Hong Kong: Pro-democracy Activists

Debate between Lord Ahmad of Wimbledon and Lord Pannick

Wednesday 10th April 2019 Lords Chamber

[Lord Ahmad of Wimbledon]

I agree with the noble Baroness that we all remember Lord Ashdown for a variety of reasons and this is one of those occasions. On the specific issue that she and the noble Lord raised about extradition, yes, we are acutely aware of the proposed change to legislation. We are fully considering the implications of that and how it may impact UK citizens and, in particular, as the noble Baroness said, people operating within the business community. In that regard, the British consul-general in Hong Kong has spoken to senior figures in the Hong Kong Administration to seek clarity on what the proposals will mean, particularly for UK citizens, and we continue to make a case to them. It remains the United Kingdom’s view that for Hong Kong’s future success it is essential that Hong Kong enjoys—and is seen to enjoy—the current autonomy under the agreement that was signed not only by the United Kingdom but by the Chinese Government.

[Lord Pannick (CB)]

My Lords, in the light of those questions, will the Minister emphasise that those who have been convicted have the right of appeal; that the basic law protects the independence of the judiciary; and that, in practice, the Hong Kong judiciary is as independent as any judiciary in the world? I declare an interest as a frequent advocate in the Hong Kong courts both for and against the Government of Hong Kong.

[Lord Ahmad of Wimbledon]

My Lords, the noble Lord speaks with immense expertise and experience in this regard. I can assure him on all three of those statements in terms of the autonomy and independence of the judiciary. Since this agreement has been in place over the past 30 years, there has been only one occasion, in 2016, when we had formally to call out a lack of adherence to the principles of the treaty. He asked about the right of appeal. The people who have been convicted are currently out on bail. Sentencing is due on 24 April and they will have 28 days thereafter to lodge a formal appeal.

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord Pannick

Ping Pong (Hansard): House of Lords
Monday 21st May 2018 Lords Chamber

[Lord Pannick]

I am very disappointed—at other noble Lords are—at the approach of the Government. All these points were fully debated at Second Reading, in Committee and on Report, and the constant theme across the House was that it was vital to constrain the powers that Ministers were giving themselves in relation to the Bill. The Minister was very receptive to those concerns and accepted a number of amendments, and it is therefore very disappointing that at this very late stage we see again the same vice. So I share the disappointment and regret that, given the stage we are at, it is too late to do anything about it. But I hope that the Minister will take back to his department our concern and the promise—it is not a threat—that, if similar powers are put before us in another Bill, no doubt noble Lords will have more to say about it.

[Lord Ahmad of Wimbledon]

My Lords, I thank noble Lords for their comments on this amendment and, of course, I have noted what all noble Lords said and the concerns they expressed. Let me assure them once again—I mention in particular the noble Baroness, who mentioned Amendments 11 and 12—that I will address specifically the powers of the Minister, and give the assurance once again that a detailed response will be provided to the Delegated Powers Committee. I am seeking to ensure that this response will be provided before the Recess.

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[Lord Ahmad of Wimbledon]

My Lords, we now come to the important issue of criminal offences. This group of amendments would allow powers in the Bill to be used to create criminal offences and penalties in regulations for both sanctions and money laundering breaches, subject to new safeguards.

I say at the outset that I recognise that your Lordships’ House had serious concerns about the inclusion of these powers, and the noble and learned Lord, Lord Judge, in particular, remains very concerned. I assure all noble Lords that once the Bill left your Lordships’ House we continued to listen to those concerns and have sought to address them. That is why these amendments also include an important new procedural safeguard of a requirement to report to Parliament, meaning that the Government have to inform Parliament specifically about the use of the powers to create criminal offences in secondary legislation. This is intended to enable Parliament to be better informed about the use of these powers and to be able to properly hold the Minister to account.

I shall go through each of the amendments in more detail. Amendments 9 and 21 restore the ability to provide for criminal offences and penalties in sanctions and money laundering regulations. In tabling these amendments, I acknowledge your Lordships’ recognition of the importance of rigorous anti-money laundering and sanctions regimes. In order to ensure the robustness of future sanctions and anti-money laundering regulations, corresponding powers to create criminal offences for breaches of those future regimes are necessary so as to preserve the ability of future Governments to impose effective and dissuasive sanctions for breaches of regulations.

I recognise that some in your Lordships’ House had concerns about the scope of these powers when the Bill was first introduced. These amendments address those concerns through additional safeguards, which must be met before the powers can be used. When I come to Amendments 31, 32 and 34, I shall elaborate upon the safeguards, which the Government have discussed with noble Lords since the Bill’s passage through this House.

The amendments restore our ability to enforce sanctions. As noble Lords are aware, sanctions are used to prevent serious threats to national and international peace and security. It is therefore right that breach of them is a criminal offence, and it is also right that penalties should be set at a level that acts as a proper deterrent for these serious crimes. The Bill gives us the ability to set penalties at up to 10 years’ imprisonment, but that does not mean that we will set them at the maximum in every case.

In respect of trade sanctions, offences for breaches of prohibitions made under the Export Control Act 2002 all have maximum penalties of 10 years’ imprisonment. That does not apply to the trade sanction prohibitions created under the European Communities Act 1972, which are capped at two years’ imprisonment, despite the breaches being just as serious a matter. This Bill will enable us to remedy that disparity by harmonising maximum penalties for breaches of all trade sanctions at 10 years.

Currently, breaches of financial sanctions can be punished by up to seven years’ imprisonment, and we plan to continue to set penalties at this level for financial sanctions. We also plan for breaches of other sanctions, such as transport sanctions, to have penalties set to match this level. There will also be offences, such as the failure to provide information when required to do so by law, that require lesser penalties, such as up to two years’ imprisonment, and we do not plan to increase penalties in those areas either.

I have set out in previous debates how the enforceability of new regulations would be seriously weakened without the power to create criminal offences, and how it is not unusual for requirements in delegated legislation to be enforced using criminal penalties. I now turn to the procedural safeguards we have introduced, which I hope will constitute sufficient reassurance to noble Lords who have expressed concerns.

Amendments 10, 25 and 32 introduce the important safeguard of requiring the Government to lay a report before Parliament whenever criminal offences are created or amended in sanctions regulations made under Clause 1 or in anti-money laundering regulations made under Clause 43. The amendments require the report to be laid at the same time as the regulations are laid or when the draft statutory instrument containing the relevant regulations is laid, depending on which parliamentary procedure is used. The report will facilitate effective parliamentary scrutiny of future use of criminal offences in sanctions regulations and goes further than the status quo in enabling Parliament to scrutinise the creation of criminal offences through sanctions or money laundering regulations.

The amendment specifies what elements should be included in these reports. Specifically, this will include: first, the details of the offences that have been created and the requirements to which they refer; secondly, the good reasons why a breach of these requirements should be enforced via criminal offences; thirdly, the maximum prison terms for any offences created which are punishable by imprisonment; and, fourthly, the reasons why those maximum terms have been set at the level they have. I trust noble Lords will agree that these reports will provide increased transparency as to the reasons for creating future criminal offences, and so give both Houses of Parliament a new and solid basis for holding the Government to account on the use of these powers when debating regulations made under the Bill. Nevertheless, the Government remain very aware that creating criminal offences and setting penalties in regulations is a serious matter and not one to be undertaken lightly. We hope that these amendments address that.

I would also like to take this opportunity to assure your Lordships’ House that the requirement contained in Amendment 25—for a Minister, when for whatever reason a report is not laid on time, to make a statement about that failure to the House—does not in any way circumvent the obligation to make the statement. It is an additional requirement, meant to create a further obligation to Parliament that if, for example, there has been some administrative error in publishing a statement, Ministers must provide an explanation to Parliament for that failure.

Amendment 31 is consequential to new paragraph 20A inserted by Amendment 32. The envisaged paragraph 20A(1) of Schedule 2 clarifies the scope of potential offences created for the purposes of the enforcement of requirements imposed by or under regulations under Clause 43.

Amendment 32 also makes the power to create criminal offences in money laundering regulations subject to the requirement for a report to Parliament along the same lines as the amendments for Part 1 of the Bill. This amendment clarifies that the scope of the power for creating future offences is restricted to offences for the purposes of enforcing future anti-money laundering regulations. It is both necessary and, importantly, proportionate.

Amendment 34 ensures that references made to regulations made under Clause 43, with respect to paragraph 15 of Schedule 2, and requirements imposed by regulations made under Clause 43, with respect to paragraph 20A of Schedule 2, also include reference to or requirements imposed by the Money Laundering Regulations 2017. This amendment ensures that new money laundering offences can be created by amending the Money Laundering Regulations 2017. It will therefore enable the Government to create new offences in order to respond, for example, to emerging risks identified by the national risk assessment of money laundering and terrorist financing, which was published in October of last year, or in response to the ongoing review by the Financial Action Task Force of the UK’s anti-money laundering and counterterrorist finance regime. I beg to move.

[Lord Pannick]

My Lords, in the early stages of this Bill, my noble and learned friend Lord Judge, who is not in his place, expressed the concerns that many of us felt about Ministers being given a power to create new criminal offences and, indeed, to specify maximum sentences. I am very pleased that the Government have recognised a need for safeguards in this context. This is an exceptional circumstance, and I very much hope that the Government will not see this as a precedent to be used in other contexts.

[Baroness Northover]

My Lords, the potential creation of new criminal offences by Ministers was of course the subject of major debate in the Lords, and the Government were defeated. It is the Government’s compromise that we are considering here. I know that the Government and the noble and learned Lord, Lord Judge, spent a great deal of time on this, as did my noble friend Lady Bowles. Noble Lords did not quite get to where they would have liked, but I know that they thought progress had been made. We are therefore content to accept the position that we have reached. However, the noble Lord, Lord Pannick, makes an important point about this not being a precedent.

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord Pannick

Report: 1st sitting: House of Lords
Monday 15th January 2018 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, once again I thank the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, for their constructive engagement on understanding and then coming forward with appropriate amendments in this regard.

The group of amendments in front of us focuses upon the description of persons who can be subject to sanctions by way of sectoral sanctions and individual designations. Before I come to the main thrust of the amendments—and I use this term advisedly, notwithstanding the contribution of the noble Baroness, Lady Northover—there are two technical government amendments to Clause 2. These amendments will ensure that sanctions regulations can prevent the procurement of funds or economic resources, as well as receiving such funds or economic resources. This will help prevent sanctions being evaded and thus improve their overall effectiveness, which I know is the intent of all noble Lords in respect of the Bill. I hope that this small and technical change will be deemed non-controversial, and would be grateful if your Lordships would support the amendments and enable us to further enhance the Bill’s provisions.

I turn to the amendments tabled by noble Lords, which seek to stop the Government from being able to impose sanctions on persons “connected with” a prescribed country. As I have assured your Lordships during previous stages of the Bill, while I understand the concerns in this respect, I believe the Government have acted to address them where we can and there are good reasons why these provisions are needed. I totally understand the concern raised by the noble and learned Lord, Lord Judge, in Committee that a Minister would be able to define the connection to a country by regulations, and do so in ways that were unacceptable. I assure him that there are safeguards to prevent this power being misused.

As set out in the Bill, sanctions measures can be made in line only with the purposes for regulations set out in Clause 1. The definition of “connected with” must therefore be appropriate for the pursuit of the said purpose. It would not be reasonable or appropriate to create sanctions measures relating to persons that have only a very loose connection with a sanctioned country.

The noble and learned Lord, Lord Judge, said in Committee that it surely makes sense for the Government to define connection now, in primary legislation, rather than at some point in the future. We have considered this suggestion carefully and looked at a couple of types of possible approaches in this respect. The first approach would be to list the connections that sanctions currently impose, but this poses two problems. First, the list would be very long, as there are a great deal of different types of connections. Secondly, an exclusive list would not give us the flexibility that we will need in future when new types of connections need to be made. It is worth remembering that the context of international policy is changing rapidly. This is perhaps best typified by the sanctions regime on North Korea, which has changed three times in the last six months alone. We do not know how much further we will be obliged to act on North Korea; unpredictable world events could make it necessary to have new regimes with measures of increasing complexity.

We also considered whether it might be possible to restrict the power by making sure that certain types of loose connections could not be specified. Again, the vast number and shifting type of these connections make drafting such provisions prohibitively difficult. The situation also changes in each case. I agree with the noble and learned Lord, Lord Judge, that a connection based on familial connection might be very loose and unjustifiable in many circumstances, but in the context of misappropriated wealth spread through the close family of a former head of state, such a connection might be required. I therefore request noble Lords not to press their amendments in relation to connected persons for the reasons that I have given.

On designation by description, I have listened closely to the concerns of noble Lords who spoke in Committee, including those about the practical difficulty that this would present for banks and others responsible for complying with such sanctions. I noted in Committee that it is important for the Government to have the power to designate by description in some circumstances, such as where we do not have the names of members of a terrorist group. I have accordingly sought to strike a balance here by placing restrictions on the use of this power to ensure that it can be used only in limited circumstances.

Based on the debate in Committee, I have tabled government Amendments 33 to 35 to ensure that the use of this power is tightly constrained, as the noble Lord, Lord Pannick, acknowledged. With this amendment in place, the Government must impose sanctions on an individual by name if we have access to their name, as the power to designate by description cannot be used when we do. The description must also be sufficiently detailed that a person can apply it to themselves and decide whether they are subject to sanctions. For example, if we wished to sanction all Ministers of a certain state, we would designate as many as possible by name and would then be able to designate any others of unknown name by the description “Ministers of that state”. A Minister of that state will clearly know that the sanction applies to them, and UK persons, such as banks, will be able to ascertain the position in relation to their own business dealings. This enshrines the Government’s commitment to use this power only when it is not practicable to designate by name, thus easing the compliance burden on industry. I thank the noble Lord, Lord Pannick, for his acknowledgement of the government amendments in this respect.

The noble Lord, Lord Hain, raised a specific issue relating to the work of Hogan Lovells for the South African Revenue Service. The noble Lord has raised various matters during the passage of the Bill, and I am grateful to him for bringing this information to our attention. I assure the noble Lord that, on this matter and the matters he has raised previously, the Government continue to be concerned about the allegations of corruption in South Africa. I further assure him that the British high commission continues to monitor this issue very closely. As the noble Lord said, he has already brought this issue to the attention of the Solicitors Regulation Authority and awaits its reply. Once he has heard from it on that subject, any correspondence could be copied to the Government, although I am sure we will already be informed. It has been helpful to have his interventions in this respect.

We have listened very carefully to the various elements and concerns raised in Committee. I once again thank noble Lords for their engagement in reaching the position that we have on these amendments. As I said at the start of Report, and during Committee and Second Reading, the guiding principle that I have adopted in this regard is that I believe very passionately that legislation is not just made more effective and more practical but enhanced in your Lordships’ House. Through the co-operation we have had on this group of amendments, we have seen that level of constructive engagement.

On the basis of that explanation, I hope I have been able to persuade all noble Lords to support the government amendments and would ask them to withdraw or not move their amendments.

[Lord Pannick]

I am very grateful to the Minister, who has shown exemplary constructive engagement throughout discussions on the Bill. I am sure all parts of the House are very grateful to him and the Bill team for that.

Amendments restricting Ministers’ powers to designate by description are far from technical, and I simply point out one matter in response to the Minister. I think he suggested that, in relation to government Amendment 34, the issue would be whether the individual himself or herself would be able to identify from the description whether they were covered. In fact, government Amendment 34 goes a lot further than that, because the test under it is whether, from the description, a reasonable person would know whether the individual falls within the description. That is the test. But I am very grateful to the Minister and beg leave to withdraw Amendment 10.

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord Pannick

Report stage (Hansard - continued): House of Lords
Monday 15th January 2018 Lords Chamber

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

My Lords, I thank all noble Lords again for their constructive engagement on this group of amendments. The government amendments I have tabled have been heavily influenced by the discussions we have had. Amendment 28 would require regulations to include provisions on notifying a person once designated and how to publicise designations. I am happy to say that government Amendment 27 does exactly that. When a person has been designated, or had their designation varied or revoked, the Minister must, without delay, take such steps as are reasonably practicable to inform the person. Sanctions regulations may also include further provision as to the specific arrangements for notification or publicity. In this regard, I am extremely grateful to the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, for their assistance.

Amendment 29 would require a person to be informed of their designation and to be given the fullest possible account of the reasons for designation and the steps required to address the concerns. Amendment 30 covers similar ground, while also requiring that the designated person be given the evidence underlying the designation or a gist of any evidence that is withheld for reasons of national security. In response, government Amendments 32, 37 and 59 make provision across the Bill to provide a statement of reasons to designated persons. When a person is designated, the Government will be obliged to provide a statement of the matters that the Minister knows, or has reasonable grounds to suspect, have led to the designation. I am sure noble Lords will appreciate that the Minister’s statement may exclude some matters, for reasons which I know noble Lords will understand and respect, such as when it is in the interests of national security. If a challenge is made in court, on those rare occasions when sensitive information is used to underpin a designation, the closed material procedure will apply. The courts, such as in the case of AF (No. 3), have long required the gist of sensitive material to be disclosed to enable an individual to understand the case against them. We accept that this is and will continue to be the case and the Bill does not seek to make any changes to the existing disclosure burden on the Government in such cases.

Amendment 38 would insert a new clause into the Bill requiring the appropriate Minister to exercise the power to designate only to the extent that it is proportionate to do so, having regard to the purpose of the designation and the impact on the person concerned. The government amendments I have tabled in response—Amendments 31, 36 and 58—use very similar language. They would require Ministers to consider that a designation is appropriate, having regard to the purpose of the regulations and the likely significant effects of the designation on the person concerned. I am again grateful to the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Judge, for supporting these government amendments. While there seems to be a meeting of minds on this important issue, it may also be helpful if I briefly explain the thinking behind the Government’s revised language.

First, the European Convention on Human Rights entrenches individual rights, obliging the Government to consider the impact on an individual’s rights when making certain decisions. Section 6 of the Human Rights Act 1998 further ensures that the appropriate Minister must act in line with those convention rights, as informed by Strasbourg case law. We consider that this includes satisfying himself that the designation is proportionate, where convention rights are engaged, and I have been clear on this in relation to this Bill, including in Committee. Secondly, given that the Human Rights Act already requires proportionality to be considered where convention rights are engaged, a court might interpret the use of the word in the Bill to mean something different. Our amendments have tried to preserve the spirit of the intention underlying this amendment, without creating any difficulty of interpretation. As a result, the government amendments provide for a balancing test for designations between the purpose of the regulation and the impact on the individual, while avoiding an explicit reference to “proportionality”.

Amendment 50 requires the Government to provide specific guidance produced by the Crown Prosecution Service about the prosecution of sanctions breaches. The Government wholeheartedly support and have publicly committed to producing clear and accessible guidance on sanctions implementation and enforcement, both in this House and throughout our consultation on the White Paper. The Crown Prosecution Service already publishes guidance on how the public interest is taken into account in any decision to prosecute and this test is the same one that will be applied in decisions to prosecute sanctions offences. The procurator fiscal in Scotland and the Public Prosecution Service for Northern Ireland publish similar guidance. The Government’s view is that no additional public interest guidance is necessary simply for a sanctions prosecution decision.

The Bill will provide for the Government to issue guidance on the content and implementation of sanctions. Clause 36 requires Ministers to issue guidance about any prohibitions and requirements imposed by sanctions regulations. There will be a mandatory requirement to provide comprehensive guidance for all those affected by sanctions implementation. Clause 36 is a more comprehensive duty than that specified in the amendment to Clause 16 which I have said is unnecessary. It has been drafted so as to allow comprehensive guidance on all sanctions prohibitions and requirements to be prepared and consulted on by the appropriate sources of expertise. For financial sanctions, the Office of Financial Sanctions Implementation has already published a comprehensive guidance document setting out its general enforcement approach. This will be fully updated to reflect the new sanctions Bill regime.

Amendment 53 requires the Minister to respond,

“as soon as reasonably practical”

to a request to vary or revoke a designation. Government Amendments 56 and 61 are fully in line with this proposal.

Finally, government Amendments 51, 52, 57 and 60 make technical changes consequential on these changes, and I hope they will be accepted. I beg to move.

[Lord Pannick (CB)]

My Lords, I have tabled, with the support of the noble and learned Lord, Lord Judge, the noble Lord, Lord Collins of Highbury, and the noble Baroness, Lady Northover, a number of amendments in this group on the subjects of procedural fairness and proportionality. The Minister acknowledged in Committee that these were topics that he and the Bill team would need to consider before Report. Given the adverse consequences of being designated, the Bill must provide for procedural fairness and the provisions must be applied in a proportionate manner. Again, I thank the Minister and the Bill team for some very helpful meetings on these subjects, and for tabling these amendments, which address my concerns.

In particular, government Amendments 31, 36 and 58 will require the Minister to be satisfied that any designation is appropriate, having regard to both,

“the purpose of the regulations … and … the likely significant effects of the designation”,

on the person concerned. That addresses the substance of my Amendment 38 on proportionality. It does not use the word “proportionality” but that does not matter. It contains the essence of proportionality and I am grateful to the Minister for confirming in his opening remarks that that is indeed the purpose of these government amendments.

Government Amendments 32, 37, 59 and 61 are also very important in placing in the Bill a requirement of procedural fairness; that is, that the person designated is entitled to a statement of the reasons why he or she has been designated. That is absolutely fundamental to any fair sanctions procedure. I recognise that the government amendments exclude any right to information the disclosure of which would harm interests such as national security, but they rightly provide that these exclusions will not allow the Minister to provide no statement of reasons. I would be grateful if the Minister could confirm that the intention here is to ensure that a person who is designated will always be entitled to at least a statement of the essence of the reasons for the designation, albeit that details which affect national security or other protected interests cannot be disclosed.

In the light of these government amendments, I am satisfied that the Bill now makes it clear that procedural fairness and the substance of proportionality are part of the administrative machinery. The Minister made it clear in Committee that this was always the intention and he made it clear—and I respectfully agree with him—that the courts would in any event hold Ministers to such basic standards of the rule of law. I am pleased that the Minister has recognised that it is appropriate to include these matters in the Bill and I thank him.

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[Lord Ahmad of Wimbledon]

My Lords, I thank the noble Lord for his amendment. As he has already indicated, it would oblige the Government to conduct a re-examination of each designation on an annual basis. I agree completely on the need for sanctions designations to be based on solid evidence. The UK has pushed hard for that in the EU, and that is widely recognised—for example, in the recent report of the House of Lords EU Committee. We are committed to maintaining these high standards.

The Bill as drafted includes a robust package of procedural safeguards, which will be further reinforced by the government amendments I have tabled, including Amendment 55. The combined package will provide a high level of protection for designated persons, at least as strong as current EU standards. The Government would review all sanctions regulations annually and present the results in a written report to Parliament. Amendment 55 makes that clear on the face of the Bill; I know that noble Lords raised that point. If the report concluded that there were no longer good reasons for maintaining a UK sanctions regime, we would lift it. Any changes made to the equivalent sanctions regimes of the EU or other international partners would be examined closely as part of the annual review.

Alongside the annual review of the regulations, the Bill requires the Government to put in place a dynamic process to reassess designations upon request; the triennial review is not the only opportunity. A designated person can request a reassessment of their designation at any time, and a further reassessment when there is a significant matter that has not been previously considered by the Minister. I take the point that a designated person, once they had requested a reassessment, challenged it in court, and failed to establish any unlawfulness, would not have a further review until either there was a significant new matter or a triennial review. But what would the purpose of a further review be when the designation has been established to be lawful and nothing has changed since then? If there are new arguments to be tested, or if the passage of time has changed the situation, a further reassessment can be requested. If not, there is no need to do so.

In response to feedback from noble Lords in Committee, I am proposing to strengthen these safeguards through government amendments. The Minister would have to deal with a request for reassessment as soon as reasonably practicable, and inform the person of the decision and reasons as soon as reasonably practicable after a decision had been made. Ministers can also instigate a reassessment at any time—for example, if the person concerned has been delisted by the EU. Ministers would have every interest in initiating reassessments proactively, both in the interests of justice and to minimise the risk and cost of legal challenges. In any case, when the EU decided to revoke the designation of a person also designated in the UK, I would certainly want to reassess the corresponding UK designation.

Taken together, these provisions will ensure that UK sanctions are under constant scrutiny and the Government are obliged to respond swiftly to new information and challenges. The triennial review then provides a further backstop, ensuring that each and every designation is looked at afresh on a regular cycle. This aligns with current practice in Australia and would put us ahead of countries such as the United States and Canada, which have no such process. It does not prevent more frequent reviews, and we have mechanisms in place that oblige us to do so when appropriate. Requiring the Government to conduct these reviews every year would be extremely resource-intensive; we have had those discussions in the bilateral and constructive meetings with the noble Lord. There are finite government resources, and the noble Lord appreciated that that would take away from other important areas. However, the amendments that we have tabled ensure that the protections the noble Lord was after have been afforded. I am thankful for his co-operation in that regard.

[Lord Pannick]

My Lords, I am grateful to the Minister. I beg leave to withdraw the amendment.

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[Lord Ahmad of Wimbledon]

My Lords, Clause 39, to which this group of amendments refers, has been included to allow the UK to impose new types of sanction measures in response to new, unforeseen circumstances. Let me summarise why we think it is needed and then explain the government amendments that I have tabled. I note that this was one of the issues highlighted in the report of the Delegated Powers and Regulatory Reform Committee, and I know that several noble Lords have received and considered carefully my letter of last week specifically responding to the committee’s recommendations.

The familiar types of sanctions include asset freezes, travel bans, arms embargoes and prohibitions on aviation and maritime transport. These types of sanctions are included in the Bill. It is not possible to predict all the types of sanctions which may in the future be useful or necessary. We all know that as technology advances and those who wish to do us harm find ever more sophisticated ways of doing so, we may need to be able to react in an agile manner. The Government intend to continue to play a leading role in the development of sanctions as a foreign policy tool. Wherever possible we will do this through the UN to ensure that the measures have global impact. On occasion, however, we will need to work with like-minded partners outside the UN framework and may need to adapt our own sanctions toolkit to keep pace with allies. On both Iran and Russia, for example, transatlantic co-operation resulted in sanctions that were substantively different from anything previously agreed.

The power in Clause 39 is designed to provide the necessary flexibility in cases where we are acting outside the UN framework. Regulations under this clause would be subject to the draft affirmative procedure as befitting a Henry VIII power of this kind. However, having listened to the concerns expressed in this House and having reflected carefully on them, I have tabled government Amendment 69, which would further restrict the use of this power by stipulating that it may be used to create new types of sanctions only where the UK is or has been subject to an international obligation to put in place sanctions of that type. This means that the new types of sanctions created by this power can only be those developed by the international community. This power, as amended, will no longer enable the UK unilaterally to put new types of sanctions in place, which was a concern that was expressed.

Government Amendment 70 also makes it clear, as requested in Committee, that Clause 39 cannot be used to alter the purposes of the sanctions regulations specified in Clauses 1 and 2. We think that this was the effect of the original drafting, but we are happy to make it explicitly clear in the Bill. I believe that this is a substantial move forward on the Government’s part, and I hope noble Lords will acknowledge this and support it. I beg to move.

[Lord Pannick]

Again, I am very grateful to the Minister and the Bill team. Government Amendments 69 and 70 respond positively to the concerns that I and others expressed in Committee. Therefore, I will not move Amendment 71.

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord Pannick

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 29th November 2017 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, I thank the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Judge, for tabling this amendment, and I thank other noble Lords for their contributions. Perhaps I will disappoint the noble Lord, Lord Pannick, somewhat by saying that I agree with the substance and constructive nature of the proposal before us. When the noble Baroness, Lady Northover, started talking about “shortly” and so on, I was reminded of my time as the Aviation Minister and the occasion when an announcement on Heathrow Airport was pending—but we got there.

In that mood, let me outline the Government’s position on this amendment. When a request is received from a designated person to vary or revoke their designation, the appropriate Minister should ensure that they make their decision as soon as is reasonably practicable. As sanctions are applied without giving those sanctioned the opportunity to make representations, and because they have serious consequences on the individuals concerned, it is important to ensure that mistakes are rectified swiftly.

As sanctions are intended to change behaviour, it is also important that people should be able to have their designation revoked if they change their behaviour. Clause 19 therefore provides a quicker and less costly option than going to court. It will also have the advantage of keeping unnecessary pressure off the courts and potentially reducing costs to the taxpayer. The reassessment process exists to allow designated persons to seek swift redress when wrongly designated—and I can assure noble Lords that the Government fully intend to act promptly to requests for reassessments.

I shall certainly reflect on the amendment. I have listened carefully to noble Lords, who have made a compelling case for us to look at our position. With the assurance today that we will look at the amendment again—although it is only an assurance at this juncture—I ask the noble Lord, Lord Pannick, to withdraw his amendment.

[Lord Pannick]

I am grateful to the Minister. I look forward to hearing from him before Report that the Government are able to move on this matter. He has heard the views that there is no basis for not including this in the Bill. I hope this is the first of many amendments today that he will see the wisdom of. On that basis, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

I think I understand the noble Baroness’s question, but, notwithstanding the issue of numbers alone, Clause 20 lays out a process which the Government perceive to be more efficient than that currently adopted by the EU.

[Lord Pannick]

My Lords, I thank the Minister for his response. It is disappointing. I am not persuaded. As the noble Baroness pointed out, a limited number of people are involved here, and surely the time and the resources are justified by the significance of the sanctions imposed. It is right and proper that sanctions of such significance should be reviewed more often than every three years.

The Minister says that the individual can seek a review, which is right, but the individual can do so only if there is a significant matter known to the individual not previously considered by the Minister. There may well be material in the files available to the Government which is not known to the individual. The Minister says that the individual can go to court, but it is the same under the EU system: you can go to court but the whole point of the Bill is to encourage court procedures as a last resort.

The Minister’s other point was that there is a sanctions review every year, but as I understand it—the Minister will correct me if I am wrong—that is not a review of individual cases but a review of the structure of the system, so for my part I do not see that that adds to the debate.

I will reflect on what the Minister has said, and I hope that he will reflect on this debate before Report, but we may well come back to this on Report. For the moment, I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Sheehan (LD)]

I am a little intrepid in saying this as I am not a lawyer or a constitutional expert but this seems to be a Bill that, from a layman’s point of view, lets the Government give themselves great powers through the way it designates individuals, connecting persons through descriptions, through definitions of involved people and through clauses that give powers to amend. These include Clause 39, which gives power to amend all of Part 1 so as to authorise additional sanctions, and Clause 44(2), which gives sweeping Henry VIII powers to amend, repeal and revoke amendments and enactments. To me, this seems like Jekyll and Hyde legislation. You think you are getting one thing, yet there is every ability within the proposed Act to change itself into something quite different.

I was quite concerned in last week’s debate, when my noble friend Lady Bowles talked about how Acts could be used for unintended purposes. I recall the case of Maya Evans, who read out the names of 97 British soldiers during the remembrance ceremony at the Cenotaph in 2005. Although it was a very innocuous statement that she was making—she was protesting against Britain being taken into the Iraq war; she felt that it was illegal—she was arrested and was the first person in the UK to be convicted under the Serious Organised Crime and Police Act 2005. Also in the same year—I might embarrass the Labour Benches here—Walter Wolfgang was forcibly removed from the Labour Party conference. Again, he wanted to protest about the Iraq war, and shouted out “Nonsense!” and “That’s a lie!” during a speech made from the conference platform by Jack Straw. He was ejected and was stopped from re-entering the conference hall by a police officer citing the Terrorism Act.

From my point of view as a lay person, I am fully supportive of the well-informed noble Lords here who are leading the charge to make sure that the Bill does what it says on the tin and does not turn into a Jekyll and Hyde Bill.

[Lord Pannick]

Whether I am well informed or not, can the Minister confirm that in his response on Amendment 72 he gave a reassurance to the Committee that these powers would be used only when necessary? That was the word he used on more than one occasion. He will remember an earlier debate we had in this Committee on whether that word should be written into an earlier clause. If with the aid of parliamentary draftsmen “necessary” could be written in to confine the use of that power, it would mitigate substantially my concern about Clause 44(2); I speak only for myself. Perhaps the Minister and the Bill team could reflect on that before Report.

[Lord Ahmad of Wimbledon]

To pick up on that final point, of course we will. I confirm that I used “necessary”. As regards the intervention from the noble Baroness, perhaps I did not quite follow her whole argument—various rules were in play—but I got the general principle that she was in support of the powers that are being conferred. As I said right at the beginning, laying it out in quite a lot of detail, I totally accept the point about the Henry VIII powers—the use of secondary legislation rather than primary legislation—which we have debated several times. Certainly, from our perspective as the Government—that is true not only of ourselves but of previous Governments as well—there is a point in principle that we try to strike a balance. Therefore I am listening carefully. On the specific point that the noble Lord made at the end, I will take that back and see how it can be adapted.

I am in reflective mode, as several noble Lords have noted during some of the earlier debates in Committee. However, on this group of amendments, I hope that after the explanation I have given the noble Lord will be minded to withdraw his amendment.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords for their contributions on this clause. I am hearing the message loud and clear, but in doing so I need to pick up on a few points as to the motive and the intent behind the clause. I appreciate the clarification by the noble and learned Lord, Lord Falconer, of the Government’s motives. I will not comment on his description of lawyers; it would be entirely inappropriate for me to do so. However, he makes a valid point about the explanation and it is appropriate to explain the Government’s intention behind the clause.

The clause will allow the UK to make amendments to the Bill, as noble Lords have mentioned, to allow for the imposition of new and unforeseen sanction measures, a point well made by my noble friend Lord Faulks. The power is confined to new types of sanctions and cannot be used to alter the purposes for which sanctions can be imposed. I should explain what I mean by new types of sanctions. Common types of sanction include asset freezes, travel bans, arms embargos and prohibitions on aviation and maritime transport. These are included in the Bill. However, the international community sometimes finds it necessary to develop and deploy new types of sanctions. Indeed, a recent example is the UN sanctions imposed in respect of North Korea. That resolution requires that UN member states do not grant work permits to North Koreans save where the UN agrees, in advance, on a case-by-case basis. Prior to the UN’s putting in place that sanction, such a sanction did not exist. There may be times in the future when a currently unforeseen type of sanction would again be appropriate.

[Lord Pannick]

I am sorry to interrupt the Minister but if the new type of sanction is to be imposed because the UN has considered it appropriate, it surely falls within Clause 7.

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord Pannick

Committee: 1st sitting (Hansard): House of Lords
Tuesday 21st November 2017 Lords Chamber

[Lord Ahmad of Wimbledon]

I have stated that the position is as it is now. I know the noble Baroness is seeking to develop arguments that we have had on a previous occasion, but what I have stated is the position as it exists. The noble Baroness talked about it being enshrined in law. Currently, that is how affirmative instruments and statutory instruments work. I am sure she is fully cognisant of that fact.

The noble Lord, Lord Lennie, said that the amendment would not inhibit the Government in any way. But as I was saying—to give further explanation and clarity, if I may—changing “appropriate” to “necessary” would effectively force the Government to use sanctions only as a last resort. Let me assure noble Lords that by saying that I do not mean that sanctions are never our first option. It is important that the Government of the day have some flexibility in deciding when and how sanctions should be deployed. We would not want to find ourselves in a situation where we could not use sanctions in the early stages of a crisis and instead had to allow it to escalate until the necessity of sanctions could be demonstrated.

Moreover, sanctions work best when agreed multilaterally. To be required to demonstrate that other options have been exhausted and sanctions are therefore necessary would leave the UK more constrained than our allies and international partners in our ability to agree and deploy sanctions. It would be a high bar to meet, especially in cases where we may wish to impose sanctions as part of a multilateral agreement with allies in areas where there is no direct risk to UK citizens or direct impact on UK interests. Too high a bar could prevent the UK acting in these areas. This could not only reduce the ability of the UK to continue to play a central role in international affairs but reduce the effectiveness of the sanctions measures themselves. For example, financial sanctions against Russia—

[Lord Pannick]

I am puzzled by this point. The amendment is concerned, under Clause 1(1), with the circumstances in which regulations may be made, but it does not affect the broad discretion embodied in Clause 1(2), which defines purposes. Clause 1(2) states:

“A purpose is within this subsection if the appropriate Minister … considers”—


so it is a matter entirely for the Minister—

“that carrying out that purpose would”,

for example,

“further a foreign policy objective of the government of the United Kingdom”.

So, as I understand it, my noble and learned friend Lord Judge’s amendment would in no way inhibit the complete discretion of the Minister to decide matters of purpose and to decide what is or is not in the foreign policy objectives of the Government; for example, that sanctions should be imposed, in general terms. All the amendment does is to say that the Minister has to be satisfied that it is necessary to impose these regulations once the foreign policy objective has been determined—and it is to be determined by the Government. With great respect, I do not understand the point that the Minister is making.

[Lord Ahmad of Wimbledon]

The point I was making was about the implication in the current wording of “appropriate”. This is not an open invitation for a Minister to impose sanctions, and the appropriateness of imposing sanctions is qualified in the context in which they must be applied. That was why I referred to the specific section that I did.

I think I have made the point already that the concern would remain. Several noble Lords have referred to the Constitution Committee and the Delegated Powers Committee. We have received those reports as well, and I assure noble Lords that I am not dismissing them. We are reflecting very carefully on the representations made by both committees because it is important that we respond carefully and after detailed consideration of what is being put forward. As I said right at the start of my remarks, I will reflect very carefully and will very much bear in mind the voices and experience of those who have tabled these amendments. We certainly remain of the thinking that the current wording, with the balances and the qualifications in the context of the legislation as presented, means that this is not an open invitation for a Minister to apply a sanction. However, in the context of the two reports, I will of course look again at the basis on which perhaps we can look to qualify, and provide greater certainty in respect of, the language used.

Amendment 1A, tabled by the noble Baronesses, Lady Sheehan and Lady Northover, would require there to be a “compelling” reason why sanctions are appropriate for the purposes set out under subsection (2), which relates to non-UN sanctions. I agree with the sentiment behind this amendment and note that it reflects a specific recommendation of the Delegated Powers Committee. However, adding the requirement for a “compelling” reason might also give rise to some of the difficulties I have already highlighted in respect of the previous amendment.

As I said, we think that in matters of foreign affairs and security policy the Government should have discretion about when it is appropriate to act. This amendment would effectively remove some of that discretion. We also believe that it could restrict our ability to work with international partners to ensure that sanctions are effective. In some cases, sanctions may be more compelling for our international partners than for the UK, but it would undermine the effect of sanctions if we were not able to participate or agree to them being applied multilaterally. I am sure that all noble Lords will recognise that perspective. If the UK was unable to act, this could in turn undermine the UK’s relationships with our international partners.

Amendment 23 deals with a similar issue, but in relation to UN sanctions only. I think there is agreement on all sides of the Committee that it is appropriate that the UK can continue to comply with its international obligations, so I doubt there is much between us on this issue. We think “necessary” would in many cases be acceptable in that place in the Bill. However, we also think it is important that where the UN provides some flexibility about how to implement obligations, the Government should have the flexibility to decide how best to do so. The word “appropriate” provides that flexibility.

It should be noted that the power here is broadly consistent with the equivalent provision in Section 1 of the United Nations Act 1946, which enables Ministers to,

“make such provision as appears to”,

them,

“necessary or expedient for enabling”,

measures in UN Security Council resolutions “to be effectively applied”. It should also be noted that the word “appropriate” does not enable Ministers to do whatever they want. The noble and learned Lord, Lord Hope, referred to the Ahmed case, which I know he knows well. That demonstrated that the courts will take a robust approach to scrutinising the exercise of the Executive’s powers.

I have already alluded to the fact that we have received the reports of both the Constitution Committee and the Delegated Powers Committee. I put it on record that we will consider both committees’ recommendations very carefully. I have also listened carefully to the contributions during the course of this short debate, and I am sure we will explore the issues further as we scrutinise the Bill in Committee.

It says here, “I hope I have been able to convince noble Lords”, but, from looking around the Chamber, I think that would be a rather hopeful word to use at this juncture. Perhaps I have provided noble Lords with a degree of reassurance with some of the explanations that I have given about the context in which the sanctions would apply, but I respect and understand that there would be a need for continued parliamentary scrutiny and for ensuring, as I am sure all noble Lords appreciate, that the UK continues to comply with international law and maintains a leading role in international affairs after the UK’s exit from the EU.

As I said, we will continue to consider very carefully the recommendations of the two committees, and I am sure we will return to this issue in discussion with noble Lords. Again, there are important issues of discussion here. Both in the course of the Committee stage of the Bill and in the meetings that we are having beyond the Chamber, I am sure we will reach a means of moving forward constructively on this basis. The ultimate purpose and objectives of the sanctions regime are something that I know all noble Lords respect. Based on that, I hope the noble Lords will be minded at this juncture to withdraw the amendment.