Counter-Terrorist Asset-Freezing Regime

Mark Hoban Excerpts

Monday 28th February 2011 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The Government are committed to reporting quarterly on the operation of the UK’s terrorist asset-freezing regime. We believe this is essential to ensure transparency and accountability of the regime. The Terrorist Asset-Freezing etc. Act 2010 has enshrined in law the commitment to report quarterly to Parliament on the operation of the regime mandated by UN Security Council Resolution 1373.

This report covers the period October to December 2010¹. It is the last to cover the operation of the regime under the Terrorism (United Nations Measures) Order 2009, which was repealed on 17 December when the Terrorist Asset-Freezing etc. Act came into force and it also covers the first two weeks of the operation of the new Act.

The new Act strengthens civil liberties safeguards and makes the new regime fairer, more proportionate and more transparent.

A copy of the Act can be found on the HM Treasury’s website:

http://www.hm-treasury.gov.uk/fin_sanctions_terrorist.htm

This report also covers the operation of the UN al-Qaeda and Taliban asset-freezing regime.

As of 31 December 2010, a total of just under £280,000² of funds relating to terrorism were frozen in the UK. This covers funds frozen under the UK’s domestic terrorist asset-freezing regime, mandated by UN Security Council Resolution 1373, and also funds frozen under the UN al-Qaeda and Taliban asset-freezing regime, mandated by UN Security Council Resolution 1267.

(1) UK’s Domestic Terrorist Asset-freezing Regime

As of 31 December 2010, a total of 91 accounts containing just under £140,000 were frozen in the UK under the domestic terrorist asset-freezing regime mandated by UNSCR 1373.

Operation of the Terrorism (United Nations Measures) Order 2009 (prior to 17 December 2010)

Asset-freezing designations

In the quarter October to December 2010, the Treasury gave no new directions under the 2009 order.

Reviews under the 2009 Order

The Treasury keeps domestic asset-freezing cases under review and completed 38 reviews in this quarter. As a result of these 38 reviews, six persons had their designations revoked.

Licensing

Maintaining an effective licensing system is important to ensure the overall proportionality and fairness of the asset-freezing regime, whether the individuals concerned are subject to an asset freeze in accordance with a UN or EU listing, or domestic terrorism legislation. A licensing framework is put in place for each person on a case-by-case basis. The key objective of the licensing system is to strike an appropriate balance between minimising the risk of diversion of funds to terrorism and meeting the human rights of affected persons and their families. Licences contain appropriate controls to protect against the risk of the diversion of funds for terrorist finance.

Four licences were issued this quarter in relation to four persons subject to an asset freeze under the 2009 order.

In addition to issuing licences relating to a specific person, the Treasury may also issue general licences, which apply to all persons designated under a particular regime or regimes. Licences are granted where there is a legitimate need for such transactions to proceed and where they can proceed without giving rise to any risk of terrorist finance.

One general licence was issued this quarter to allow third parties to pay a designated person’s legal expenses under both the Act and the al-Qaeda and Taliban asset-freezing regime.

No licences were varied or revoked this quarter.

Legal Challenges

Two legal challenges against designations made under the 2009 order were ongoing in the last quarter.

Operation of the Terrorist Asset-Freezing etc. Act 2010 (after 17 December 2010)

The Act contains a transitional provision that ensures that all designations and licences made under the 2009 order remain valid as final designations under the Act until 17 March 2011. All UK asset freezes are therefore currently under review to consider whether they should be renewed under the new Act. The review process will be completed by 17 March 2011.

No new designations or licences were made under the powers of the Act between 17 December and the end of the quarter.

The Independent Reviewer

Under the Act the Treasury is required to appoint an independent reviewer to review the operation of the domestic terrorist asset-freezing regime. The independent reviewer will report on the first nine months of the regime and every 12 months thereafter.

The Treasury has decided to appoint David Anderson QC to the role of Independent Reviewer. He has recently been appointed by the Home Office as the independent reviewer of counter-terrorism legislation.

(2) UN al-Qaeda and Taliban Asset-Freezing Regime

The UN al-Qaeda and Taliban asset-freezing regime is implemented in the UK through EC Regulation 881/2002. Enforcement measures are provided for in the UK’s al-Qaeda and Taliban (Asset-Freezing) Regulations 2010.

As of 31 December 2010, a total of 112 accounts containing just under £140,000³ were frozen in the UK under the al-Qaeda and Taliban asset-freezing regime.

Designations

During this quarter, the EU added five people to its list made under EC Regulation 881/2002, implementing the UN al-Qaeda and Taliban asset-freezing regime established under UNSCR 1267.

Licences

One licence was issued this quarter in relation to one person subject to an asset freeze under the al-Qaeda and Taliban asset-freezing regime.

No specific licences were varied or revoked this quarter. The general licence referred to above also applies to the UNSCR 1267 regime.

Proceedings

In the quarter October to December 2010, no proceedings were taken for breaches of the prohibitions of the 2009 order, the Act or the al-Qaeda and Taliban (Asset-Freezing) Regulations.

¹ The detail that can be provided to the House on a quarterly basis is subject to the need to avoid the identification, directly or indirectly, of personal or operationally sensitive information.

² This figure reflects the most updated account balances available and includes approximately $64,000 of suspected terrorist funds frozen in the UK. This has been converted using exchange rates as of 12/01/11.

³ Includes approximately $64,000 of suspected terrorist funds in the UK.