Sanctions and Anti-Money Laundering Bill [HL]

Lord Falconer of Thoroton Excerpts

Committee: 4th sitting (Hansard): House of Lords
Tuesday 12th December 2017 Lords Chamber

[Lord Judge]

I am going to say much the same as the noble Baroness. I am ever an optimist about this. I think that when the Minister has had time to reflect on the wisdom of some of the amendments that have been proposed that will eradicate some of the less desirable features of this Bill, and make it a much better Act in consequence, we will not need a sunset clause. Oh dear—I have reflected that I may be being optimistic, but I think that I am also being utterly naïve.

I shall not support the amendment at this stage—but if when we come the next stage we have had no improvements in the Bill, then I shall.

[Lord Falconer of Thoroton (Lab)]

I want to underline what was said by the noble and learned Lord, Lord Judge, and the noble Baroness, Lady Kramer. I speak as somebody who has been in the Executive; I have made that point throughout the Committee’s proceedings. I have no doubt that the Bill is necessary, because the nation needs this power. I have no doubt that the noble Minister presenting it is completely—

[Lord Geddes (Con)]

He is not a noble Minister.

[Lord Falconer of Thoroton]

I am sure he is noble.

[Lord Collins of Highbury]

He is a noble Lord who is a Minister.

[Lord Falconer of Thoroton]

I apologise to him. The noble Lord who is also a Minister—I of all people should know that—means well in his intentions and assurances. From experience in the Executive, we reach for the legislation and read it as it is. My anxiety is that unless we get it right in the Bill, we will give the Executive huge powers. As the noble Baroness, Lady Kramer, said, when we voted to leave the European Union, we never intended to do anything other than leave the European Union. We did not intend to change completely the balance of the constitution and give the Executive that degree of extra power. I am talking not only about this Bill, but the whole balance of the constitution. This is happening because everything is necessarily having to be done in a hurry. The oddity about this Bill is that it is an early stage Brexit consequential. It is not adequate in the balance it has struck between the Executive and the legislature. If this Bill has got it wrong, then things will get worse as the pressure builds on parliamentary draftsmen, Ministers and policymakers. We must stand firm as a House to send a message that future Bills must be more accurate than this one in terms of the balance between the Executive and the legislature.

I support the amendment of my noble and learned friend Lord Davidson and my noble friend Lord Collins because it is inconceivable to me, in the light of the number of changes that we have sought, that everything will be put right on Report. The Bill should be time-limited for five years so that the Government have to come back with a further shot at it. We will need this sort of Bill indefinitely, but the balance in this one is so badly wrong that I think a separate clause is appropriate.

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords—indeed, noble and learned Lords—who have taken part in the debate. I acknowledge the points that have been raised on this amendment.

Turning to Amendment 85, it will not surprise the noble Lord that we do not believe that there should be a sunset clause in the Bill. Whatever the nature of our future relationship with the EU—I am sure that the noble Lord, Lord Collins, meant when, not if, we leave the EU; he may choose to clarify otherwise—the powers in the Bill will be necessary. We will need them to comply with UN obligations and we will need autonomous powers to be able to create, amend or lift sanctions to address a wide variety of national security and foreign policy challenges. It is true that the design and scope of sanctions has changed over the years, but we need the power to implement sanctions as part of our diplomatic toolkit, which will not go away.

I also acknowledge and appreciate the point of the noble and learned Lord, Lord Falconer, that all noble Lords, irrespective of the approach and mechanisms, agree with the principle that this Bill is required. I also acknowledge, as I have done in Committee, the important role of this House in the scrutiny of legislation. In the responses I have given on which we are not agreed, I hope it is clear that there are areas that the Government will reflect on and return to. In that respect, I hope to meet with noble Lords in the intervening period before Report to see how we can bridge some of the challenges and differences that have been raised.

Further, I assure noble Lords that we are committed as a Government to getting this legislation right. The Bill is designed to ensure that we can continue to use sanctions appropriately—I know that is a principle accepted by all noble Lords—in response to future global developments and challenges, and to provide that the right safeguards are in place for the use of those powers, which I also respect. I am immensely grateful for the active contributions of noble Lords in helping us to do this.

Sanctions and Anti-Money Laundering Bill [HL]

Lord Falconer of Thoroton Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 29th November 2017 Lords Chamber

In line with the recommendations of the Delegated Powers and Regulatory Reform Committee, any regulations made which use this targeted power must be made under the draft affirmative procedure, so any proposed changes would not come into effect unless and until both Houses have given their assent. I have spent some time giving a detailed outline of the Government’s position and I hope that, with that explanation, noble Lords will be minded not to press their amendments.

[Lord Falconer of Thoroton (Lab)]

I thank the Minister for his detailed explanation. Does the Henry VIII power in Clause 44(2) allow the Government, by regulations, to remove protections that an individual has under other primary legislation in relation to sanctions, for example under the Human Rights Act 1998?

[Lord Ahmad of Wimbledon]

My understanding is that the regulations would apply only to the sanctions themselves, but I shall clarify that legally as well in answer to the noble and learned Lord and return to the specific issue on Report.

[Lord Falconer of Thoroton]

Will the Minister write to me, so that we know the Government’s position before Report?

[Lord Ahmad of Wimbledon]

Perhaps I was not clear: that was exactly my intention. I do not want to say something from the Dispatch Box that is not accurate, so I will write to the noble and learned Lord on that particular point.

--- Later in debate ---

[Baroness Northover]

My Lords, just as my noble friend Lord McNally and I opposed Clause 35 standing part of the Bill, so we oppose Clause 39 standing part of the Bill. Of course, this is in many ways a more dangerous clause. While, under Clause 35, we might find ourselves not imposing sanctions which other countries—say, within the EU—were imposing, in this case the Government are apparently happy to secure carte blanche powers for imposing sanctions.

As the noble Lord, Lord Pannick, has said,

“an appropriate Minister, may by regulations”,

amend this part of the Bill to,

“impose prohibitions or requirements of kinds additional to those for the time being authorised in Chapter 1”.

The Constitution Committee states:

“We do not consider it appropriate for Ministers to have powers as broad as those conferred by Clause 39. In particular, we consider it constitutionally inappropriate for Ministers to have the power, by regulations, to create new forms of sanctions”.


The Delegated Powers Committee states that,

“we do not consider the powers conferred by Clause 39 to be appropriate”.

They explain:

“We do not consider that the FCO’s reasons are sufficient to justify the powers conferred by Clause 39, particularly having regard to the potential width of the powers and the very significant effects on individual rights that amendments made under these powers would be capable of having”.


They also point out, in relation to UN sanctions, that,

“this power is unnecessary for enabling additional sanctions measures to be imposed for the purposes of complying with UN obligations since Clause 7 already has this effect”.

From right across this Chamber and from the Constitution Committee and Delegated Powers Committee comes a clear message, so we join others in opposing that Clause 39 stand part of the Bill.

[Lord Falconer of Thoroton]

The width of this power seems extraordinary and constitutionally offensive. As I understand the drafting of the Bill, it is open to a Minister to pass regulations which allow him to identify individuals on whom he can impose a sanction or prohibition that he has invented. What is more, the only restriction on him is that it must be for the purposes set out in Clause 2(1). If the Minister honestly believes that the invention of a new sanction or prohibition is justified by “a foreign policy objective” of the Government—for example, gaining support from one country by attacking its nationals in this country—the power given by Clause 39 would entitle them to invent a new prohibition and impose it by regulations. Furthermore, should any primary legislation stand in the way of a Minister inventing such a new prohibition that he or she believes is designed to promote a foreign policy objective, that primary legislation can be amended to get rid of an objection by the very same regulations under Clause 44(2). That a Minister could do by secondary legislation such a thing—for example, restrict somebody’s spending their own money, prevent them leaving their home, take away their car or stop certain sorts of bank account being used—without primary legislation strikes me as well beyond what any responsible Government would think should be done by secondary legislation. Can the Minister confirm that my analysis of what could theoretically be done is right, and explain why it is appropriate that that be done by secondary legislation?

[Lord Faulks]

The noble and learned Lord puts a rather sinister construction on this clause. I do not want to add to my noble friend’s discomfort, but I need some persuading that Clause 39 is necessary given the width and nature of the sanctions and the purposes. It was important that the Government resisted the attempt to narrow “a foreign policy objective”, which was an amendment that we debated on the previous occasion, but “a foreign policy objective” gives the Government quite a lot of room for manoeuvre having identified an appropriate sanction. While I suspect that Clause 39 was inserted as a “just in case” provision rather than to give Ministers extraordinary power of the sort that has been discovered, it nevertheless remains at least open in theory to a Minister to exercise power in a way I think all noble Lords find difficult to accept.

[Lord Falconer of Thoroton]

I intervene only to say this: I did not suggest that the motive of the Government was to do this. My experience as a Minister is that you put through legislation and many years later, after emollient assurances given in the House of Lords, those pesky lawyers look at what is possible under the Act. What I have described is possible. Let us imagine if those very same pesky lawyers said, “Well, you might have difficulty getting that through with primary legislation because of the extraordinary width of the powers, but actually we’ve found these rather clever powers in the Sanctions and Anti-Money Laundering Bill which allow you to do it without primary legislation”. That is the danger.

[Lord Hope of Craighead (CB)]

My Lords, I do not want to take anything away from the force of the points just made by the various speakers who object to the clause more fundamentally, but I want to pick up the point the noble Lord, Lord Pannick, described as minor: the wording of the clause. If the Government are minded to keep it, I suggest they might like to look at it again. Subsection (1) is very general, and the opening words of subsection (2) state that what follows is:

“Without prejudice to the generality of subsection (1)”.


The bit at the end in brackets, one assumes, does not qualify subsection (1). Is it in the right place? Is the proclamation that what follows is:

“Without prejudice to the generality of subsection (1)”,


really apposite if you are trying to restrict the scope of the powers as you seek to do in subsection (2)? It is a very interesting interaction of subsections but I suggest that it needs a little more care if the clause is to remain—I say nothing more in support of the point that the clause should not stand part of the Bill.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, perhaps I might intervene in this debate and save the Committee some time. First, they say that sorry seems to be the hardest word but it is not for me. I apologise to the noble Lord, Lord Paddick, since after Second Reading, as he said, I wrote to him and said that the Government intended to bring forward a draft instrument and would put on record during Committee the Government’s intended policy in regard to this clause. I regret to say that we have not fulfilled the first part of that intention—I will come to it in a moment—but I hope that, through what I say, I can fulfil the second part of it now.

Let me assure the noble Lord, Lord Paddick, and the Committee more generally that much work has been, and continues to be, done between officials in various departments on refining this important policy area. As the noble Lord acknowledged, the issue is complex and involves not only the specialist tribunal but how this relates to other aspects of the Bill. This has meant that, despite best efforts by officials, the draft statutory instrument was not ready to be published. It was my view and that of the Government that, rather than publish a statutory instrument that is not yet fully ready, Parliament would be better assisted by seeing a more mature version of that instrument. To that end, my officials and others across Whitehall will continue this work apace. We will endeavour to publish a version of the statutory instrument ahead of Report. I would be happy to meet the noble Lord in the interim to discuss this specific issue. I would also like to put on record for the Committee the intention behind this clause and address some of the points that he made.

Clause 40 concerns how appeals against the immigration consequences of UK autonomous sanctions are handled. I would like to give the Committee some background as to the current arrangements before I go on to speak about the clause. Under the current arrangements, UN or EU travel bans are, in the vast majority of cases, imposed on individuals who are outside the UK and have no connection to the UK. The Immigration Act 1971 already makes provision for persons subject to UN travel bans. Clause 40 allows us to ensure that the persons subject to UK autonomous travel bans can benefit from a similar provision.

In the unlikely event that a UK autonomous travel ban were to be imposed on a person in the UK, this would, as a matter of domestic law, have consequences for their immigration status in the UK—a point I know concerned the noble Lord, Lord Paddick. Whereas a person who is outside the UK will be refused entry, those who are in the UK will lose the right to remain here and may be subject to removal. A person affected in this way might argue that any removal from the UK would interfere with their rights under the European Convention on Human Rights, or be contrary to our obligations under the refugee convention. As a result, they may wish to make a human rights or humanitarian protection claim to prevent their removal. These immigration claims are usually decided by the Home Secretary, and a very developed machinery has grown up around the decision-making process to ensure that it is fair and effective and, importantly, complies with our international obligations. Such decisions, once made, can also give rise to a right of appeal before the immigration and asylum chamber of the First-tier Tribunal, a specialist tribunal with expertise in deciding such claims.

I turn to the Bill. Such immigration claims may also be made against the immigration consequences of a UK autonomous travel ban imposed under the Bill. Again, immigration claims are most likely to arise where an individual in the UK would lose their right to remain here. Noble Lords might ask why we need Clause 40, given that this situation can already arise in the context of a UN or EU travel ban. I wish to explain the point here. The Bill establishes a new administrative reassessment process for designations and a court review process in the High Court or, in Scotland, the Court of Session. No such equivalent administrative and court mechanisms are currently applied in domestic law for UN or EU travel bans. The mechanisms in place are different, so we will need to adapt the existing decision-making and appellate structures that I described earlier in order to accommodate the Bill. That is why we need Clause 40.

I turn back to the practicalities. Cases of this kind are likely to be limited in number, but it is vital that we get this right—a point made by the noble Lord himself. The Government consider it important to ensure that such claims are handled appropriately. We want to ensure that domestic sanctions do not unjustifiably interfere with fundamental rights or run contrary to our obligations under the refugee convention. It is also important that the effectiveness of our domestic sanctions regime is not compromised because our domestic legislation no longer enables us to manage effectively such immigration claims as may be made. The Government have therefore considered how these immigration claims should be treated in the context of the new administrative reassessment and court review processes.

Our conclusion is that, as a starting point, we should seek to maintain the status quo. The Home Secretary and the Immigration and Asylum Tribunal should remain the appropriate decision-makers, as they are now. Both the Home Office and the tribunal are vastly experienced in this area, having dealt with 38,681 human rights and asylum claims and appeals in 2016 alone. However, some changes will be necessary in order to ensure that domestic legislation enables us to manage situations where, for example, there would otherwise be the possibility of both the High Court and the tribunal considering the same issues, or the High Court being required to determine a protection claim that the Home Office had not had the opportunity to consider.

To illustrate the point, whereas the tribunal would be best placed to determine an appeal against an immigration decision, determining the lawfulness of a decision to freeze an individual’s assets is a decision that would be better suited to the High Court. The clause provides the powers necessary to make these changes, which will ensure that we continue to comply with our international obligations and that the effectiveness of our domestic sanctions regime is not compromised. To provide appropriate scrutiny, regulations made under this power will use the draft affirmative procedure.

I give this very detailed explanation along with, once again, an apology to the noble Lord, Lord Paddick. I believe that at Second Reading when he raised this issue I had momentarily left the Chamber or I was near the Box to clarify something, so I did not fully hear his contribution and read it only later in Hansard. As I said, I put on record that we would look to return to this in Committee, which clearly we have not been able to do. I am much minded that the instrument put forward is one that we have looked at extensively and reflects the detail of what I have just submitted to your Lordships’ House. I therefore hope that with that somewhat detailed explanation, which I briefly mentioned to the respective Front Benches out of courtesy to your Lordships’ House, the noble Lord will be minded to withdraw his amendment, with the assurance that I look forward to working with him specifically on that SI before Report.

[Lord Falconer of Thoroton]

I am grateful to the Minister for that helpful and detailed explanation. As I understand him, he is saying that regulations can be produced under this provision, which will delineate between the Minister, the High Court and the Upper Tribunal as to who decides what in relation to the variety of legal challenges that are available both in ordinary law relating to asylum and the right to remain and the rights given under this Act.

That is pretty complex. It is very difficult to judge whether this regulation-making provision is appropriate in its width without seeing a draft of what the Government have in mind. It is critical that the draft be made available a significant time before Report. I do not know when Report will take place, but it may be in the middle of January. Therefore, in the light of what the Minister said about the detailed work on this draft instrument, when might we see it? Obviously, a lot of work has been done on it and there is a draft in existence. The issue is legal appropriateness and there is no reason why we should not see the draft now.

[Lord Ahmad of Wimbledon]

The noble and learned Lord makes an important point about ensuring appropriate time before Report. He is correct to say that we are looking at Report taking place towards the middle of January in the new year, and correct to say that we must allow sufficient time to accommodate it. I cannot give him chapter and verse on the exact date but he makes his point well. I also subscribe to his view that it is important to allow noble Lords sufficient time.

[Lord Falconer of Thoroton]

I am not asking for a specific date, but will it be by the end of the week, or the end of next week? The Minister must give us some assurance that we will have it in time.

[Lord Ahmad of Wimbledon]

As I said, there are already, as the noble and learned Lord will acknowledge, various issues. We will do this in good order. Perhaps I may take this matter back—because various departments are working on this—and clarify appropriately. I will write to noble Lords on the specific date by the end of the week, which will then provide the detail. I fully acknowledge what the noble and learned Lord said about the importance of allowing effective scrutiny before Report. I say to the noble Lord, Lord Pannick—I am sorry, I meant the noble Lord, Lord Paddick; the noble Lord, Lord Pannick, has left but he clearly left an impression on me—that I look forward to working with him once the draft instrument has been circulated. For good order—I look over to the Box and my private office—once the draft has been published, we will seek to circulate it and lay a copy in the Library, as appropriate.

Sanctions and Anti-Money Laundering Bill [HL]

Lord Falconer of Thoroton Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 21st November 2017 Lords Chamber

[Lord McNally]

My Lords, I am pleased to see the Chief Whip in his place because we are getting to a point now where it is quite unfair for the Minister—and a whole succession of Ministers, I suspect, over the next few months—to come to this House, and to Parliament in general, to sell the unsellable. The Chief Whip should report back to the Cabinet that it has to come up with a better idea for handling this legislation. My noble friend Lady Northover said that surely with the noble and learned Lord, Lord Judge, in the Committee, he will come up with some brilliant overarching principle—such is the confidence we have in our former Lords Chief Justice.

I was on the Cunningham committee when it was the Labour Government who were getting impatient with the way that this House and Parliament in general could slow down the progress of a great and reforming Government. It was clear then that the principle that the House of Lords has the right to say no is very important—it may well be tested in the months ahead. But we have also acknowledged that ours is mainly a revising and advisory House, so we have to get the right machinery to handle that. What the noble and learned Lord, Lord Judge, said, from his experience, has to be taken into account.

The present way of doing this just will not work. We have to look at some of the suggestions made by the Cunningham committee for progressing legislation. One was a Joint Committee of both Houses—as with the Congress and the Senate—to resolve difficulties. Another was to allow amendments to certain pieces of secondary legislation. There are ideas around and there are fertile minds that could address this. But if we are going to continue to have Bills with massive amounts of secondary legislation, with massive discretionary powers given to Ministers, and Henry VIII clauses scattered through them, we will have a constitutional car crash. It is the responsibility of the Chief Whip to go and tell No. 10 that that is the truth.

[Lord Falconer of Thoroton (Lab)]

My Lords, I apologise for intervening in the debate at this late stage. I support what the noble and learned Lord, Lord Judge, has said. Reading the Bill, it would appear, despite what the Minister has said, that it would allow regulations to be passed which would allow a Minister to designate any group of people that the Minister considered, by designating them, would further a foreign policy objective of the United Kingdom. For example, if a Minister thought it would further the foreign policy of the United Kingdom to treat everybody from one particular country as a designated person, the Bill would give that Minister the power to do that.

I am absolutely sure that that is not what the Government intend by this, because I have heard the Minister say this evening that the purpose of the Bill is only to allow the Government—the Executive—to join in with sanctions that are imposed by another international organisation, such as the United Nations. It is not intended to give the wide powers that I have just identified. Can the Minister confirm that I am right that it is not intended to give such wide powers? Assuming that I am right, I sound a very loud clarion warning that whatever Ministers say, in either the Commons or the Lords, ultimately the Executive always reaches for the Act of Parliament and sees what the Act of Parliament allows. While I completely respect the good intentions of this Minister—indeed, of the Executive—in relation to this, the only answer, constitutionally, is to limit the powers to precisely what the Government intend. Anything wider, in the months and years to come, could be used by another Government when it was never intended for that to be the case.

[Lord Lennie]

My Lords, we are having a bit of a Groundhog Day. Following on from the noble and learned Lords, Lord Judge and Lord Falconer, where did this idea come from? Where has this authority been dreamed up? It clearly risks overzealous action or a meaningless designation. If it is seen to designate the citizens of an entire nation, it is entirely meaningless. That is a real fear and possibility.

If a person is to be designated, they should be designated by name. I think that is common cause. There may be an occasional circumstance when it is simply not possible to identify or get hold of their name through all kinds of investigative methods, but it would be a rarity-it will not be the generality of the application of this law. The difficulty with enforcement for the banks—the noble and learned Lord, Lord Judge, mentioned this—is real and serious and has been referred to before. The Government should identify the source and purpose of this and then rewrite the Bill in line with what is intended rather than what the unintended consequence would be.

--- Later in debate ---

[Lord Judge]

I shall speak to Amendment 60, which is in this group. It is simply a question of elementary procedural fairness. It is really no more than that and no less than that. It may not be wise to tell an individual before he is designated that he is going to be designated because, obviously, if that were to happen the designation would come too late and the assets would be hidden or dissipated, but procedural fairness is a basic principle of the common law. If you are arrested, you must be informed of the reasons for your arrest. If you are made subject to sanctions of the kind envisaged in this Bill, they affect your livelihood and your ability to support your family and to live an ordinary life so that you are, in the words of my noble and learned friend Lord Hope at Second Reading, in effect a prisoner in your own home. If you are in any way going to be subjected to the coercive powers of the state, you should be told why those coercive powers are being exercised against you and they should be justified. This Bill is bung full of massive coercive powers. In these circumstances, the amendment that my noble friend Lord Pannick and I propose is absolutely self-evident, but without it, or without some concession to this group of amendments, we will end up with having done some insidious damage to an essential constitutional principle, and we should not be doing it. I highlight paragraph 29 of the Constitution Committee’s report, but I do not suppose noble Lords want me to read it.

[Lord Falconer of Thoroton]

What does my noble and learned friend envisage the position to be where the main sort of sanction used is where one is trying to implement sanctions, for example, agreed to in the United Nations? What then does the British Minister do in relation to evidence in relation to why the person is being covered?

[Lord Judge]

Your name goes on the sanctions list before you are told, so as to avoid the dissipation of your assets, but afterwards you are told that you are now designated, these are the consequences, this is why it is happening, this is what you must not do, this is what you must do and—what is more—you had better know that it is X who has given us this information or that we think you are Igor Judge, but actually there is another Igor Judge who lives in, shall we say, Russia and it is him we are after. That way, you can very rapidly get your review looked at and justice done to you.