Consumer Insurance (Disclosure and Representations) Bill [HL]

Debate between Lord Lloyd of Berwick and Lord Sassoon

Wednesday 15th June 2011 Lords Chamber

[Lord Sassoon]

My Lords, a Second Reading Committee considered the Bill in the Moses Room on Monday 13 June, and I therefore beg to move this Motion formally.

[Lord Lloyd of Berwick]

My Lords, I regret very much having missed the Second Reading debate on Monday—somehow it escaped my notice. It was a most interesting debate and I should like to have taken part. All I will say now is that this Bill was very well chosen for the new Law Commission Bill procedure and I hope that there are others like it in the pipeline. I support the Motion.

Terrorist Asset-Freezing etc. Bill [HL]

Debate between Lord Lloyd of Berwick and Lord Sassoon

Monday 25th October 2010 Lords Chamber

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, if noble Lords will permit me, I will speak to this entire group of amendments, although there has not been any significant discussion on some of them. It is perhaps worth summarising what these amendments would do. They would limit final designations to those charged with a terrorist offence of a description within Clause 2(2). They would require any final designation to cease if the charges are dropped or the person is acquitted and require the Treasury to apply to the court to make an interim designation.

Amendments 1 and 3 relate to the Treasury’s power to make a final designation. They require the Treasury to make final designations against only those people who have been charged with a criminal offence falling within the description of terrorist activity in Clause 2(2) for the purposes of the Bill.

Amendments 4, 5 and 6 require a final designation automatically to expire when a person charged is acquitted or charges are dropped before the ordinary one-year expiry. This goes to the heart of what this regime is intended to be about. Although I echo the words of the noble Lord, Lord Bach, in recognising the contribution of the noble and learned Lord, Lord Lloyd of Berwick, and the great wisdom he brings to this, I think he does not go to the complete heart of the rationale of UNSCR 1373, which is indeed preventive. It requires states to take steps to prevent terrorist acts. I should quote further from the resolution. Its paragraph 1(c) states that one of the means of achieving this requires states to:

“Freeze without delay funds and other financial assets or economic resources of persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts”.

The rationale of paragraph 1(c) is to prevent funds, financial assets and other economic resources being used or diverted for terrorist purposes, and the Government absolutely believe that it would not accord with the preventive rationale of the UN resolution if a final designation could be made only in respect of those charged or convicted of terrorism-related offences.

If that were the threshold, the Treasury would not be able to freeze the assets of those in respect of whom there was evidence that was insufficient to bring such a charge, but sufficient to give rise to a reasonable belief on the Treasury’s part that the person represented a terrorist risk—for example, where an interim designation has been made in respect of a person on the basis of a reasonable suspicion and insufficient evidence has come to light during the 30-day period of that interim freeze that would allow charges to be brought, but the Treasury has nevertheless come to a reasonable belief that the person is or has been involved in terrorism and considers it necessary for public protection that the final designation be made. If the Treasury were not able to make a final designation in those circumstances, that would give rise to a risk of terrorism that the requirements of the UN resolution are meant to prevent.

I remind the House that in making these designations, it is necessary that the dual test is met. The other half of the test, which has not been mentioned this afternoon, is a public protection leg. It is the Government’s continued firm belief that a reasonable belief threshold for a final designation would allow the Government to implement effectively the requirements of the resolution.

[Lord Lloyd of Berwick]

Does the noble Lord accept that reasonable belief goes beyond what Resolution 1373 requires? That is the critical question. It is also the question, which, as I have explained, has been decided by the Supreme Court.

[Lord Sassoon]

My Lords, the interpretation of UNSCR 1373 can be construed partly on a recommendation of the resolution itself and partly on the interpretation which the Financial Action Task Force has made. It is clear from its guidance that asset freezes should not be limited only to cases where people have been charged or convicted. If we were to accept this amendment, which the Government do not intend to do, it would certainly put the UK outside what is considered by all leading countries through the FATF guidance to be best practice in implementing Resolution 1373. What we are proposing is consistent with the approach taken by other authorities, such as in Canada and New Zealand, of which the noble and learned Lord, Lord Brown, approved in the case of Ahmed.

I agree with the interpretation of the noble Lord, Lord Bach, of the situation. Asset freezing is implemented against individuals and groups in the UK and overseas. At the moment, 22 entities and 14 individuals overseas are the subject of asset freezing. Nothing in Clause 1 limits this. Asset freezing certainly is not limited to people in the UK. People anywhere in the world can be designated, but the prohibitions apply only within UK jurisdictions; that is, to assets that are either held in the UK or by UK persons such as banks overseas. I hope that that clarifies the question of territorial scope.

[Lord Lloyd of Berwick]

Is the Minister saying, in effect, that Clause 1 has extra-territorial effect? If so, what is his authority for saying that in the light of the fact that the Bill makes specific provision for extra-territorial effect for offences under Clause 11 but no such provision in relation to Clause 1?

[Lord Sassoon]

Under Clause 1, people anywhere in the world can be designated. To repeat myself again, the prohibitions, on the other hand, apply only within UK jurisdictions; that is, to assets either held in the UK or held by UK persons such as banks overseas. That is about as clear as I can be on the Government’s understanding of the scope of Clause 1. The people overseas who are subject to asset freezes are operating in environments where it is not possible to charge or to convict them clearly of terrorist offences, but where it is necessary in order to disrupt their actual or potential—

--- Later in debate ---

[Lord Sassoon]

My Lords, I am grateful to the noble Lord, Lord Davies of Oldham. I hope that the majority of us are clear about the intended scope of Clause 1, so I shall move on to deal with some of the other aspects. However, it is quite clear that the scope of Clause 1 is as intended and required by our obligations under UN Resolution 1373, which is the relevant resolution.

It is worth noting that while the majority of asset-freezing cases in the UK are against those who are charged or convicted of terrorist offences, at the moment there are six cases where it has been necessary, in order to protect the public from terrorism, to act upon the intelligence picture which, for reasons of national security or admissibility of evidence, cannot be used as the basis for criminal charges. However, that does not, of course, mean that those people do not continue to pose a serious risk to national security. Therefore, to limit final designations only to those subject to a criminal charge would exclude such groups and individuals as I have described. This would fatally undermine the preventive and disruptive nature of the asset-freezing regime as well as impact significantly on its operational effectiveness.

Nevertheless, the Government recognise that the Bill as it was introduced raised civil liberties concerns, and it was to address those that we amended the Bill so that a higher final designation threshold of reasonable belief, rather than the previous reasonable suspicion threshold, is being introduced. However, again I stress that there is a twin test, as the test of necessity for public protection also needs to be met. I do not think that the noble and learned Lord, Lord Lloyd of Berwick, drew attention to that.

The noble and learned Lord referred to a final order as giving an indefinite freeze. However, it is important to recognise that freezing orders have to be relooked at whenever the evidence changes or after 12 months. While “final order” is the term in the Bill, we should remember that a final order or a final designation will expire after 12 months unless it is renewed. We have also provided that the legal challenge to any designation should be by way of appeal. The Government continue to believe that the Bill strikes the right balance between safeguarding a person’s rights and protecting the public.

Amendments 9 and 11 require the Treasury to apply to the court to make an interim designation.

[Lord Lloyd of Berwick]

I have not addressed those amendments yet. I believe they have been degrouped and appear in the next group. I specifically asked before I addressed the House that those amendments, which relate to an entirely separate subject matter—namely, the interim order, not the final order—should be degrouped. If the Minister did not hear that, he can answer what I have to say in due course.

[Lord Sassoon]

My Lords, the last grouping I have seen from the Printed Paper Office suggested that everything was grouped together. Perhaps I should break off here and ask the noble and learned Lord whether he is prepared to withdraw Amendment 1 and not to move Amendments 3 to 6.

[Lord Sassoon]

I am not aware of anything in the resolution that prevents legislation going further. The Bill does what is required to properly implement Resolution 1373 but, if it did go further, that would not be precluded by the terms of the resolution.

[Lord Lloyd of Berwick]

My Lords, the Minister has not fully dealt with the point that what is now proposed goes well beyond what is required by Resolution 1373. He argued that that resolution was intended to be preventive and that what is now proposed is preventive. The resolution states, in paragraph 1(a), that it is intended to be preventive, but it then goes on to say how it is to be preventive by requiring all member countries affected by the resolution to pass legislation to freeze the assets of those who have been charged or convicted of a terrorist offence. That is clear from the language of the resolution. Simply to say that the resolution is intended to be preventive and that the Bill is preventive is not an answer to that point.

The only real answer that has been given was that given by the noble Lord, Lord Bach, when he repeated what was said by the noble and learned Lord, Lord Wallace of Tankerness, in Committee. In particular, he said:

“I also asked how many persons outwith the UK have been subject to designation for asset freezing; the answer is 36, of which 22 are entities and 14 are individuals”.—[Official Report, 6/10/10; col. 150.]

How can that be so under the terrorist orders unless they were intended to be extra-territorial?

That brings us back to the question whether Clause 1 is extra-territorial. The fact that something has happened is by no means proof that it was justified, as indeed is the case with the whole history of this part of the law, which has had to be corrected by the Supreme Court in its most recent decision. Those figures do not convince me at all. We return to the question whether Clause 1 on this particular point is intended to be extra-territorial. It is clear to my mind that it is not, for the reasons that I have already given—namely, that other provisions in this Bill are said to be extra-territorial and this is not included among those provisions. That merely confirms the ordinary rule that we apply all the time that legislation is not extra-territorial unless it is stated to be so.

There is a further question relating to the figures given by the noble and learned Lord, Lord Wallace of Tankerness. If those persons were outside the jurisdiction, how were they notified? Under Clause 3, it is the obligation of the Treasury to notify a person immediately when the final order or an interim order is made. How can we be sure that that is being done when the person is outside the jurisdiction, wherever he may be? The argument that my amendment would in some way cut down a valuable power that the Treasury now has and would not have if my amendment were passed is simply not, with respect, borne out. I am not willing to withdraw the amendment and will take the opinion of the House.

Terrorist Asset-Freezing etc. Bill [HL]

Debate between Lord Lloyd of Berwick and Lord Sassoon

Wednesday 6th October 2010 Lords Chamber

[Lord Sassoon]

My Lords, I am grateful for the important contributions that we have had to this discussion and for the focused points. I appreciate the remarks from around the Committee in response to the amendments that we have brought forward. On one or two of the procedural points, I apologise if noble Lords believe that our amendments came forward a bit late in the day but, as your Lordships will appreciate, they are fundamental amendments to the Bill and, with the Recess and the summer holidays, it took some time, both within the Treasury and with my colleagues in Government, to ensure that we got them absolutely right. We took the time necessary to do that, but I apologise if it has been a bit of a scramble in the past couple of days.

On the question that a number of noble Lords have raised about the process of amendments to amendments, my understanding, although I am the newest of new boys here, is that amendments to amendments are possible but the reversal of amendments on Report is not. Whatever the construction is, though, I am sure that we will be bound by whatever the conventions of the House are. However, I take the point that there are potentially a number of bits of tidying up. We will come to the individual items, but there are certainly one or two things that I shall take away and reflect on. I take that procedural point.

On the question of the publication of the Home Office review, I can only repeat what I said in my opening remarks—I have no specific date. However, I note the remarks that have been made today, and I will take them away and relay them to my right honourable friend the Home Secretary.

I turn to some of the specific points that have been raised. A number of noble Lords, starting with the noble and learned Lord, Lord Lloyd of Berwick, have made the suggestion that it should be for a judge to make the order rather than a Treasury Minister, with the courts then reviewing the order if it is appealed. I cannot do more than refer to the powerful case succinctly put by my noble friend Lord Carlile of Berriew, who said what I would probably have said at greater length: we believe, given the nature of this regime and the nature of the process that requires Ministers to take account of operational information, that it is appropriate for Ministers to make the initial order, but making that order has to be done on the considerably strengthened tests that we are now proposing and there has to be a concern that the public would be put at risk if the order were not made.

[Lord Lloyd of Berwick]

Will it be open to the Treasury to make an order in a case where it cannot be revealed to the defendant what the case against him is? In other words, is it accepted that the Treasury will be applying the decision in AF?

[Lord Sassoon]

I do not believe that the rules about what evidence can be brought before the court are in any way changed by what we are proposing from the conventions that apply. It relates in some way to the point that the noble and learned Lord made about the nature of the evidence that should be there before an order is made. The noble and learned Lord, Lord Lloyd of Berwick, quoted one Supreme Court justice; I could quote others but perhaps I should not detain the Committee. I might have referred to that at Second Reading. The noble and learned Lord, Lord Rodger, has in some of his remarks expressed a different view about the nature of the supporting evidence in order to support very much a preventive approach to this regime.