paragraph (d).
§ There, of course, we enter a very deep and broad sea. One is dealing with the prospect of an individual bringing criminal libel proceedings, which very often are highly personal and acrimonious. One thinks of cases such as that of the late lamented Jimmy Goldsmith against Private Eye. One thinks also of criminal damage prosecutions, of rape or attempted rape prosecutions, of theft or attempted theft prosecutions, perjury prosecutions and a host of others.
§ It will be no answer to the huge range of private activities that fall within paragraphs (a), (b), (c) or (d) to say that some of them require the fiat of the Attorney-General before the prosecution can take place. Of course, paragraphs (a), (c) and (d) of subsection (2) extend to activities prior to the commencement of the prosecution. Only the commencement of the prosecution requires the consent of the Attorney-General in a few cases.
§ Therefore, as I said, the amendment is designed to prevent the clause extending to that whole range of cases. It would also prevent an unfairness in that, if, indeed, private prosecutions were within the scope of this clause, there would be a serious inequality of arms because the defendant in those private prosecutions 366 would not have the same rights of access to disclosed information as the prosecuting individual. On those grounds, I beg to move.
§ 7.15 p.m.
§ Lord McIntosh of HaringeyI can reassure the noble Lord, Lord Phillips, to some extent, but I do not believe that I shall be able to do so completely. The extent to which I can reassure him is that, as the Bill is drafted, a defendant in a private or public prosecution is included as a person to whom information can be disclosed. But he would not be included if the amendment were carried. Therefore, the amendment would work in the opposite direction to the sense in which the noble Lord, Lord Phillips, wants it to work.
The provisions permit disclosure only for purposes connected with criminal proceedings or criminal investigations. That is a very great restriction on the wide range of examples that the noble Lord, Lord Phillips, gave in introducing the amendment. However, it is true that private prosecutions would be included, as would, for example, the private prosecution of those accused of the murder of Stephen Lawrence. Is that so terrible? I am not sure that I agree that it is.
§ The Earl of OnslowIn the context of this Bill, yes, it is terrible. We are dealing with terrorism, terrorism and terrorism. We are not dealing with the murder of Stephen Lawrence; we are not dealing with brothel keeping; and we are not dealing with parking on a double yellow line. We want to confine the Bill to what the Government say it is about. Many of us have made that complaint. Yesterday, I and many other noble Lords around the House made that very complaint. We must confine the Government. No one is saying that they should not have these powers if they want them; but they must get them by proper legislation and proper means. That is the complaint that runs through the whole core of this argument.
§ Lord McIntosh of HaringeyI appreciate the force with which the noble Earl, Lord Onslow, makes his point, and I appreciate that it was made by a number of other people. From that point of view, perhaps my example was unfortunate, just as the examples given by the noble Lord, Lord Phillips, of criminal libel and criminal damage could be considered to be unfortunate in the other direction. Therefore, the extent to which I cannot satisfy the noble Lord, Lord Phillips, is by saying that we acknowledge that the Bill permits disclosure to those involved, whether or not they are public authorities, in criminal investigations and proceedings.
As the noble Earl, Lord Onslow, has widened the discussion, perhaps this is an appropriate moment for me to say something about Clause 17 as a whole. I believe that it is enormously important.
§ Lord Phillips of SudburyI thank the Minister for giving way. Would it be better if I responded to my amendment before he launched into a general statement? It is entirely up to the Minister.
§ Lord McIntosh of HaringeyIt is up to the Committee. But I have something to say about Clause 17 which affects all the amendments to that clause. If it were for the convenience of the Committee, I should like to find an opportunity to say it. However, I am in the hands of the Committee.
§ Lord Phillips of SudburyI believe that that is enormously helpful. However, it may finalise the discussion on this amendment if I were to respond to what the Minister said and then leave him free to make his general remarks.
§ Lord McIntosh of HaringeyI shall not make general remarks except on an amendment. Shall I simply do it?
§ Lord McIntosh of HaringeyThere has been much misrepresentation in relation to Clause 17. Therefore, I want to say that these gateways—the provisions for information disclosure—in Schedule 4 all exist. They have all been approved by Parliament. There are no new gateways. They refer to information of specific types which are covered by existing statutory restrictions on disclosure, and they are restricted to information collected under statutory powers.
The duties under the Human Rights Act and the Data Protection Act still apply to all disclosures. Disclosures must be proportionate, necessary and lawful. Only public officials will be able to disclose, and only in their capacity as public officials. That means that something arising in the pub will not count. I have read that the provision will allow access to information from doctors or bank managers, but they are not public officials, and health records and bank records are not covered by the provisions. We are simply widening each of the gateways to ensure that disclosure is permitted if all other safeguards are satisfied for criminal proceedings, as now, to investigations and to determine whether an investigation should begin.
There is no question of public officials being obliged to make disclosures. It is up to them to decide whether to do so. There is certainly no question of the police or anyone else trawling records. There will be no investigatory access to the records covered by the Acts in Schedule 4. Public officials will have to determine on a case-by-case basis whether they may disclose the information.
Those are huge changes since the Criminal Justice and Police Bill was before Parliament before the election. I hope that our discussion of Clause 17 will be informed by my comments.
§ Lord Phillips of SudburyThat is a most irregular response to a specific amendment. Many people will be astonished to know that Clause 17 covers not only individuals bringing private prosecutions—I enumerated some of them—but also that disclosure vis-à-vis private and public prosecutions will extend to the accused. That goes far beyond the expectations that any of us had.
368 I turn to what Jack Straw said on the matter in the other place during the passage of the Criminal Justice and Police Bill in January this year. He described the provisions as allowing a,
reciprocal flow of information between those bodies, the police and the National Criminal Intelligence Service".—[Official Report, Commons, 29/1/01; col. 41.]Gordon Brown commented in the other place on the provisions as recently as 15th October, which was, of course, before the Bill's publication. He said that the provisions would allow official bodies, particularly the Inland Revenue, to exchange information with other bodies in fighting the financing of terrorism.There has been a unanimous response to the measure, from Liberty, Justice, the Law Society, the Bar Council, Uncle Torn Cobbleigh and all. The provision is drafted in the widest possible terms as regards the categories, particularly category (d). We shall later come to an amendment dealing with that. We have now heard not only that public authorities include hybrid bodies that are not public at all in the common sense of the word but that they will allow any person bringing any private prosecution to have access to disclosure under Clause 17, and any person accused by a private citizen bringing a private prosecution or by any state, body, police or prosecuting authority.
§ Lord McIntosh of HaringeyI do not claim that the noble Lord and I are of one mind on this matter. There is a difference between us, and I do not want to restrain him from taking any action that he thinks it necessary to take. However, there are important limits—they will limit the circumstances in which information can be disclosed to a person who is not a public authority.
The Human Rights Act will apply to every disclosure that takes place under the provisions. In particular, disclosure will he possible only when it is compatible with Article 8—the right to privacy. Obviously, that limits the circumstances in which the public authority itself can disclose information. However, there are circumstances in which a public authority will be subject to a duty to ensure that it does not breach Article 8 and that it does not enable anyone else to do so. In other words, when a public authority is considering whether or not to disclose, it will have to consider what the person to whom he proposes to disclose the information will do with it. In some cases, it will be appropriate for the public authority to disclose, subject to certain conditions, which would prevent onward disclosure. I hope that that helps the noble Lord, at least in part.
§ Lord Phillips of SudburyI am grateful to the Minister—he made that point in an earlier speech. It is of little consolation, but we shall discuss that in relation to later amendments. However, I shall not prolong the discussion of this amendment. I shall, if I may, raise the issues later. I suggest to the Minister that he reviews what he said in the light of the amendment and takes counsel about whether the Government 369 really intend the gateway to be not a gateway but a huge hole in relation to the confidentiality of information. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
§ Lord McIntosh of HaringeyI beg to move that the House do now resume. In moving that Motion, I suggest that the Committee should meet again not before 8.25 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.