Sanctions (EU Exit) (Consequential Provisions) (Amendment) Regulations 2020

Lord Ahmad of Wimbledon Excerpts

Thursday 29th October 2020 Lords Chamber

Moved by

[Lord Ahmad of Wimbledon]

That the draft Regulations laid before the House on 16 September be approved.

[The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, before I introduce this SI debate, I want to express on behalf of my right honourable friend the Foreign Secretary his response to the horrific events in France today. He issued the following statement:

“The United Kingdom stands with France today in sorrow, shock and solidarity at the horrifying events in Nice. Our thoughts are with the victims and their families, and we offer every support to the French people in pursuing those responsible for this appalling attack.”


I am sure those sentiments resonate with everyone in your Lordships’ House.

I turn to the instrument before us. It was laid on 16 September under the powers provided by the Sanctions and Anti-Money Laundering Act 2018. It will aid the investigation and prevention of terrorist financing; prevent designated persons acting as charity trustees and managing or operating sensitive financial enterprises; and enable the effective implementation of legal, operational and regulatory measures for combating terrorist financing.

We have also laid alongside this draft instrument a Section 46 report. The report is required when new regulations are made under Section 45 of the sanctions Act to amend sanctions regulations made for a discretionary purpose under Section 1 of the sanctions Act. The report details why I consider that the relevant conditions, set out in Section 45 for the use of this power to make amending regulations, are met.

The purpose of the instrument is to add new provisions to three existing 2019 regulations relating to counterterrorism sanctions. These new provisions in the 2019 regulations will in turn make amendments to several other pieces of primary and secondary legislation to replace and update references to counterterrorism sanctions legislation. That needs to be done to ensure that the new counterterrorism sanctions framework established by the 2019 sanctions regulations delivers substantially the same policy effects as the existing sanctions regimes after the end of the transition period.

The three regulations amended by this instrument, collectively known as the 2019 regulations, are the ISIL (Da’esh) and Al-Qaida (United Nations Sanctions) (EU Exit) Regulations 2019, made on 5 March 2019; the Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019, made on 14 March 2019; and the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019, also made on 14 March 2019. The provisions of primary legislation that will ultimately be amended by the 2019 regulations as a result of the amendments made by this instrument are Section 49(3) of the sanctions Act and Section 178 of the Charities Act 2011.

I shall provide further details: Section 49 of the sanctions Act confers a power on the appropriate Minister to make regulations for the purpose of enabling or facilitating the detection, investigation, or prevention of terrorist financing. This will, for example, enable the Government to amend or update the existing Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which currently include measures to tackle terrorist financing.

Section 49(3) defines “terrorist financing” by references to other pieces of legislation. The amendments made by this instrument will remove references to offences under regulations being revoked by the 2019 regulations and add references to new offences under the 2019 regulations. That will ensure that the definition of “terrorist financing” is up to date and can be used in reference to current legislation. It also means that Her Majesty’s Government can use the power in Section 49 of the sanctions Act to facilitate the prevention, detection or investigation of terrorist financing, following the revocation of a number of the current offences by the 2019 regulations.

Appallingly, there are occasions when charities are abused for the purpose of financing terror. To reduce the risk of such abuse occurring, Section 178 of the Charities Act 2011 disqualifies individuals who present a known risk from serving as a charity trustee or a charity senior manager—that is, the chief executive, finance director or their equivalent. The amendments made by this instrument will remove references to persons designated under regulations being revoked and add references to persons designated under any of the 2019 regulations.

I am sure many noble Lords will agree that this is a technical update to ensure that legislation on charities and financial services can continue to deliver the same policy effects after the end of the transition period. It will prevent those designated under these sanctions regulations being able to act as charity trustees or charity senior managers.

The amendments to the Electronic Money Regulations 2011 and Payment Services Regulations 2017 prevent the registration of a small electronic money institution or a small payment institution where any of the individuals responsible for the management or operation of the business have been convicted of an offence under the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019. This prevents persons convicted of terrorist financing offences managing or operating these sensitive enterprises.

The consequential amendment to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 provides that the definition of “terrorist financing” used in those regulations refers to the new offences in the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019. This amendment will ensure that the Government are able to continue to promote the effective implementation of legal, operational and regulatory measures for combating terrorist financing once the 2019 regulations are in force. The instrument represents the first use of the powers under Section 54(3) and (4) of the sanctions Act to amend the definition of “terrorist financing” in Section 49(3) of the sanctions Act. It will not come into force until a later date or dates to be appointed separately.

This instrument thus forms a necessary part of the programme of work being undertaken by the Foreign, Commonwealth & Development Office in conjunction with other Whitehall departments to construct an effective and robust UK sanctions framework under the Sanctions and Anti-Money Laundering Act 2018. The counterterrorism sanctions framework includes financial, trade and immigration sanctions. It is a key element of the UK’s counterterrorist financing strategy and remains a major disruptive and preventive tool in the global fight against terrorism. We will continue to work closely with our Five Eyes and other international partners to help combat threats to the international financial system and the charity sector.

The United Kingdom, let me assure noble Lords, is working closely with the Financial Action Task Force, the G20, G7 and EU partners to disrupt terrorist financing. There is a particular focus on: reducing domestic terrorist fundraising; the movement of terrorist finance across borders; and the fundraising and movement of terrorist finance overseas. International counterterrorism sanctions regimes are an essential, practical weapon in disrupting terrorism. They also demonstrate international resolve.

The UK has a strong reputation for tackling terrorism, supported by our robust legislative framework. We will of course continue to strengthen our approach to countering terrorism by ensuring we have the correct range of disruptive tools and capabilities at our disposal, including our sanctions and counterterrorist financing frameworks. This instrument will ensure that these remain functional and effective. I beg to move.

--- Later in debate ---

[Lord Ahmad of Wimbledon (Con)]

My Lords, I thank all noble Lords for their contributions and for their support for these regulations. I join with other noble Lords in warmly welcoming the noble Baroness, Lady Hoey, and in congratulating her on her excellent speech. We learned from my noble friend Lord Balfe of her connections with Tottenham Hotspur. I am sure we shall have animated debates, as I am a Liverpool fan—the accent is a bit of a giveaway. She will be an incredibly powerful contributor to our debates. Her speech today showed important insights into the detail of the subject matter being discussed. I often describe your Lordships’ House as a place of wit and wisdom. Knowing the noble Baroness, I am sure she will make high-quality contributions on both these fronts.

I also welcome the contributions and support of other noble Lords in this important debate. I totally concur with the noble Baroness, Lady Northover, and the noble Lord, Lord Collins; it will be no surprise if I repeat something that I have said to them both within and outside the Chamber. I agree that sanctions and their application—whether in the context of counterterrorism or any other area—work effectively only when they are taken in lock-step with other key partners.

I want to pick up specifically on some of the key points raised by the noble Lord, Lord Bradshaw, my noble friend Lady McIntosh of Pickering and the noble Baroness, Lady Ritchie. Existing regulations will continue to operate and apply to the UK during the remaining part of the transition period. We continue to work with the EU and member states to ensure that all EU sanctions are implemented and enforced. The noble Lord, Lord Collins, also raised these issues. We are working closely with our European partners, not just on sanctions but in other areas as well. Specifically, on sanctions, I am in constant touch with my opposite numbers within the European Commission. We also have discussions with leaders and representatives of other Governments within the EU. As recent alignment has shown, we work closely on matters of international co-operation, particularly through the E3 mechanism.

The noble Lord, Lord Collins, asked about the United Nations and our priorities there. He will know that there is a particular Under-Secretary-General responsible for counterterrorism. I am in discussions with our representatives in New York to see how we can further strengthen the UK’s broad interests. I will take into account the noble Lord’s suggestions on how we move forward in this area. The sad events in France once again indicate the vulnerability of dealing with such acts. My noble friend Lady McIntosh made the point about people who operate using new channels of communication. I agree with her—we need to be one step ahead. The terrorist mindset is always looking at new and innovative ways to challenge and defeat those who unite against extremism and terrorism. As events have shown, this remains a live issue. We send our condolences to the families of those attacked in France today. We have learned that the attack happened in a church—a place of worship. Any terrorist attack is appalling, but this compounds the impact.

I am grateful to my noble friend Lord Balfe and welcome his support and that of the noble Baroness, Lady Ritchie, for these regulations. I can assure them again that we shall work closely with EU counterparts. On UN sanctions, we work internationally. I pre-empted a question from the noble Baroness, Lady Northover, when I mentioned international partners, by alluding specifically to the European Union. Now that we have left the European Union, it will be important for us to continue to align ourselves with liberal democracies across Europe. That sends a powerful message on sanctions and other areas of work.

I was not surprised by a couple of the references from the noble Lord, Lord Hain—I somewhat expected them. The noble Lord, Lord Collins also asked about corruption, particularly in the context of the Magnitsky sanctions. I can assure both noble Lords and the House that we are considering how a corruption regime can be added to our current armoury of legal weapons. The Magnitsky global human rights sanctions are an obvious one. I can also assure the noble Lord, Lord Collins, that we are looking specifically at the framework of the UN Convention against Corruption and I have had meetings to this effect. We are also looking at other jurisdictions such as the United States and Canada which already apply these sanctions. As details emerge, I will share them with your Lordships’ House.

The noble Baroness, Lady Jones of Moulescoomb, in her customary way, raised a number of questions about illegitimate regimes which may seek not to take on board the sanctions being applied. It depends on the situation as to whether sanctions are likely to be effective in achieving our foreign policy aims. The global human rights sanctions are a good example in that they specifically target movement and financing. These are powerful tools, even if an individual or an existing regime somewhere in the world does not accept them. Acting first and foremost as the UK but also in partnership with other countries adds to the strength and application of such tools.

The noble Baroness also referred to the US elections. The United States is a strong friend and ally—it is also a robust democracy. We await the outcome of their elections. The systems in the United States are robust enough to provide an outcome which is both acceptable and legitimate. The strength of a democracy lies in its own operation. It is not for me to comment on the outcome of those elections, but I believe the US is and will remain a vibrant and strong democracy, underpinned by the rule of law.

I thank my noble friend Lady Gardner for her support. She referred to Section 49 as an important part of the Government’s approach in laying these regulations.

The noble Baroness, Lady Hoey, asked about Libya. We are working to have the Libya regime and accompanying guidance ready for the end of the transition period and will provide details of it. I also take on board her important references to the communities in Northern Ireland who have had to endure challenges of their own. We stand in solidarity with all those who have been victims of any kinds of atrocities.

I wish to thank all noble Lords again for their important and supportive contributions. It is not often that I can stand at the Dispatch Box and universally thank every single contributor for their strong support of the Government’s approach. On this occasion it is most welcome. This instrument underlines our common objective to support and protect the United Kingdom and the international financial system, as well as the charity sector to which the noble Baroness, Lady Northover, referred. I can assure her that we work closely with the Charity Commission. Charity law disqualifies certain individuals from being a charity trustee, as set out in the Charities Act 2011. These regulations tie these important pieces of legislation together. I assure her that we look very closely at the work of the Charity Commission, particularly with regard to those NGOs operating in the international sphere.

These regulations will also ensure that the range of disruptive tools and capabilities at our disposal, including our sanctions and counterterrorism financing framework, remain effective. It will aid our global fight against terrorism and contribute to the UK being an even stronger force for good in the world.

Finally, in her maiden speech, the noble Baroness, Lady Hoey, talked of the celebrations in Northern Ireland in 2021. I am sure I speak for all noble Lords here, and beyond, when I say that we look forward to joining with her and other noble Lords in those celebrations. The noble Baroness described it as a “wee country”; I am sure we all regard it as an important country which defines the modern United Kingdom. I beg to move.

Motion agreed.