Canary Wharf Bombing: Compensation
Debate between Baroness Hoey and Damian Hinds(8 years, 10 months ago)
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The Exchequer Secretary to the Treasury (Damian Hinds)
I am grateful for the opportunity to serve under your chairmanship, Ms Dorries. I thank the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) and commend him for securing this important debate on a subject that is of particular importance to his constituents and on which he has campaigned consistently. I also commend the hon. Members from four different political parties who are attending this debate.
The docklands bombing of February 1996 was an horrific event—a black day for London and the United Kingdom. I add my condolences to all those whose lives were affected by the terrible events that day. The horror will not be forgotten. Two people died and 39 were injured, some permanently. It was a breaking of the IRA ceasefire and a failure of humanity. The involvement and support of the Gaddafi regime in this and other events marks a low point even in Gaddafi’s reign of terror. It is right that those whose lives were affected by these senseless bombings seek redress and compensation, and we will do what we can to ensure they get it. I know how important this issue is to the hon. Gentleman and to other hon. Members who are here today.
The hon. Gentleman specifically asked about the Libyan assets frozen in the UK, and the potential use of those to compensate victims of Gaddafi-sponsored terrorism. To answer that, it is important to set out the background of how those assets came to be frozen in the UK, and to explain the limits on the use to which they can be put.
In 2011, the United Nations took action against those involved in, or complicit in, ordering, controlling or otherwise directing the commission of serious human rights abuses against persons in Libya. This included, among other measures, the imposition of an asset freeze against a number of individuals and entities, including Muammar Gaddafi and some members of his family. On 2 March 2011, the European Union implemented these asset-freezing measures through regulation 204/2011, which has direct effect in the UK. The UK Government have no additional domestic freezing measures under the Libyan sanctions regime.
The approximate aggregate value of funds frozen in the UK under the Libyan financial sanctions regime is just under £9.5 billion. It is very important, for the purposes in which the hon. Gentleman is interested, to recognize that the whole Libyan Government are not subject to sanctions. A small number of entities associated with the Libyan Government are subject to asset freezes. The names of those entities are published in the Treasury’s consolidated list of financial sanctions. They include the Libyan Investment Authority and the Libyan African Investment Portfolio, which are subject to partial asset freezes, which means they are free to deal with new funds generated after 16 September 2011. The Libyan Government additionally hold further unfrozen funds in the UK and elsewhere. Therefore, existing financial sanctions would not prevent the Libyan Government from agreeing compensation with victims and making payments to them from unfrozen funds.
Kate Hoey (Vauxhall) (Lab)
Given that it could be some time before there is a genuinely workable Libyan Government, why could this Parliament not—the Minister will tell me if this would not be legal—decide to unfreeze a certain proportion of those frozen assets so that we can sort out the issue of compensation to victims in the UK?
Damian Hinds
I will come to that. As for the financial sanctions that are in place, an asset freeze means that the assets of the individual or entity must be frozen where those assets are. The funds continue to belong to the individuals and entities listed under the sanctions regime and are not seized or held by the United Kingdom Government. The funds remain frozen in the bank account they were in at the time of designation and, for individuals and entities subject to a full asset freeze, interest may be credited to those accounts provided that the interest is also frozen. The sanctions prevent any person from dealing with those funds or making funds available to the individuals or entities listed under the sanctions regime without a licence from the competent authority—in the United Kingdom, as the hon. Gentleman rightly identified, the competent authority is Her Majesty’s Treasury.
Access to frozen funds can only be licensed in accordance with the grounds set out by the United Nations and the European Union, and there are seven licensing grounds applicable to this sanctions regime. To summarise, the grounds allow for payments in the following categories: first, for the basic needs of the designated person; secondly, for the legal fees of that person; thirdly, for fees for the routine maintenance of frozen assets; fourthly, for the extraordinary expenses of the designated person; fifthly, for the satisfaction of judicial or administrative orders enforceable in the EU; sixthly, for humanitarian purposes; and seventhly, for obligations arising under contracts prior to the imposition of sanctions.
To clarify further, a Treasury licence would not compel a payment to be made, but would simply provide that the payment would not be a breach of financial sanctions. It is clear that none of the licensing grounds would allow the Treasury to select a frozen account at will and require that funds be paid from it to a third party.
Damian Hinds
I will have to write to the hon. Gentleman with the detail in answer to that question, but of course the sanctions regimes are not unique to the UK and are governed by international law and UN and EU conventions.
A great wrong was inflicted on innocent victims on that day in 1996, and a key part—
Damian Hinds
Will the hon. Member for Poplar and Limehouse be responding, Ms Dorries?