Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) (Northern Ireland) Order 2024

Baroness Ritchie of Downpatrick Excerpts

Monday 2nd December 2024 Grand Committee

[The Minister of State, Home Office (Lord Hanson of Flint) (Lab)]

This debate relates to another statutory instrument that was debated in Committee on 11 November. I therefore will not go into too much detail on this instrument’s context but will briefly remind the Committee that it relates to the Economic Crime and Corporate Transparency Act 2023. This Act contained a wide range of reforms to reduce economic crime and increase transparency over corporate entities conducting business in the United Kingdom. This included reforms to enable targeted information sharing to tackle money laundering and remove reporting burdens on business. Additionally, the Act introduced new intelligence-gathering powers for law enforcement and reform of outdated criminal corporate liability laws.

The legislation also introduced reforms to keep pace with the use of emerging technologies to launder money and commit economic crime, including a new regime to tackle the use of criminal or terrorist crypto assets. The measure also introduced new search, seizure and detention powers when crypto assets are used illegally or for terrorist purposes. The legislation aims to remove criminal gains and disrupt the ability to use emerging technologies for illicit purposes.

I see a heavy Northern Ireland contingent here—it is like the old days, and I am very pleased to see colleagues here today. They will be particularly pleased to know that this debate relates to the order that came into force in Northern Ireland, as well as England and Wales. As of the end of October, across the United Kingdom as a whole the new powers have been exercised in over 90 cases.

I will not cover the content of the powers, as they were debated extensively by both Houses during the passage of the Bill, but will outline briefly the purpose of the instrument, which is to establish a code of practice. The code of practice being brought into operation by this statutory instrument is the search, seizure and detention of property code for Northern Ireland. Codes of practice determine and clarify the circumstances in which powers may be exercised to ensure that they are applied consistently and proportionately. This is vital, given the broad range of law enforcement agencies to which the powers can apply. The guidance on the exercise of the powers in the code in this order sets out clearly, I hope, the required powers to safeguard against improper use.

The search, seizure and detention code is made by the Home Secretary to guide the exercise of search and seizure powers in the context of criminal confiscation investigations for specified officers who operate in Northern Ireland. The order sets out the officers and the circumstances, and it gives strong guidance on reserved powers.

This draft instrument is required to complete the cycle that we started with the Economic Crime and Corporate Transparency Act 2023. It will ensure that all the necessary legislation is in place and that law enforcement can operate the powers proportionately and in accordance with the aim of the legislation. I expect and hope to get some questions from colleagues across the Committee, but I hope that that is a reasonably clear outline of the order and its purpose. I commend the statutory instrument to the Committee.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I declare my registered interest as a member of your Lordships’ Secondary Legislation Scrutiny Committee, in which we considered this SI in some detail. I welcome my noble friend to the Front Bench. We well recall him serving as a Minister in Northern Ireland; in fact, I succeeded him in the Department for Social Development and I remember the handover meeting very well. The following day, he went off to be a Minister of State here.

I welcome this statutory instrument. It is important that we move to a normal society in Northern Ireland, that the proceeds of crime are adequately addressed and that people refrain from crime in Northern Ireland, where we have the association of crime with paramilitarism. They are two scourges in our society that must be eliminated.

I have certain questions for my noble friend. While this is a reserved matter, the code is to be published by the Department of Justice in Northern Ireland. When will it publish the code, and will it be by way of a statement in the Assembly? Maybe there has already been one. Is an assessment available of the success of the Proceeds of Crime Act 2002 in Northern Ireland? I realise that will require a detailed answer, so I would be content if my noble friend could provide one in writing. I note that there is no impact assessment; can he indicate why? Will the police resourcing of the implementation of the code come out of the Northern Ireland block grant? There is a little difficulty there in that policing resources in Northern Ireland, in both funding and people power, are gravely overstretched.

[Lord Empey (UUP)]

My Lords, there is obviously a conspiracy here: the people running the Football Governance Bill have obviously decided to keep us all occupied here so that we are not dealing with them. Perhaps we should go into the Chamber later and see if we can make a contribution.

There are two sides to this: the devolved issue and the national issue. I want to explore the interface between the two and ask whether, as the noble Baroness, Lady Ritchie, mentioned, there is a resource implication. In other words, are any additional resources required? With crypto assets and so on, we are dealing with very sophisticated people who have access to complicated software and things like that. Are we capable of dealing with that as quickly as we can?

--- Later in debate ---

[Lord Hanson of Flint (Lab)]

I am grateful to the noble Earl for his support for the order, and I will return to his questions in due course. I am also grateful for the contributions from the noble Lords, Lord Empey, Lord Hay, Lord Browne, Lord Morrow and Lord McCrea, and the noble Baroness, Lady Ritchie. It feels like old times. I have not been a Minister in Northern Ireland since 2007. I had two fabulous years there, and it is good to see that scrutiny of government continues as it did when I was in Northern Ireland previously. It was good to hear the points that were raised.

I remind colleagues and noble Lords that the purpose of this order is to provide a code of practice to ensure that guidance is given, on a reserve basis, to officers who exercise the powers under the Act, in order to give proper accountability for the use of those powers by those officers. Colleagues and noble Lords will know that that includes scope on the search and seizure powers and limitations on the exercise of powers. It also provides for seeking senior officer approval and it gives reasonable grounds for suspicion, refusal of prior approval, limitation on the exercise of powers by immigration officers and a whole series of measures that are designed, in that code, to put a framework around the operation of the powers under the Act.

I will answer noble Lords’ points in a different order, but I hope we will cover them all. The noble Baroness, Lady Ritchie of Downpatrick, talked about the date of implementation and the discussion with the Northern Ireland Assembly, as well as the impact assessment and the impact of the Act. The Northern Ireland codes came into operation on 17 July 2024. Those codes have been published and are available. Northern Ireland ran a public consultation on its code and any citizen or organisation in Northern Ireland was able to comment upon this code. The codes in Northern Ireland have been approved by the Northern Ireland Assembly on a cross-party basis.

The noble Baroness mentioned the impact of the Act. From April 2014 to the end of October, 90 cases have been exercised with this new power. Those figures are for Northern Ireland, England and Wales. I am not able today to give her and others a breakdown of the particular usage in Northern Ireland, as opposed to England and Wales, but the powers have been used 90 times. Noting what the noble Earl and other colleagues said, I say that the purpose of this order is to ensure that we take action against people who wish to use cryptocurrency for illicit criminal purposes. The code we are discussing is about putting in place the framework so that the powers are not open to challenge, so that there is clarity about how they are used and so that, when they are used, individuals have the ability to challenge them—but there is a legal back-up to ensure that, when bad actors are doing bad things, they cannot wriggle out of those bad things by saying that those powers were used improperly. That is the purpose of this code. I hope that answers the points made by the noble Lords, Lord Empey and Lord Browne, and others, but, if not, please feel free to intervene. Again, these powers were subject to wide discussion and consultation generally.

The noble Lord, Lord McCrea of Magherafelt and Cookstown, particularly raised what happens to the assets when seized. I am pleased to tell him that, when a court has been satisfied that the crypto assets are the proceeds of crime or are terrorist crypto assets, the asset holder—whoever that may be—will be permanently deprived of those assets. They will be sold and the proceeds will go into supporting the compensation of victims—that is an important aspect, to make sure that victims are at the heart of this—or they could be retained by the state and reinvested into tackling economic crime and countering terrorism downstream.

We want to stop the type of activity that is taking place. Seizing assets means that people are still trying to get some assets through. Hopefully, we can get to a position where this is a deterrent as well and stops people wishing to act with these assets. But, in the event that they do, that they are convicted and that there is an asset recovery regime in place, those assets will be used for the wider community at home.

A number of noble Lords asked about the impact assessment. We produced an impact assessment on the legislation, which was assessed and went through a number of routines—including on 11 November in this Room—and we finalised it very recently. I point out to the noble Earl and others that there is cross-party support for the legislation. It would have possibly gone through earlier had we not had the great event of the general election in July, which has propelled me from a quieter life back here. It also meant we had some delay in our cross-party discussions and agreements on the legislation.

We did not have a specific impact assessment on the powers in the code, but I hope they have been established in the way they have so that they can be operated and safeguarded. There was a consultation, which has come forward, although there was no impact assessment.

Another point noble Lords mentioned is the confiscation regime, which is largely for the Northern Ireland Assembly and devolved matters. I am repeating myself, but it is important to reflect on what we are discussing: the code is about how UK officials in immigration, Border Force or other named organisations in the code are held to account by a standard set by this House, the House of Commons and the UK Government on those devolved areas.

I think the points the noble Earl mentioned have been covered; if not, I am happy to reflect on Hansard in due course and any points that have been made by noble Lords and try to refer back to them. However, I think and hope there is a co-terminosity of agreement between us in this House, from His Majesty’s Official Opposition through to the Ulster Unionist Party, the Democratic Unionist Party and the SDLP in Northern Ireland.

We are trying to ensure that crypto assets under this legislation are deterred and, if they are found to be used for criminal activity, seized. There is a code of practice that monitors the use of officers for seizing those assets. If those assets are seized for criminal purposes, they are wound back into the community in a positive way. That sends a signal to both sides of the border in Northern Ireland in relation to the Administrations there that the use of crypto assets is not an acceptable way of financing criminal activity or terrorism.

I will check this outside of the Committee, but to answer the noble Lord, Lord Hay, there has not been any formal consultation with the Irish Government on these powers because they are for the Northern Ireland Assembly, under the joint leadership of the First Minister and the Deputy First Minister, the Justice Minister and the Home Office, under the leadership of my right honourable friend the Home Secretary. However, I believe they are not areas that would cause concern as they are entirely matters for within the confines of the United Kingdom, with different responsibilities between the two different agencies.

With that, I hope the Committee can accept the order. If I missed any points, I will reflect on Hansard and write. If anybody wishes to intervene on any point I have not made, please do so now. I can see my noble friend Lady Ritchie ready to bungee jump into action, so I will let her intervene.

[Baroness Ritchie of Downpatrick (Lab)]

I thank my noble friend the Minister for his very detailed answers. Could he indicate whether any discussions have taken place with the Minister and the Department of Justice in Northern Ireland? If not, will they take place on the implementation of the code and this SI?

[Lord Hanson of Flint (Lab)]

As the Minister responsible for this order, I have not had any discussion with Naomi Long or the Department of Justice on these matters, but I hope it will give some confidence to my noble friend to know that it is my intention to meet our counterparts in Northern Ireland. My right honourable friend the Home Secretary has, I believe, already met the First Minister and Deputy First Minister, and I intend to do the same. I have a potential visit to Northern Ireland planned for the new year to discuss areas of mutual co-operation. I will make sure that this issue is raised as one of many items on the agenda of any future meeting in January. With that, I commend this order to the Committee.