Terrorist Asset-Freezing etc. Bill [HL]

Baroness Hamwee Excerpts

Wednesday 6th October 2010 Lords Chamber

Subject to those drafting points, to which we may need to return on Report, I am very pleased that the Government have confined final designations to cases of reasonable belief, and have confined interim designations based on reasonable suspicion to a period of 30 days.

[Baroness Hamwee]

My Lords, I congratulate the noble Lord, Lord Pannick, on his energy in tabling Amendment 3 relatively quickly. When I opened all the papers after a break in the summer, I thought that I had better check to see whether any amendments had been tabled, having written “belief” as the first thing in my notes. I found that the noble Lord had got there before me. I am delighted that he did and delighted that the Government have taken the point. It was one of the major points concerning my noble friend Lady Falkner and me, but not the only one. Some of the points that have already been made, particularly by the noble and learned Lord, Lord Lloyd of Berwick, we will come to in later groups of amendments. I, too, welcome what the Government have done so far.

I shall start with a technical point. I hope that the Government and the House will accept that noble Lords may wish to look at amendments to these government amendments at the next stage. I have tripped over this in the past when I have been told that I had accepted a government amendment in Committee. There is plenty that is worth further debate now that we have had more of a chance to consider them. The critique by the noble Lord, Lord Pannick, of Amendments 29 and 31 goes to that point.

On a general note, the Minister referred to the counterterrorism review. One point that he did not cover when addressing whether asset freezing should fall within the review is the different regimes for asset freezing. The differences between the regimes continue to be troubling.

There is a difficulty in how one splits between this group and the third group one's points on whether the decision should be an executive decision or a judicial decision. I recognise the need for speed. The courts are capable of speed and, as has been said, could deal with an ex parte application by the Treasury in order to take what one might call precautionary interim steps in order not to find that the prospective designated person has outwitted them. Our amendments show that I was prepared to contemplate an initial designation by the Executive, subject to an application to the court, which is our third group, but I remain concerned about whether this should be an executive matter or a judicial matter. In this speech, I shall not cover reasonable suspicion for the 30 days as I hope my noble friend will refer to that in a moment.

If I use the term “draconian” for the asset-freezing regime, I will be told that that applied to a previous regime and that the licensing that the Treasury now implements is more benevolent, but I do use the term because I still see asset freezing as very close to control orders. The noble and learned Lord, Lord Brown, said that in one of the cases that we have referred to. He said:

“In certain respects, indeed, they could be thought to be even more paralysing”.

However you analyse the differences, asset freezing is very close to the restrictive end of the spectrum, with an impact not only on the designated person but, as we will come to in more detail later, on that person’s family. Standing back from the technical words, we can think about living in a family where the main breadwinner is not able to function and the impact that that has on the way the whole family operates, the stigma attaching to it and the relationships with the outside world. If I were the spouse of a designated person, I would not want to go shopping in a supermarket feeling that everybody in my community was looking at me. If I were the child of a designated person, I would be really worried about going to school. The prospects for bullying and so on are enormous. That is not to say that we should not protect the public, but we have to bear that other side in mind. The existence of designated persons under an asset-freezing regime is an existence rather than perhaps full life.

It comes down to whether we think the prime responsibility should be that of the Executive or of the courts. For the reasons that I have given, I continue to believe that the impact should be a judicial responsibility. Is it appropriate? Recognising the objective, is it even proportionate for the Treasury to be both the accuser and the judge?

[Baroness Noakes]

My Lords, I was not able to take part at Second Reading, which I regretted as, when I sat in the seat now occupied by the noble Lord, Lord Davies of Oldham, I covered the terrorist asset emergency legislation earlier in the year. I have of course had an opportunity to read that very good Second Reading debate. Despite the fact that I have now moved to this side of the House, had I taken part in the debate I would have regretted that the Government had not moved on from the formulation of asset freezing bequeathed by the previous Government and my tone would have been probably somewhat critical of my Front Bench. So it is a great delight to me to find that the Government have tabled the amendments in this group. They show that the Government have listened to some of the concerns from the civil liberties groups and from noble Lords and noble and learned Lords. In particular, I believe that the belief formulation is superior to the suspicion formulation, and the interim designation solution is a practical response to the issues that have been raised.

The noble Baroness, Lady Hamwee, raised an important point on amendments to amendments. My noble friend will be aware that if we accept these amendments in practice without agreement, there can be no further amendments. But the Government tabled these amendments particularly late—even later than normal for a Government to table amendments. Conjoined with the fact that when they were tabled we were still in recess, and for many of us it was difficult to access things, I hope that my noble friend will accept that it is reasonable for your Lordships’ House to discuss the substance and the detail of the points that come up in relation to the amendments, which I am reasonably confident your Lordships' House will accept this afternoon. It would not be right to stand on the formality that, having accepted the amendments, we can no longer discuss them in the later stages of this Bill.

Having said that I support the amendments in this group, I have one question for my noble friend. It will be interesting to see how these interim designations are used in practice and whether they are converted to final designations. Under Clause 24, there is to be a regular Treasury report on the use of the powers in the Bill. Will my noble friend assure me that that report will cover the extent to which interim designations are converted into final designations? We would want to have some assurance that the power that is being used in relation to interim designations was sufficiently robust and did not fall significantly short of the standard that we would regard as acceptable for draconian actions to be taken in respect of people’s assets.

Finally, picking up on what my noble friend said about the Home Office review, I think he led the House to believe at Second Reading that that review would be available before we returned. He referred specifically to the Commons Summer Recess ending before we returned. It is a considerable disappointment that we do not appear to have that review available for our Committee stage. Is it possible that we will have that Home Office review before finalising the remaining stages of this Bill? It would be disappointing if the Bill left this House without sight of that review. In particular, although my noble friend referred to the fact that it concludes that there are enough significant differences between the control order regime and the asset-freezing regime, many of us remain to be convinced of the translation of that into legal effect. We would value looking at the arguments and analysis that led to that conclusion.

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Moved by

[Baroness Hamwee]

4: Clause 2, page 1, line 17, leave out “is or has been involved in terrorist activity” and insert “has committed or attempted to commit terrorist acts”

[Baroness Hamwee]

I will also speak to Amendments 8 and 9. The term in Clause 2 with which I am particularly concerned is “involved”. It may look from my amendments as if I am more bothered about the definition of “terrorist activity”. I am a little bothered about that, but more concerned about what is meant by “involvement”. I changed “terrorist activity” to “terrorist acts” simply to make it flow better.

The term “involved in terrorism” seems to me very wide, so I hope that the Minister will explain where it comes from and what the precedents for it are. It looks to me as if the term comes from the Prevention of Terrorism Act 2005 provisions on control orders, which we are all agreed is a tough regime. The Terrorism Act 2000 used a different term, “concerned in terrorism”, in relation to deciding whether to proscribe an organisation. I am told by people from Liberty—I am grateful for their help, which I asked for late last night—that the term “involved in terrorism” has been interpreted by the courts under the control order regime and has been applied even where the person concerned has been acquitted of a terrorism offence. Liberty referred me to the cases involving AY and MB. Therefore, it seems that “involved in” requires only a suspicion of involvement rather than an actual charge or conviction. Although we have spent a good deal of time on suspicion and belief in the debate on Amendment 1, I think that we are back in the realms of suspicion in this group as well.

If I am right that the term “involved in” is taken from the 2005 Act, I should perhaps go on to ask about the different terminology that is used as the provision goes on. The 2005 Act talks about “involvement in terrorism-related activity”, which is not quite what is referred to in the Bill. The courts could distinguish between the two terms and, indeed, that might be what the Minister intends. I felt that I should raise the point at this early stage of the debate.

As other noble Lords will have seen, the briefing from the Equality and Human Rights Commission takes the view that such a threshold is not only too widely drawn but is in excess of what is required by UN Resolution 1373 of 2001.

Let me try to shorten the debate a little—I think that this group of amendments need not detain us nearly as long as the previous one—by acknowledging the provision in Clause 2(1)(b), which requires that the Treasury be of the view that the designation would be

“necessary for purposes connected with protecting members of the public”.

I accept that that is a reassuring condition.

However, I am concerned that the term “involved in terrorist activity” might extend to someone who happens to have been a bystander or who has just been associated with someone a bit more dodgy. The person might just have happened to be in the wrong place at the wrong time. I do not know whether this is a fair analogy to draw, but I am aware of concerns in another part of the legal forest about another term that has now, I am afraid, completely gone from me. That tells me that one should make proper notes. Perhaps my noble friend Lord Carlile knows the term that applies where a gang of people who were standing around happen to have seen a murder and are charged. Can you help me, Alex?

[Lord Carlile of Berriew]

The term is “joint enterprise”.

[Baroness Hamwee]

I thank my noble friend. I could not have afforded that advice but I am very grateful for it. As I said, it may not be an appropriate analogy but it has occurred to me that people whom the public might regard as being a long way away from being responsible for something could be charged under the joint enterprise head with a very serious offence, and I should not like to see that applied here. These amendments are tabled in order to understand the Government’s thinking on this clause better than, I confess, I do at the moment. I beg to move.

[Lord Borrie]

My Lords, the noble Baroness, Lady Hamwee, and her colleague whose name is also attached to this amendment have raised very serious matters. After all, vagueness is not appropriate to the creation of a criminal offence and nor does it seem appropriate when the results may be the drastic ones described by several noble Lords in the previous debate. If being involved is something other than having committed or having attempted to commit an offence, what is it? Being involved seems to be so general and unspecific that it seems inappropriate even to legislation which is concerned with preventive matters rather than with a known criminal act that has been committed. I think that the Government are called upon to explain this.

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[Lord Sassoon]

One has to go back to the definition of terrorist activity in Clause 2(2). I cannot do more than draw the Committee's attention back to the definition there, which mentions,

“the commission, preparation or instigation of acts of terrorism … conduct that facilitates the commission, preparation or instigation of such acts, or that is intended to do so … conduct that gives support or assistance to persons who are known or believed by the person concerned to be involved in conduct falling within”,

the previous two paragraphs of the subsection.

It is necessarily drawn wide, but the linkages that are made are clear from the definition. All cases also have to be linked to what is necessary for public protection. I ask my noble friend to withdraw the amendment.

[Baroness Hamwee]

My Lords, I will not leave the Minister in suspense. In view of the point made by the noble Lord, Lord Pannick, I am minded to bring the term “involvement” back on Report in the hope that the Minister will have had an opportunity to consider the culpability issue and will perhaps be able to give us some more assurances on it.

When I moved this amendment, I acknowledged paragraph (b), and I hope I said, because it was what I wrote down, that I was reassured by it. I take that point very seriously and was by no means ignoring it. The boundaries of culpability, as the noble Lord, Lord Elystan-Morgan, described them, are very important. I will come back to this, but not in as extensive a fashion, and I know there are some problems with some of these amendments. I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Moved by

[Baroness Hamwee]

5: Clause 2, page 2, line 7, at end insert—
“(1A) Such designation shall expire after 30 days unless confirmed by the High Court under subsection (1B) of this section.”

[Baroness Hamwee]

I shall speak also to Amendments 6, 14, 16, 17, 26, 35, 47, 50, 60, 61 and 62 which are tabled in my name and that of my noble friend Lady Falkner. Government Amendments 57 to 59, 63 to 69, 71 to 73 and 88 are also in this group which is about the role of the court. In view of the previous debate, and to stop anybody teasing me, I will acknowledge that Amendment 5 provides a 30-day period. I welcome government Amendment 57, which introduces the appeal, but I am concerned that it should be an appeal as most people understand that term, so I will use these amendments to ask the Minister to explain how his new clause on appeal, which is inserted by Amendment 57, and Clause 22, which is subject to some amendments he will move, work together. In particular, we are retaining subsections (3) and (4) of Clause 22, which provide for the application of judicial review procedures.

I appreciate that the new appeal provision is about an appeal on designation. Having got that, and given that even if there were no reference to judicial review it could not be excluded because you cannot exclude judicial review, I am not sure why it is necessary to retain any part of Clause 22. I understand that the Government’s argument is that judicial review would be adequate for the circumstances we might find ourselves in, but the issue arises of how far a designated person under judicial review procedures can challenge the evidence. We will come to special advocates later. What, for instance, if he says that the circumstances have changed? As I understand it, judicial review is about what is in the mind of the decision-maker at the time the decision is made. What is the Government’s objection to appeals on all aspects of this regime to deal with the merits as distinct from the reasonableness of a decision? I am told that how the courts approach judicial review is slightly shifting sands becoming slightly wider and more open. Essentially, it is about legality and reasonableness as well as procedure. Legality meaning vires and reasonableness being Wednesbury reasonableness. Put simply, reasonableness is setting the outer boundaries to the discretion.

In particular, I should like to understand from the Minister whether, as the Bill will be amended with his amendments, the court can substitute its own version of a licence. I do not think that one can look at designation orders without thinking about how the licensing regime will operate as part of them. If we are leaving licensing entirely as an Executive matter, with the court perhaps able to strike a licence down but not able to substitute a different licence, I would be particularly concerned. I look forward to the Minister introducing his amendments. I have deliberately not taken long on mine because the Committee will be waiting to hear from him. I beg to move.

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[Baroness Hamwee]

I have got the point before the noble and learned Lord makes it.

[Lord Davidson of Glen Clova]

Then I will not make it.

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[Lord Wallace of Tankerness]

I think that I am right in saying that the noble Lord represented successful appellants in the case to which he referred. Certainly we would take the view that the special advocate system and disclosure procedures are designed to ensure justice for individuals in difficult circumstances when, as the noble Lord recognises, public interest material cannot be disclosed. The special advocate system has been in effect for some time. With regard to the specific case, applying the AF judgment to asset freezing, the noble Lord is right that there is a relation to control orders, but the Government do not consider that there is an automatic read-across to all other proceedings involving the use of closed material for special advocates. It is fair to say that the requirements of fairness, which are vital, will vary according to the context and gravity of the consequences for the individual. It is engrained in both domestic and European Convention of Human Rights jurisprudence that fairness is context and fact specific. In the case before the Grand Chamber against the UK that immediately preceded the AF case, the point that it can vary was made. That is no doubt a matter to which we will return when we deal with the issue of special advocates under a later amendment.

[Baroness Hamwee]

My Lords, my apologies for ignoring the wonderful country of Caledonia, which I love very much. It was a particular gaffe, given the presence on the two Front Benches of eminent Scottish lawyers.

What I am going to say should be construed as constructive criticism, which is appropriate from these Benches. My noble friend referred to the human rights aspects of designations and how they had figured in the Government’s thinking in inserting the appeal procedure. The significance of the licensing regime must not be downplayed; the human rights aspects of the licences are enormously important. The Government have explained why they consider that a judicial review will be adequate to deal with licences, but the Minister has not explained—perhaps he does not think it necessary—why the appeal route is being rejected. I ask him these questions to get them on to the record. Perhaps I will come back to them next time.

Clause 22(2) allows for a person affected by a decision to apply for the decision to be set aside. The phrase,

“the decision should be set aside”,

is in Clause 22(3). I do not know whether “set aside” covers setting aside a decision and imposing an alternative, which might be varying a licence. If so, that might answer the point, but I suspect that it might not cover it; it is certainly not clear. Clause 22(4) says that this is the condition for the court giving whatever order it determines if it decides that a decision should be set aside. I want to be reassured that the court can take a view not to set aside the licence but to vary the terms of the licence. I do not know whether the Minister wants to comment on that at this point.

[Lord Wallace of Tankerness]

I thought that I had indeed indicated that it is our belief that the court has the discretion to give whatever relief it considers appropriate if it is dealing with a licence under judicial review and that that can include amending the terms of a licence.

[Baroness Hamwee]

I heard that; I took it as a general comment. I was particularly concerned about the words in what will apply—above and beyond, presumably, although I do not know—and whether the general position can trump what is in this legislation. Maybe we can discuss this between now and the next stage and, if necessary, come back to it. I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

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Moved by

[Baroness Hamwee]

12: Clause 3, page 2, line 26, leave out “must” and insert “may”

[Baroness Hamwee]

I shall speak also to Amendment 13 and hope that discussion of the two amendments will take two or three minutes rather than 23. Noble Lords are accustomed to hearing debates about changing the term “may” to “must” in legislation. My amendments would change the term “must” to “may”. They are about notifying designation and about publicity. Clearly, the Treasury must tell the banks, which it does by way of the consolidated list, but I am concerned here, as I am in other parts of the Bill, with the stigma that is allied to designation, and the effect on the family.

The conditions in Clause 3(3) that allow the Treasury not to publicise the designation are very specific. I should like to give the Treasury some discretion, although I accept that it may not use it, to pause and take account of the wider concerns that I have expressed. The clause is important: the offence is dealt with later, but there is a serious point here and I shall be interested to hear what the Minister says about the Treasury's approach.

It was very helpful to hear him explain what lies under the tip of the iceberg, as he described it, when it comes across his desk; but I am sure that he will accept that legislation needs to give assurances both about the tip and about what is concealed under the surface of the sea, and that what the Treasury does as a matter of practice, when it is good, needs to be enshrined in legislation so that it cannot be varied without Parliament being aware. He will not have had the experience that other noble Lords have had of saying: “Yes, Minister, you’re fine, but what about your successors?”. I beg to move.

[Lord Sassoon]

My Lords, I fully appreciate that the intention of Amendments 12 and 13 is to give the Treasury flexibility when determining whether to publicise a designation. However, the Treasury believes that the automatic publication of designations on its website where the conditions of Clause 3(3) are not met is the most efficient and effective way of achieving the appropriate level of awareness and compliance with the asset freeze. It is the most effective method of informing the financial sector and other parties of their asset-freezing obligations, and thus of limiting the risk of the prohibitions—

[Lord Sassoon]

If my noble friend will permit me to go on, I will get to the answer to that challenge and explain why, in the round, the current construct works. We need the most effective method of informing the financial sector and other parties of their asset-freezing obligations to limit the risk of the prohibitions in the Bill being unwittingly breached in relation to funds being diverted for terrorist purposes. I accept that such an aim is not inconsistent with Amendments 12 and 13, but, if I may go on, let me complete what I was saying about our reasoning for believing that the Bill as it stands works well.

We recognise that, yes, publication would interfere with the listed person’s right to respect for their private life, but we believe that greater weight must be given to the public interest in ensuring that a designation is effective and that a designation will be most effective when generally publicised. Indeed, the Supreme Court has acknowledged the public interest in publicising designations generally. In January, the court ruled that the identity of four designated persons could be made public and that anonymity orders were justified only in an extreme case where there was significant risk to the designated persons or their families. There are no reports of any individual being harmed as a result of their asset freeze being publicised. Indeed, general publication is consistent with international best practice and the FATF guidance. The EU publishes on its website details of those persons who have been designated under the respective regimes. If the UK were to cease publicising designations generally in all cases other than when a restricted publication was justified under Clause 3(3), that would give rise to an approach that was inconsistent with those of international partners and international guidance and best practice.

For the reasons that I have set out, I hope that your Lordships will support maintaining the current drafting of the Bill and that my noble friend will withdraw Amendment 12.

[Baroness Hamwee]

My Lords, I had not thought of the point about danger to the designated person and his family. Actually, I can see that that could be a serious concern.

I am still not persuaded that Amendments 12 and 13 would inhibit the Treasury acting as the Minister described. I am sure that this is not his intention, but his response seems almost to amount to a fear that the Treasury cannot be trusted to make a sensible decision. However, although I am not persuaded, I will not pursue the matter further so I beg leave to withdraw Amendment 12.

Amendment 12 withdrawn.

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Moved by

[Baroness Hamwee]

24: Clause 4, page 3, line 14, leave out “they consider appropriate” and insert “are necessary”

[Baroness Hamwee]

In speaking briefly to Amendments 24 and 28, I perhaps come from a different stance from that for the previous group of amendments.

In both Clause 4, “Duration of designation”, and Clause 5, “Variation or revocation of designation”, as currently drafted, the Treasury must,

“take such steps as they consider appropriate”,

to bring such matters to the attention of the persons who have already been informed of the designation. Amendments 24 and 28 would change “they consider appropriate” to “are necessary”. First, I simply want to understand why it is necessary for the Treasury to have the slight subjectivity—the discretion, if you like—that is allowed in the clauses as drafted. Secondly, I want to ask whether “appropriate” implies a degree of reasonableness. Could the Treasury take a completely off-the-wall view, or must it act reasonably in Clauses 4 and 5?

[Lord Sassoon]

Let me try to address my noble friend’s concerns about Clauses 4 and 5. As she said, Amendments 24 and 28 would remove the Treasury’s discretion to determine subjectively the steps that it considers appropriate and replace it with an obligation to take steps that are objectively necessary. Let me try to explain why the Government believe that the amendments are unnecessary.

In practice, the Treasury will consider what steps are objectively necessary. In determining the appropriate steps to be taken, the Treasury will be conscious that the determination should be objectively justifiable, as a decision not to take a step that would be objectively construed as being necessary would be subject to legal challenge on the basis of being unreasonable. The Treasury will in practice decide on a case-by-case basis the best way to notify persons that a designation has expired, been varied or been revoked, with full consideration being given to the particular circumstances of the case of the designated person and of any other relevant factors. In practice, designated persons will always—unless they cannot be traced because, for example, they have gone overseas—be notified in writing that their designation has expired or been revoked or varied. Details of the change will be notified to other persons in the same way as the original designation.

The Treasury’s duty to notify is underpinned by the requirement in Clause 37(3), which states:

“Where the Treasury do not have an address for the person, they must make arrangements for the notice to be given to the person at the first available opportunity”.

I absolutely agree that it is important that persons informed of a designation are also informed of its expiry, revocation or variation and that such information should be provided in the most appropriate way. However because of the way that, as I have described, that will happen in practice, I do not believe that Amendments 24 and 28 are required. I hope that noble Lords will agree that it is not necessary to amend the Bill in this respect.

On that basis, I hope that my noble friend will consider withdrawing Amendment 24.

[Baroness Hamwee]

My Lords, I will do more than consider it. I beg leave to withdraw Amendment 24.

Amendment 24 withdrawn.

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Moved by

[Baroness Hamwee]

34: Clause 6, page 3, line 31, leave out “, or has reasonable cause to suspect,”

[Baroness Hamwee]

My Lords, I shall speak also to Amendments 36, 37, 39, 40 and 43. Clause 6 creates an offence, so we must be very confident that that offence is on a proper basis. My amendments would change the words,

“or has reasonable cause to suspect”,

in the context of a person knowing or suspecting that certain information is to be treated as confidential, to “reasonably suspects”. The same point comes up in a number of places in the Bill. The two terms are obviously extremely close but “reasonable cause to suspect” is about the reason for the suspicion, whereas “reasonably suspects”—my alternative phrase—is about the suspicion itself. One needs to ask whether the suspicion is reasonable in the round, as distinct from merely whether it is reasonable to believe in whatever caused the suspicion. Indeed, with regard to the term in the Bill, “reasonable cause to suspect”, I might add the question: does the person have to have the suspicion or can he be guilty of an offence—I stress that this is why this issue is important—if he believes something that would lead a reasonable person to suspect although the person himself does not form the suspicion? If someone says “angels and pinpoints” I shall understand, but I think that there is an issue there.

Amendment 36, quite differently, would take out the reference to “any other enactment” in Clause 6(4)(c), where disclosure is permitted if it is necessary to give effect to a requirement under this part or under any other enactment. I have tabled this amendment in order to ask the Government to justify those words and to explain why it cannot be left to the “other enactment” to deal with the situation. I beg to move.

[Lord Sassoon]

I shall take Amendments 34 and 36 in turn. Amendment 34 would limit the effectiveness of the provisions concerned with protecting the confidentiality of information provided by the Treasury to certain persons in connection with a designation. It would mean that only those who know, as opposed to those who have reasonable cause to suspect, that information they possess is to be treated as confidential may commit an offence by disclosing it. This would weaken the protections afforded to confidential information and thus potentially adversely affect the designated person’s rights.

It is right that those who have reasonable cause to suspect that information they possess is to be treated as confidential should be subject to criminal sanctions if they disclose such information. If a person had reasonable cause so to suspect but claimed not to have any suspicion and went on to disclose the information, it could be said that the person ought to have held a suspicion, in which case such disclosure should be prohibited. The current drafting of the clause provides the greatest degree of protection to the confidentiality of the information that the Treasury has provided. This is a complex series of interlinkages but I hope that on the basis of that construction my noble friend will withdraw her amendment.

Amendment 36 would limit lawful disclosure to circumstances where disclosure was necessary to give effect to a requirement imposed under or by virtue of Part 1 of the Bill only and not any other enactment. The amendment would have the effect of prohibiting disclosures which are required to give effect to any requirements imposed by any other Acts of Parliament. This would, for example, prevent disclosures concerning money-laundering or terrorist financing being made to the Serious Organised Crime Agency under either the Proceeds of Crime Act 2002 or the Terrorism Act 2000 with the consequence that the person concerned would be in breach of the statutory requirements contained in another Act. Preventing such disclosures would of course have a serious impact on the UK’s operational effectiveness in fighting crime, and delaying such disclosures while authority to disclose was sought from the Treasury would have an adverse operational impact. Therefore, as with the other amendment, I hope that my noble friend will not press Amendment 36.

[Baroness Hamwee]

My Lords, I am grateful for that. I had to think very carefully about how to express the bulk of my amendments, and indeed I had to take care to read my notes accurately. Similarly, I think that I need to read the Minister’s reply carefully to ensure that I understand it. For the moment, I beg leave to withdraw the amendment.

Amendment 34 withdrawn.

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Moved by

[Baroness Hamwee]

38: Clause 8, page 4, line 32, after “indirectly” insert “, with the intention of benefitting the designated person”

[Baroness Hamwee]

I shall speak also to Amendments 41, 42, 44 and 49. Here, we come to the prohibitions—again, creating offences—and there are a number of terms which I am seeking to understand through these amendments. The first is the term “indirectly”, whereby funds, services, economic resources and so on may not be made available directly or indirectly. I could just have sought to delete the word “indirectly” but I can see that it must mean something, and in the context of this issue I do not want to suggest that we are seeking to weaken the arrangements. Therefore, I have chosen instead to insert the words,

“with the intention of benefitting the designated person”,

but, as the Minister will have guessed, my real concern is to know what might be covered by the term “indirectly”.

The other term that concerns me is “partly”. To take the first point at which it arises—in Clause 9—the definition of “financial benefit”,

“includes the discharge of a … obligation for which the designated person is wholly or partly responsible”.

My concern here is perhaps a little different because the situation might arise in which the spouse of a designated person wants to make a payment on a joint mortgage. It seems to me that that would be prohibited, although it could obviously be licensed.

This is all about the family. I accept that there is a proposed new clause about social service benefits, but I wonder whether it is extensive enough. Joint mortgage was one example. Obviously, joint accounts will be frozen—I say obviously, but maybe I will be corrected. Will a spouse’s separate account be affected? To take a different situation, if the spouse’s employer fears that the spouse’s wages are going to a designated person, how should the Treasury, or anybody else, react? Can we have reassurance that the spouse’s income will not be stopped because the terms of the legislation are such that the employer might fear that he is committing an offence?

Amendment 40 specifically addresses joint assets and requires the Treasury to grant a licence, so I am coming at this from a number of different directions. I look forward to hearing what the Minister has to say and beg to move.

[Lord Wallace of Tankerness]

My Lords, as the amendments in this group enjoy a similar theme, it is perhaps not surprising that the Government’s position on the amendments also is similar. Amendments 38 and 42 relate to Clauses 8(1) and 10(1) respectively. These clauses prohibit the making of funds, financial services and economic resources available directly or indirectly to a designated person where the person providing the funds, financial services or economic resources knows or has reasonable cause to suspect that the ultimate recipient is a designated person and, additionally, in the case of economic resources, knows or has reasonable cause to suspect that the designated person would be likely to exchange them or use them in exchange for funds, goods and services. As for my noble friend’s initial question on the import of the word “indirectly”. Quite simply, it means that the benefit is directed through a third party and not the designated person.

The amendments would mean that a person could be prosecuted for breaching these prohibitions only if it could additionally be proved that that person intended the funds, financial services or economic resources to benefit the designated person. There is a concern that that would add a layer of complexity to the prohibitions and make it much more difficult effectively to enforce them. In these circumstances any prosecution would require proof beyond reasonable doubt that the person harboured the intention that the designated person should benefit from such funds, financial services or economic resources.

The Government do not support these amendments for two reasons. First, the amendments increase the difficulty with which the prohibitions can be enforced. Secondly, the Government do not believe that they achieve what is believed to be their intended effect, which is to provide a further protection to parties who unwittingly make funds, financial services or economic resources available directly or indirectly to a designated person. The prohibitions are already drafted so that persons who do not know or have no reasonable cause to suspect that they are breaching them, are not caught. It is therefore somewhat superfluous to require further that the prohibitions should apply only to those who intend that the funds, financial services or economic resources provided should benefit the designated person.

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With that explanation and reassurance with regard to the flexibility and use of the licensing scheme, I hope that my noble friend will withdraw her amendments.

[Baroness Hamwee]

My Lords, I shall certainly do so. I am grateful for the Minister’s explanation of the term “indirect”. On his point that I dealt with the term “partly” and thus added complexity, I think I would say, “So?”. If my amendments do not achieve their objective, that is another point.

I remain concerned about the licensing relying on Treasury policy rather than flowing from the provisions of the statute. The Minister recognises that that is a serious point and I think he will also recognise that there is a line between relying on current policy, which may be changed dramatically or morph into something else, and having the reassurances that a provision in legislation would provide. I wonder whether I can talk to him on Report about this point, not about the rest of the group of amendments, to see whether something might be achieved that we both want to achieve. I beg leave to withdraw the amendment.

Amendment 38 withdrawn.

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Moved by

[Baroness Hamwee]

45: Clause 12, page 6, line 12, at end insert—
“( ) The prohibitions in section 8 to 11 are not contravened by the provision or funding of the provision of legal representation, legal advice or other legal services of, to, or for the benefit of the designated person.”

[Baroness Hamwee]

My Lords, at last we come to some single amendments. Amendment 45 would provide that the prohibitions that we have just been discussing are not contravened by the provision or funding of the provision of legal representation, advice or other legal services for the benefit of the designated person.

I understand that the practice—again, there is a distinction between practice and legislation—is that a general licence is granted by the Treasury for legal aid. One must put in brackets that we know what is happening to the provision of legal aid more widely; it has been becoming less and less available. With this amendment, I am not trying to find a loophole for the prohibitions to be avoided—perhaps evaded would be the right word. It has been put to me in discussion with Ministers and the Bill team—I have left it rather late, but I should thank them for the time that they have spent discussing the Bill with me before today—that money might go to a dodgy lawyer who would pass it on to a designated person. Obviously, that would be an offence.

It goes against every fibre of both my being and my legal training to see anything that might deny access to legal advice and representation—in other words, access to justice. I wait to hear whether there are loopholes in the amendment, but I think that the principle is important. I beg to move.

[Lord Pannick]

My Lords, I am very sympathetic to the amendment for two reasons. First, it seems to me right and proper to allow a person to use as much of their financial resources as they see fit to pay for legal advice and assistance. To impose restrictions on them in that respect is simply to interfere with the administration of justice. Secondly, I cannot see that the Treasury has any interest whatever in preventing a person using their own funds to pay for legal advice and assistance. The Treasury’s only legitimate interest is in preventing the use of the funds for the purposes of terrorism. If the money is being paid to someone who is regulated by the Law Society or the Bar Council—I appreciate that the amendment may need some tinkering to cover those points—I cannot see that the Treasury can have any legitimate concern as to the improper use of the money for purposes associated with terrorism. If the Minister takes a different view and there is evidence to suggest that persons who are regulated by the Law Society or the Bar Council are or may be acting improperly in this respect, please will he tell the House and explain what steps the Government are taking to draw such concerns to the attention of the proper regulatory authorities?

[Lord Wallace of Tankerness]

My Lords, this is an important amendment, and one that is somewhat foreshadowed by the comments of the most reverend Primate the Archbishop of York when we debated an earlier set of amendments. The effect of the amendment would be that any payments the purpose of which was to pay legal expenses of a designated person would not require a licence. As a result, the Treasury would have no oversight of such payments.

It is important to emphasise that that would include payments not just directly to solicitors and law firms but to designated persons themselves if the purpose were to pay legal expenses. This could include payments made by one designated person to another if the first designated person had access to free funds.

I understand the legitimate concerns that have prompted the amendment. I emphasise without equivocation that a designated person must be in a position at the earliest possible opportunity to challenge a designation or any other related decision made by the Treasury under the Bill, but I believe that the existing licensing scheme meets this requirement. Licences already provide a controlled mechanism whereby designated persons can be provided with funds to pay for legal representation with adequate conditions in place to control the risk of funds being diverted to support terrorism. A designated person or any other affected party may also request a licence at any time.

Moreover, the Treasury has issued a general licence that applies to all designated persons to enable eligible legal aid payments to be made. I give the assurance that that will be replicated once the Bill is enacted. That general licence ensures that a designated person will have immediate access to legal representation where they qualify for legal aid. Any other party may request a licence at any time to pay for a designated person's legal expenses. I emphasise that the general presumption is that where a licence is requested to pay for legal costs, it will be granted.

The Government believe that this is the proper and effective way to deal with the provision of funds in relation to legal services provided both by the state, under the legal aid system, and by other persons. It does not and is not intended to impede a designated person's ability to access justice, which we think is very important, but it also ensures that the Treasury can maintain oversight of a designated person's expenditure. I hope that, against that background and with that reassurance, the noble Baroness will be willing to withdraw her amendment.

[Baroness Hamwee]

My Lords, we come up against the issue of policy and legislative provision yet again. The oversight by the Treasury could be provided by requiring reporting to the Treasury. I take the point about regulated providers made by the noble Lord, Lord Pannick, and the point about not permitting payment to the designated person made by the Minister. Subject to those points, I do not see a lot wrong and I see a lot right with my proposition and, again, I do not want to abandon it tonight. However, for the moment, I beg leave to withdraw the amendment.

Amendment 45 withdrawn.