Terrorist Asset-Freezing etc. Bill [HL]

Baroness Falkner of Margravine Excerpts

Wednesday 6th October 2010 Lords Chamber

[Baroness Falkner of Margravine]

My Lords, I add my voice to the chorus of those congratulating the Minister on having contemplated our views over the summer and having come up with these clauses. Before going into the substantive points that I want to make, I will touch on the technical point of amendments to amendments and hope that we will be able to revisit it. I went to the Table Office, or duty Clerk’s office, on Monday at 4.20 pm and was told that even on that day I was already too late. I received the letter from the Minister detailing his reasons for these amendments—it was very gratefully received and I cannot thank him enough for it—at 6.30 on Monday evening. For obvious reasons, it had not yet been placed in the Library, so there was absolutely no possibility of scrutinising the amendments with a view to doing anything about them.

On the test of reasonable suspicion, the Minister said in his opening remarks that we should not use the same level of safeguard across all legislation. That somewhat concerned me because, as other noble Lords have said, there is nevertheless a relationship with the control orders regime. My noble friend Lady Hamwee has referred to the Supreme Court’s rulings in the Ahmed case, where the noble and learned Lord, Lord Rodger, said that,

“the harsh reality is that mistakes in designating will inevitably occur and, when they do, the individuals who are wrongly designated will find their funds and assets frozen and their lives disrupted, without … having any realistic prospect of putting matters right”.

I accept that this will now apply only for a period of 30 days, but when your employer and all and sundry around the work that you do are told that your assets have been frozen on the basis of your having been a designated person under terrorism legislation, that has its implications for your future employment. It is not just that your assets are frozen for a period and you hope that you will be non-designated. It affects not only your family and friends but your future employment prospects, so it is perhaps more serious. The noble Lord, Lord Pannick, referred to the 30-day freezing as “inconvenient”. I suggest respectfully to him that it is potentially more than inconvenient.

I wonder whether the noble Lord can tell us why he chose 30 days for these interim orders rather than, perhaps, 45 days as I expect the Treasury’s civil servants or certainly the Home Office’s would have sought. Why did he not choose 14 days, or 31 days or 29? What is the magic cut-off whereby information will become available on the 30th day that was not available on the 29th? The Minister also said that there are other countries with similar systems. I wonder whether he could share with us the other countries that have such a low test, even for an interim order of 30 days in the first instance. It would be helpful to know whether they have similar systems to ours.

--- Later in debate ---

[Baroness Falkner of Margravine]

My Lords, it is the term “the real world” used by my noble friend Lord Carlile that provokes me to speak. He may well agree—academic pursuits and all that set aside—that because of my background, if for no other reason, I have some understanding of this particular real world and the people involved in it. The concern, particularly for me, is that an interim designation that is based on reasonable suspicion followed by such a broad inference of what kind of suspicion might lead to what kind of involvement is very wide indeed. We will catch an awful lot of people for no reason at all. I am talking about communities where large numbers of family members live together. Such communities are tight-knit and a lot of support is given to each other, often simply on the basis of familial, religious or community loyalty. The people in these communities, particularly the women, will, often in good faith, do something that is asked of them without seeing what it might lead to. The idea that they will be cognisant of and understand reasonable suspicion enough as a test and the level of involvement as another test and try not to commit those offences is asking rather a lot on frail grounds. Will the Minister reconsider this and the exhortations of my noble—and extremely knowledgeable—friend Lord Carlile that we need to be extremely careful in this regard?

[Lord Sassoon]

My Lords, let me attempt to deal with this. I certainly feel that I live in the real world in that I have to make such decisions regularly. One limb of the test that has not been stressed in this discussion but which is absolutely critical to it is that the legal test for freezing assets has the second limb that the Treasury must also conclude that a designation is necessary for public protection. That is the critical safeguard on how the power to freeze assets is used. There can be very fast-moving situations, as described by my noble friend Lord Carlile of Berriew, when the exact nature of each person’s role in a plot is not immediately clear. It would be a significant restriction on the regime’s ability to operate in the preventive way that is necessary for public protection if we were to exclude those who might be involved in the broader commissioning, facilitation and support of terrorist activity.

My noble friend instanced the case of people who may be sitting on money. It is essential that the definition is not restricted in the way that Amendments 4 and 8 propose if it is to be effective. As the plot is disrupted, the exact nature of people’s role will become increasingly clear. It will become clear who is a “bystander”, to use the word of my noble friend Lady Hamwee. I think that the two-stage framework that we will now have in place, combined with the requirement for Treasury Ministers to conclude that the designation is necessary for public protection, deals with the point.

--- Later in debate ---

[Lord Davies of Oldham]

My Lords, I shall speak also to the amendments grouped with Amendment 7, including Amendment 51, which is linked to it. I also note that our new Clause 10 is included; it is there in a most helpful frame from the Opposition towards the Government, and I hope that the response from the Minister will reflect that.

I shall address the question of Amendments 7 and 51 and why the official Opposition have tabled them. We seek to question the Government about the extent to which the Treasury will consider our relevant international and European commitments when making designations. Based on the submissions made on the draft Bill and the issues raised by the Constitution Select Committee, have the Government considered whether the proposed legal framework for designation adequately encompasses our international commitments? In particular, have they considered whether it is appropriate to assess a licence on humanitarian grounds prior to invoking the asset freezing attached to any designation? That it should be an offence in the interim period for a person to provide the necessities of life appears to be directly at odds with the United Kingdom’s international commitments under UNSCR 1452, which relate to exceptions being granted for individuals designated under the asset-freezing regime to meet basic humanitarian needs.

I realise that in the previous amendment we discussed aspects of this issue, but I seek greater clarification from the Government on this matter. Would it not be desirable instead to introduce this step near to the beginning of designation, before its effect is felt, to ensure that the Treasury has in fact considered the appropriateness of the licence in every circumstance? We have great sensitivities about this issue with regard to licences. We all recognise the difficulties while at the same asserting, as my noble friend has been concerned to do in his earlier contributions, how we share with the Government the prime focus of this legislation, which is to protect our community and our people from acts of terrorism. Of course we do not want to infringe the capacity for that at all, but, given our international obligations, we want to look at how much these factors factor into the position when the Treasury looks at a designation order.

Our amendment would provide maximum flexibility because it would not prevent the Treasury from deciding that a licence was not appropriate in individual circumstances or from deciding later that a licence should be granted, varied or revoked. This includes situations where a designated person or a third person affected by designation applies to the Treasury for relief under the licence scheme. These are probing amendments, and I hope that the Minister will respond to them as constructively as he can.

On Amendment 10, the Opposition are concerned to be even more helpful. We cannot see the explicit power in the Bill to grant a licence. The Bill as drafted certainly allows the Treasury to vary or revoke a licence at any time, but there does not seem to be explicit provision for the Treasury to grant a licence. There are phrases about what a licence may contain and what it means once a licence has been granted, but we cannot identify a specific power. The purpose of our amendment, therefore, is a new clause to enable the Treasury to grant a licence. This would give legal effect to a licence so that it and any decisions made in reference to it could not subsequently be challenged in court.

Such is my respect for Treasury lawyers—indeed for the Treasury in all its aspects, from past experience—that I have no doubt that my anxieties in this respect are completely groundless. I hope that the Minister will be able to reassure me. If not, we will seek to press our new clause.

[Baroness Falkner of Margravine]

My name is on Amendment 48 along with that of my noble friend Lady Hamwee. Before I speak to it, I should say that Amendments 7 and 10 of the noble Lord, Lord Davies of Oldham, seem entirely reasonable, but in the absence of knowing what United Nations Security Council Resolution 1452 refers to, I will restrict my arguments to Amendment 48.

The intention behind our amendment is to clarify Clause 13 in order to improve accountability and increase transparency so that officials, as well as the designated person, are in a position to know how they go about setting the test for reasonable living costs, which is what we refer to in our amendment. Reasonable living costs will inevitably be a matter of subjectivity in a family due to their requirements. In ascertaining what reasonable costs are, our concern is how the Treasury will make that assessment. More importantly, should the assessment made not be one that, from the perspective of the designated person, fulfils their reasonable living costs? As I said, it is all rather subjective. How will they be able to challenge that and get a variance to the original order? How long would it take for that to be achieved? Again, if it were to take a cumbersome length of time, that would be quite an onerous obligation on the designated person.

--- Later in debate ---

[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—

[Baroness Falkner of Margravine]

I apologise to my noble friend for interrupting him in mid-flow, but I wanted to capture his previous sentence. As I understand it, there is nothing to prevent the Treasury from advertising on its website if we substitute the word “must” for “may”. The Treasury may still do so—and, I am sure my noble friend agrees, must do so—but we do not need the word “must” here.

[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.