Immigration (Designation of Travel Bans) (Amendment) Order 2011

Tuesday 10th May 2011 Grand Committee

Considered in Grand Committee

15:30

Moved by

[Lord Hunt of Kings Heath]

That the Grand Committee do report to the House that it has considered the Immigration (Designation of Travel Bans) (Amendment) Order 2011 (SI 2011/547).

Relevant document: 24th Report from the Merits Committee.

[Lord Hunt of Kings Heath]

My Lords, I shall also speak to the Libya (Asset-Freezing) Regulations 2011. Both instruments were drawn to the special attention of the House by the Merits Select Committee, to which I am grateful for its assiduous attention to Home Office statutory instruments.

The Immigration (Designation of Travel Bans) (Amendment) Order 2011, otherwise known as the travel bans order, adds UN Security Council Resolution 1970, issued on 26 February 2011 in response to the situation in Libya, to Part 1 of the schedule to the Immigration (Designation of Travel Bans) Order 2000. The effect of the amendment is to impose travel bans on Muammur Gaddafi, his family and certain Libyan government officials. The helpful Explanatory Memorandum accompanying the SI says that the travel bans order thereby implements the UK’s obligations under the UN resolution.

On 28 February, the Government also laid before Parliament the Libya (Financial Sanctions) Order 2011. The Explanatory Memorandum says that the financial sanctions order implements in the UK the asset-freezing measures in the UN resolution and prohibits any dealing with the funds and economic resources of certain individuals and entities, and making available funds or economic resources to or for the benefit of those persons. The financial sanctions order came into force on 27 February and was accompanied by a letter to the Lord Speaker. Although the financial sanctions order is required to be laid before both Houses of Parliament under the United Nations Act 1946, it is not subject to parliamentary procedure.

The two instruments need to be considered in the context of two other orders, the Export Control (Amendment) Order 2011 and the Export Control (Amendment) (No. 2) Order 2011. The Export Control (Amendment) Order 2011 introduces a new control on the export of uncirculated Libyan bank notes. The Export Control (Amendment) (No. 2) Order revokes the original order and embraces unused Libyan coins as well as unused bank notes. Taken together, these four instruments form a legislative response to the situation in Libya, much of which follows the international response to developments in that country.

I want to make it clear that I do not seek to oppose these instruments; indeed, I support them. However, I thought that it would be useful, and a service to the Committee, if the Minister was in a position to provide further information on the implementation of the instruments. The travel bans order came into effect on 28 February 2011 and the Libya (Asset-Freezing) Regulations came into force on 3 March. I would be very grateful to the noble Earl, Lord Attlee, if he could say how implementation of the instruments has proceeded so far and whether any particular problems have been experienced. I would also be grateful to him if he could say whether other countries are likely to be affected by similar action, given the events that we are seeing in a number of countries in the vicinity of Libya, about which there is great concern. I note that the asset-freezing regulations apply to small businesses. Can the noble Earl tell me how many such businesses might be affected? Perhaps he can also say whether any further action is contemplated against Libya in this area.

Overall, I have prayed against these statutory instruments because they have been drawn to the special attention of the House and there ought to be an opportunity to allow the House to debate these matters. As I have said to the Committee, I do not object at all to what is in the statutory instruments, but it would be good to know what progress has been made. I beg to move.

[Baroness Falkner of Margravine]

My Lords, I thank the noble Lord, Lord Hunt of Kings Heath, for giving us an opportunity to exercise our scrutiny function rather better by putting some very apposite and relevant questions on the table about the statutory instruments. We Liberal Democrats welcome the imposition of a travel ban on Muammur Gaddafi and his family and certain other Libyan government officials, which has allowed the implementation of the UK’s obligations under the UN Security Council resolutions in response to the situation in Libya.

I, like the noble Lord, Lord Hunt, am concerned about the practical implication of the implementation of these statutory instruments. We undoubtedly agree that we must guarantee that the excluded persons watch-list, which will be used both by staff overseas and at UK ports, identifies accurately people who are not to be admitted to the UK, and I hope that any individual who is subject to the ban and who entered the UK by deception, and so is in breach of the travel ban, will be identified and treated as an illegal entrant and will be subject to appropriate action before the jurisdiction of the International Criminal Court, if that applies. I say that advisedly because, having looked at the list of people who are covered by the United Nations travel ban, and given that the International Criminal Court’s criminal prosecutor is expected to make an announcement in September, the months leading up to then will be when these people will attempt to flee to safe havens if they choose to do so.

I am concerned to read that the ban could also be lifted in very limited circumstances, and I wonder whether the noble Lord the Minister will tell us in what circumstances the ban could be lifted here in the UK and what procedures we would go through for it to be lifted. I also wonder whether there has been any record of an individual who is as yet subject to the travel ban and who has been arrested in the UK or who is known to have connections to the UK and might already be here.

On the asset-freezing regulations, I thank, through the Minister, his noble friend Lord Green of Hurstpierpoint for his extensive response to me, in a letter dated 1 April 2011, on the travel order. It clarified a lot of my questions about how the asset-freezing regulations would be implemented in the UK. I am further pleased to note that the UK asset freezes will not be limited to assets that are held only in the name of Muammur Gaddafi, that there are several other designated individuals and that the list continues to be updated.

The issue for me is the extent to which Libyan state entities, or entities that have links to the Libyan state but that might not be official state entities, should be regarded as directly or indirectly owned or controlled by the Gaddafi family acting on behalf of, or on the direction of, members of the Gaddafi family. I know that the Treasury has issued guidance that the financial sector and other persons should bear in mind that Muammur Gaddafi and his family have considerable control over the Libyan state and its enterprises in deciding how to conduct proper due diligence over any transaction that involves Libyan state assets. Although we welcome the guidance, I have to say to the Treasury—I have raised this previously—that it seems to us that UK financial institutions are not really clear as to how to deal with freezing the assets of individuals rather than of readily identifiable state organisations or commercial enterprises. That issue has gone on over the years and I would like to record some concern that Treasury guidance does not seem to be more specific. You speak to people in the banks who tell you that they have very limited means of identifying individuals because the money is laundered in so many different ways before it arrives here. Perhaps we need to invest, through HMRC or some other body—I cannot identify the body—a little more in clearer intelligence about all those front organisations that use the City of London and other European centres to launder assets.

I conclude by saying that it is important to know that those sanctions and regimes differ from one another and from a US sanctions regime, and that people who are involved in moving their assets around, particularly when there are these sorts of asset freezes, are capable of hiring smart white-collar advisers to tell them how to buck the rules in one regime to another. I hope that here in the UK, not least to safeguard our reputation on money laundering, the Government ensure that companies monitor the position and keep abreast of new legislation, new designations and potentially new licences.

[Earl Attlee]

My Lords, I am very grateful that the noble Lord, Lord Hunt, has asked the Committee to consider the travel ban amendment order and the Libya (Asset-Freezing) Regulations that were laid in February. Normally such technical measures attract little comment, but as the noble Lord says, they concern important matters of public policy. It is therefore only right that the Committee has the opportunity to learn more about the scope and purpose of such amendments and instruments and to question the Government about the circumstances that give rise to them.

These instruments are part of the Government’s wider strategy to put pressure on the Gaddafi regime through the full implementation of the relevant UN Security Council resolutions and EU instruments. Noble Lords were able to explore something of this wider strategy on 26 April when my noble friend Lord Howell of Guildford repeated the Statement made in another place by my right honourable friend the Foreign Secretary. I have no doubt, given the fast moving and appalling events unfolding in north Africa and in the Middle East, that there will be many such further opportunities to question the Government about our country’s response. I am therefore sure that noble Lords will understand if I say that on this occasion I intend to focus on the subject of the noble Lord’s Motion rather than on the wider strategy. I should also point out that yesterday the EU imposed sanctions on 13 Syrian officials, although I am not yet fully briefed on those sanctions. However, the Government will make similar UK orders using the same methodology as the Libyan regulations.

Noble Lords will be aware that UN Security Council Resolution 1970 was issued on 26 February as the international community’s response to the gross and systemic violation of human rights and international humanitarian law in Libya and the crimes that were and still are being perpetrated by Gaddafi and his supporters on his own population. The resolution placed a number of obligations on UN member states. Two of these—on travel bans and asset freezing—resulted in the implementing measures that were laid before the House in February and which the noble Lord, Lord Hunt, has brought to the attention of the Committee. Before saying something about these measures, noble Lords may be aware that they were the first of several travel ban and asset-freezing instruments that have come into force since the end of February in response to events in Libya. There have been a total of three travel ban amendment orders.

Taking the measures listed in the noble Lord’s Motion in turn, I shall first address the travel ban order. When travel bans are imposed on particular named individuals as part of a UN Security Council resolution or EU Council instrument, the UK is obliged, except in very limited circumstances, to refuse these individuals entry to or transit through the UK. There are a number of ways of achieving this. The most effective way is for the Government to add the resolution to the schedule of the Immigration (Designation of Travel Bans) Order 2000. That is done by means of an amendment order.

15:45

As any number of UN resolutions and instruments of the Council of the European Union are issued during a year, the Government’s normal practice is to incorporate them in a single amendment order laid in November. I assure noble Lords that steps can be taken to prevent those subject to UN and EU travel bans from entering the UK before such an order is laid in November. In the absence of such an order, bans are enforced by using immigration powers on a case-by-case basis. The Government normally allow a three-week opportunity for comment before the order comes into force, but once in force, the individuals named in the UN and EU resolutions and instruments automatically become what is termed “an excluded person”. Section 8B of the Immigration Act 1971 specifies:

“An excluded person must be refused … leave to enter the United Kingdom … leave to remain in the United Kingdom”.

It also provides that any exemption that an individual may have had from immigration control, normally as a member of a foreign Government or diplomat falls automatically. That enables us to deny such individuals entry to the UK.

At this point I should clarify why the Government considered it necessary to lay the amendment order on a Sunday, the day after the UN resolution giving rise to it, and did not follow the parliamentary convention of allowing three weeks for comment before bringing the order into force. The timescale resulted entirely from the need to implement the travel ban measures immediately and put us in the position of being able to refuse entry immediately to any member of the Gaddafi regime attempting to seek entry to the UK. I assure the Committee that in departing from their normal practice the Government intend no discourtesy to your Lordships.

Noble Lords may also wish to be informed of exemptions to the travel ban that could potentially allow those subject to it to come to the UK. There are a number of ways in which this is possible in principle. Both the UN Security Council and the EU Council instruments set out possible exemptions. Whether or not they apply to the circumstances of a particular individual is a matter normally decided by the relevant UN or EU committees on the basis of an application made by the member state where entry is sought. The circumstances specified in the UN resolution, for example, are grounds of humanitarian need, including religious obligation where entry or transit is necessary for the fulfilment of a judicial process and where the objectives of peace and national reconciliation in Libya and stability in the region would be furthered. These exemptions are narrowly drawn so as not to undermine the effectiveness of the travel ban regime.

Turning to asset freezing, on 26 February the UN Security Council adopted resolution 1970 imposing an asset freeze against Colonel Gaddafi and five other Gaddafi family members, and against entities owned or controlled by them. The UK gave effect to this asset freeze immediately through an Order in Council to the United Nations Act 1946. On 2 March the EU adopted Council regulation 204/2011 implementing the UN asset freezes throughout the EU. European Union regulations have a direct effect in national law. However, states are required to ensure that domestic measures are in place for enforcing EU regulations. The Libya (Asset-Freezing) Regulations 2011, which we are discussing today, were laid and came into force on 3 March. They provide effective, dissuasive and proportionate penalties for enforcing the EU regulation.

The Government are committed to ensuring that assets are not misappropriated by the Gaddafi regime or used by them against the interests of the Libyan people. The robust and timely measures that we have taken, including the regulations that we are debating today, have helped to prevent the misuse of Libyan assets. I hope that noble Lords will welcome these measures, and I believe that they do.

The co-ordinated international effort has meant that the regime no longer has access to frozen overseas funds, including funds in excess of £12 billion in the UK alone. This prevents the regime from misusing these funds and protects them for the benefit of the Libyan people, which is a very important point. The UN sanctions against the Libyan national oil company have also helped to prevent the regime from misusing oil revenues against the interests of the Libyan people. The chair’s conclusion at the second meeting of the contact group on Libya in Rome on 5 May stated:

“The Contact Group called for a halt to any form of supply, in particular oil and refined products, which could contribute to Qadhafi’s attacks against the Libyan people”.

I accept that the difficulty with oil supplies is determining whether they are going to be used against the interests of the Libyan people or have humanitarian benefit, such as fuelling a hospital.

Last week, at the direction of the Prime Minister, the national security adviser directed the establishment of a small team with the objective of taking an overview on all oil issues relating to Libya. The team, which is FCO-based, is acting as a cross-Whitehall group, drawing on expertise as required. A variety of measures and activities are being employed or considered to achieve the objective outlined above. Open-source information indicates that there is already a shortage of fuel among the civilian population in Gaddafi-controlled Libya.

The Government are also committed to ensuring that the asset freezes are implemented proportionately so as to avoid disproportionate impacts on business. In line with other countries, the Treasury has issued a number of exemptions to licences to allow transactions specified in the licences to be carried out. It is a condition of all such licences that no funds or economic resource can be made available to or for the benefit of persons designated by the UN or the EU. I hope that noble Lords will welcome the Government’s approach in ensuring a robust but proportionate implementation of these important obligations.

My noble friend asked how individuals are dealt with under sanctions. The asset freezes apply in the UK, so assets held by those named individuals are frozen. Licences can be issued to allow access to these funds in specific circumstances and HM Treasury will issue such licences only where it is satisfied that there is no risk that the named person would benefit from the transaction. She also asked about lifting the travel ban. There must be evidence that an individual no longer meets the criteria for listing. They must then gain political agreement for delisting, which should be done either with the UN member state or the EU member state, depending on whether the individual is subject to an EU or a UN measure. Once there is agreement, the legal text will be updated and the delisting adopted.

The noble Lord, Lord Hunt, asked an important question about the impact on business. It would be helpful if I describe the situation in some detail since we are not short of time. The Government recognise that sanctions, especially on this scale, have an impact on business. This is unavoidable, given the intention of the sanctions. Those most affected are companies that operate in Libya or that trade with Libya, especially the state-run Libyan banks. It is also important to note that much of the impact on business comes not because of the asset freeze but because of the situation on the ground in Libya.

We seek to minimise the impact on legitimate businesses by issuing licences, which will be issued according to the principles outlined above to permit payments to be made by a designated person under prior contacts: for example, where the goods have already been shipped. There is no automatic ban on new business with Libya unless it is with a designated person, but my understanding is that, because of the situation, there is not much new commercial activity. Some might wonder whether the sanctions prevent businesses that have exported goods to Libya prior to the imposition of sanctions from getting paid. UK businesses have to be able to receive payments due to them when funds are available and the necessary instructions have been received by the UK paying bank.

It may be helpful to answer the question about the basis on which licences are issued. The objective of issuing licences is threefold: to protect and maintain the value of Libyan assets so that they can be returned to the Libyan people; to minimise the humanitarian impact of the asset freeze and the impact on legitimate businesses; and to ensure that licences do not result in funds or economic resources going to the Gaddafi regime. Finally, the UK Government are in close contact with key international partners, especially the US and France, to ensure that a common approach is taken.

It is worth saying that these measures, which may be seen as technical, are designed to put pressure on Gaddafi and those supporting his total disregard for the wishes and human rights of his own people. As such, they are a small but important part of the UK’s contribution to the diplomatic, economic, military and humanitarian actions being taken against the Gaddafi regime by the international community.

[Lord Hunt of Kings Heath]

My Lords, I am very grateful to the noble Earl, Lord Attlee, for that and to the noble Baroness, Lady Falkner, for her contribution to the debate. Let me start by making it clear that we support the two instruments before us and the other two that are associated. I was not expecting the noble Earl to give a detailed assessment of the Government’s overall approach to Libya and to the situation, but I take his point and I am sure that it would be welcomed should there be further opportunities in your Lordships’ House for debates on these matters over the next few weeks and months. I have also noted that we might expect orders in relation to 13 individuals in Syria—I think that that was what the noble Earl said—following action—

[Earl Attlee]

My Lords, I now understand that the instruments will come into force at 6 pm tonight.

[Lord Hunt of Kings Heath]

My Lords, I was just going to say that I welcomed that information, and the fact that action has been taken in this area. The noble Earl has also explained the reason for departing from normal practice in laying the travel bans order. I have no problem with that. He made some very interesting comments about the proportionate application of the asset-freezing regulations. I say again that I fully understand the reasons for that proportionate approach. I hope that his department will be able to monitor that effectively, as experience shows that proportionate application sometimes leads to gaps that people can find their way through. Therefore, it would be good if one could be assured that these matters will be kept under review. I was glad that the noble Earl was able to report that no particular practical measures have so far surfaced in relation to the instruments before us. Overall, I am grateful to him for the information that he has given us.

[Earl Attlee]

It might be helpful if I clarify the position slightly. The asset freeze comes into force at 6 pm tonight, not the travel ban—that will come later. However, I do not advise the designated people to try to travel to the UK.

[Lord Hunt of Kings Heath]

I am sure that we are all reassured by that clarification.

Motion agreed.