Al-Qaida (Asset-Freezing) Regulations 2011

Lord Myners Excerpts

Wednesday 9th November 2011 Grand Committee

[Baroness Kramer]

My Lords, I have no objection to the regulations and I will take only a few moments of the Committee's time to seek clarification on a couple of points. From the perspective of my colleagues, it is clearly necessary to tackle not only terror but the funding of terror. This legislation is part of that overall approach. We are pleased to see the strengthening of due process and the sunset clauses that are part of the regulations.

I will ask a couple of very small questions. Will the Minister clarify that no practical implications of any significance will follow from separating the al-Qaeda regulations from those applying to the Taliban? Is this just a measure to fall into line with EU and UN resolutions? In moving from the umbrella of one set of regulations to the umbrella of another, will the process be seamless? Is there any possibility of a slip between the two? Obviously, we would not wish to see such an opportunity exploited.

My second question is perhaps of more interest to the wider community. Will the Minister give us some reassurance that these regulations will not put an additional burden on ordinary people? He will be very aware that the combination of anti-money laundering and anti-terror legislation has put a significant burden of cost on both individuals and businesses, not least when it comes to the long delays in fund transfers that the banks explain by saying that it is necessary for them to go through security procedures and checks, during which time the banks seem to hold on to the money and benefit from the interest rather than either party to the transaction. One must live with measures such as that, but we would all find it unfortunate to see any increase in the burden. I would appreciate reassurance on those points, but we support the regulations.

[Lord Myners]

My Lords, like the noble Baroness, Lady Kramer, I have no issues of principle with this legislation. However, I would like the Minister's help on a couple of issues. The Explanatory Memorandum states that policy in the area of sanctions needs to be effective, proportionate and dissuasive. I would like the Minister to address Regulation 14(1)(a) and (b) and say whether the levels at which the penalties are set can truly be described as “dissuasive”. Given the consequences of terrorist action, the proposed penalties appear to be quite modest. I would also like the Minister to explain the level 5 standard referred to in Regulation 14(2).

I would also like to know—this is a very important issue—why a proposed breach of Regulation 8(3) by a financial institution does not incur a criminal penalty. Why are financial institutions exempted from criminal penalties while individuals are subject to them?

I turn to Regulation 9(4)(b). Can the Minister explain the criteria employed by HMT in determining an appropriate publicity strategy, and how the licences will be publicised under the regulations—specifically, where and when?

Under Regulation 20(1), how many licences are currently issued under Regulation 7 of the Al-Qaida and Taliban (Asset-Freezing) Regulations 2010, and how many have been issued under the 2010 regulations since they were passed by Parliament?

Finally, it would be helpful if the Minister would confirm that legal aid will be made available to individuals who are subject to freezing orders. The consequences of these freezing orders are draconian and chilling. It is incumbent upon us to ensure that anyone threatened with the consequences of having their assets frozen has access to appropriate legal advice. Will the Minister confirm that that will continue to qualify for legal aid?

--- Later in debate ---

[Lord Sassoon]

My Lords, I thank noble Lords very much for this focused short debate and for a number of questions which are absolutely to the point. Even though the noble and learned Lord says that his question is tangential, I do not think that it is at all. It goes to the heart of the UK’s concerns to make sure that when the UN did its review of the regime leading up to June 2011 we made sure that there were additional proper protections. I might come back to that in a minute.

I am grateful that all noble Lords recognise the importance of these regulations but it is equally clear that we should get the details right.

In answer to my noble friend Lady Kramer’s questions, I can certainly reassure her that absolutely nothing will slip through the gaps; there is nothing separating the old and the new regimes. We are putting in place something that ensures that there is a seamless continuation from the old combined resolution regime into the two separate regimes.

On whether there will be any additional burdens on ordinary people, I shall expand that to ordinary people and small businesses because it is important that small businesses do not have any additional burdens placed on them. Consistent with my previous answer, there should be no substantially changed burdens from the previous regimes. In fact, there has been some rationalisation of the drafting of the regulations in the process of coming forward with this new regulation. We continue to have a dialogue with representatives of small firms. I can reassure my noble friend on that. She also asked about the burden on people. It mainly will ensure that private individuals, who are in any way conceivably connected to this regime, have legitimate payments flowing to them. I believe that the regime will continue to ensure that that is the case.

I wondered why the noble Lord, Lord Myners, was writing away so furiously and I now understand that he was setting an exam paper for me.

[Lord Myners]

Pass.