House of Commons - Explanatory Note
Crime (International Co-Operation) Bill [HL] - continued          House of Commons

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Clause 14: Powers to arrange for evidence to be obtained

54.     This clause sets out the conditions which need to be satisfied before a court may be nominated to receive evidence under clause 15. Subsection (1) sets out the types of court proceedings, or investigations, in connection with which evidence may be obtained for an overseas authority. In line with the requirements of Article 3 of the MLAC and Article 49(c) of the Schengen Convention, subsection (1)(b) provides that assistance may be provided in connection with administrative proceedings or an investigation into an act which is punishable in such proceedings, and subsection 1(c) provides that assistance may be provided in connection with clemency proceedings or an appeal during the judicial phase of administrative proceedings. (Both clemency proceedings and administrative proceedings are defined in clause 51(1).)

55.     Subsection (2) limits the provision of assistance to when an offence has been committed or there are reasonable grounds for suspecting this, and when proceedings have been instituted or an investigation is being carried out. An offence for these purposes includes an act punishable in administrative proceedings. Subsection (3) provides that a certificate from the overseas authority confirming these matters is to be regarded as conclusive. In the vast majority of cases, this certificate is not required. The letter of request will itself contain sufficient information for the territorial authority to be satisfied as to the matters in subsections 1 and 2. However, the certificate can be useful in particularly complex cases to set out exactly what matters are being investigated, when this is not clear from the request itself.

56.     Subsection (4) sets out the circumstances in which requests relating to fiscal offences may be accepted. If there is no agreement between the UK and the requesting country, and it is not a member of the Commonwealth, such requests shall be subject to a requirement of dual criminality. This follows existing practice.

Clause 15: Nominating a court etc. to receive evidence

57.     This clause provides for a court to be nominated to receive evidence under clause 14 above, and covers proceedings currently governed by section 4 of the 1990 Act (as amended by the Criminal Justice & Public Order Act 1994).

58.     The powers to nominate a court are conferred on the Secretary of State in England and Wales, Northern Ireland and on the Lord Advocate in Scotland. Where it appears that the request relates to an offence involving serious or complex fraud, the request may be referred to the Director of the Serious Fraud Office, or, in Scotland, a direction may be made applying the powers of investigation of a nominated officer under Part IV of the Criminal Law (Consolidation) (Scotland) Act 1995.

59.     Schedule 1 makes further provision in relation to proceedings of a court nominated to receive evidence.

Clause 16: Extension of statutory search powers

60.     Subsection (1) replicates section 7(1) of the 1990 Act, which it replaces. Subsection (3) applies the provision to Northern Ireland. As with the provision in the 1990 Act, the clause enables the appropriate authorities in England & Wales (and Northern Ireland) to apply for and execute a search warrant or a production order in response to an overseas request, in the same circumstances as would be possible in relation to a domestic case, i.e. when the conduct in question would be a serious arrestable offence if committed here.

61.     Subsection (2)(b) provides that such a search warrant or production order may also be applied for and executed without an overseas request if the constable who makes the application is a member of an international joint investigation team (as defined by subsection (5)). Subsection (4)(b) provides similarly for Northern Ireland. These provisions implement Article 13(7) of MLAC which contemplates investigative measures being undertaken without such a request by seconded members of a joint investigation team in relation to the team's investigations overseas. The constable making the application for the warrant or order would have personal knowledge of the joint investigation as he would in a making such an application in a domestic investigation.

Clause 17: Warrants in England and Wales or Northern Ireland

62.     This clause replicates section 7(2) of the 1990 Act, which it replaces. It enables search warrants to be issued if the conditions in subsection (3) are satisfied. These conditions are that criminal proceedings overseas have been instituted or a person has been arrested in the course of a criminal investigation, the alleged criminal conduct would constitute an arrestable offence if it occurred in England and Wales, or Northern Ireland, and there are reasonable grounds to suspect that there is evidence relating to the offence on premises here. This clause enables the search of premises occupied or controlled by the suspect only.

Clause 18: Warrants in Scotland

63.     This clause is the Scottish equivalent to clauses 16 and 17 and it serves the same purpose as those clauses do in England, Wales and Northern Ireland, consistent with Scottish procedure for search warrants. It replaces and largely replicates sections 8(1) and (2) of the 1990 Act, with the exception of inclusion of a reference to section 134 of the Criminal Procedure (Scotland) Act 1995. It gives a sheriff the same power to issue a warrant authorising entry, search and seizure by a constable, as he would have under section 134 of the Criminal Procedure (Scotland) Act 1995. Before issuing such a warrant the sheriff must be satisfied that an offence under the law of a country outside the UK has been committed and that the conduct would have constituted an offence punishable by imprisonment if it had occurred in Scotland.

Clause 19: Seized evidence

64.     This clause deals with the treatment of any evidence that is seized under the procedures set out in clauses 16 to 18. It provides that evidence may be sent directly to the requesting authority, or via the territorial authority. Article 6 of the MLAC requires direct return of evidence, which is a departure from existing procedure established by the 1990 Act. It will speed up the provision of evidence by cutting out any central involvement once the evidence has been obtained. However, the clause is of general application and there will be circumstances when evidence may not be returned directly, for example when a country that is not party to the MLAC requires evidence to be returned via the central authority. Subsection (3) provides that this clause does not apply to evidence obtained by virtue of clause 16(2)(b) or (4)(b) in an international joint investigation.

Clause 20: Overseas freezing orders

65.     This clause implements one of the key measures set out in the Framework Decision: the requirement to execute an order to freeze evidence for its subsequent use in any proceedings or investigation in a participating country, where the order is made by a court or other authority in that country. The UK is already able to consider requests for mutual legal assistance in similar circumstances, but the FD is based on the principle of mutual recognition, and requires the UK to recognise the validity of an overseas order from a participating country, subject to certain conditions, rather than consider it as a request for mutual legal assistance.

66.     Subsection (2) defines an overseas freezing order.

67.     The clause sets out the authorities competent to make overseas freezing orders, and the conditions for executing the order. Provided that the other requirements are met, the UK is obliged to execute orders relating to offences listed in the FD that are subject to a three year prison term in the issuing state, even if that conduct would not constitute a crime here, but may make the execution of orders relating to crimes that do not fall into this category subject to the requirement that the conduct would constitute a crime here.

68.     Overseas freezing orders must be accompanied by a certificate. Article 9 of the FD requires provision of a certificate, which must follow a standard format containing the details required in order that the receiving authority can execute the order. These will include for example details of the issuing authority, the person and offence under investigation, and the evidence sought.

69.     Frozen evidence is not automatically provided to the overseas authority that issued the order. It must issue a mutual legal assistance request, either simultaneously with the order, or at a later stage, in order for the evidence to be transmitted. This is provided for in clause 24.

Clause 21: Considering the order

70.     This clause sets out the procedure when an overseas freezing order is received in the UK.

71.     Providing the conditions in clause 20 are met, the territorial authority (defined in clause 27 as the Secretary of State in England and Wales, and Northern Ireland, and the Lord Advocate in Scotland) must refer the order to a court for execution. There is no discretion at this stage.

72.     The clause provides for rules of court to set time limits for the court to consider the order and sets out the grounds on which the court may decide to refuse to execute an order. These are if execution of the order would be incompatible with the ECHR and where the principle of double jeopardy is infringed, i.e. the person to whom the order relates would be entitled to be discharged under any rule of law in the participating country or the UK relating to previous acquittal or conviction.

Clause 22: Giving effect to the order

73.     This clause sets out how an overseas freezing order will be executed in practical terms. This will be done by issuing a domestic search warrant or production order. The procedures established largely follow those provided for under the Police and Criminal Evidence Act 1984 ("PACE") in that production orders will be issued in relation to the same types of material as under PACE. However, the warrants/orders will not be issued under PACE. They will be freestanding warrants/orders that will be issued in relation to the offences covered by the Framework Decision.

Clause 23: Postponed effect

74.     This clause sets out circumstances (from Article 7 of the Framework Decision) in which UK authorities may postpone giving effect to freezing orders. If the decision is taken to postpone acting on a freezing order, the requesting country will be informed accordingly. If the grounds for postponement cease, the order will then be given effect under clause 22.

Clause 24: Evidence seized under the order

75.     This clause provides that evidence which has been subject to a freezing order must be retained by the constable until the territorial authority gives him instructions either to send the evidence to the requesting authority or to release it. The territorial authority must have received a request from the overseas authority for the evidence to be sent, either at the same time as receipt of the order, or subsequently, before it can authorise return of the evidence. Alternatively, the territorial authority may order the release of the evidence under clause 25.

Clause 25: Release of evidence held under the order

76.     Under this clause, the court may, in response to an application made by one of the persons listed in subsection (2), authorise the release of evidence by the constable. This would enable the persons mentioned in (2)(a) and (2)(b) to apply for the release of the evidence seized in the event that the overseas freezing order was withdrawn, or if one of the conditions for non-execution in section 21 is met.

77.     It would also enable a third party affected by the order, for example the person whose property had been seized, to challenge the execution of the order on the grounds listed in subsection (1). Substantial reasons for issuing the overseas freezing order however, can only be challenged in the country where the order originated.

Clause 26: Powers under warrants

78.     This clause relates to issuing warrants in relation to both mutual legal assistance requests under clause 17 and overseas freezing orders (clause 22).

79.     In line with PACE, subsection (1) prevents a warrant being issued if items sought are subject to legal privilege, excluded material or special procedure material as defined in PACE. Excluded or special procedure material must be obtained by issuing a less intrusive production order. Warrants in respect of such material can only be sought if a production order has been obtained and has failed to produce the evidence sought.

80.     Subsection (3) makes an amendment to the Criminal Justice and Police Act 2001, providing that the additional powers of seizure in that Act will apply to seizure of evidence relevant to overseas offences or investigations under the provisions of this Bill.

Clause 27: Exercise of powers by others

81.     This clause provides for certain functions conferred on the Secretary of State or on a police officer to be conferred upon other authorities. This is in recognition of the MLAC requirement for direct transmission of requests. Currently, the authorities which execute many requests for assistance, such as HM Customs and Excise, do not have the power to nominate courts or issue warrants in order to execute mutual legal assistance requests, and have to seek the authority of the Secretary of State.

82.     This clause therefore contains an order-making power to provide that certain functions conferred on the Secretary of State or a police officer may be exercisable by customs officers or persons acting under their direction. The practical effect of this power is that it would enable requests to be sent directly to Customs and fully executed by them, without recourse to the Secretary of State in circumstances where nomination of a court is required, and will implement the direct transmission provisions more fully.

83.     Such an order could also, in prescribed circumstances, enable Customs officers who are members of joint investigation teams to apply for and execute search warrants and production orders without a request from overseas on the same or a similar basis as constables under clause 16(2)(b) or (4)(b).

84.     Subsection (2) provides for the Secretary of State to confer similar powers on prescribed persons in the future. This could apply either to authorities that already execute requests, or be extended to other authorities that may take on a role in the execution of mutual legal assistance requests.

Clause 28: Interpretation of Chapter 2

85.     This clause explains the terms used in chapter 2. Most of these require no further explanation.

86.     Subsection (5) defines "a listed offence" as an offence described in a provision, identified by an order, of the relevant Framework Decision or as an offence prescribed or of a description prescribed by such an order. The latter provision is necessary to cater for two eventualities: firstly if the list of offences in the Framework Decision is subsequently added to by the European Council. Secondly it reflects the fact that under the Framework Decision freezing orders can be executed in respect of offences other than those listed but with the executing state able, if it wishes, to apply a dual-criminality requirement. Subsection (6) therefore provides that any order which the Secretary of State makes in respect of a prescribed offence may require that the conduct involved would if it occurred in a part of the UK constitute an offence in that part.

Chapter 3: Hearing Evidence through Television Links or by Telephone

Clause 29: Hearing witnesses abroad through television links

87.     Article 10 of the MLAC permits the hearing of witnesses by video link where it is neither possible nor desirable for the witness to travel from his Member State to that where his evidence is required.

88.     Outgoing requests from the UK are currently covered by the provisions contained in section 32 of the Criminal Justice Act 1988, and section 273 of the Criminal Procedure (Scotland) Act 1995, which allow the use of video links in limited circumstances. The Bill does not change the current position on the types of case when video links can be used to import evidence into UK court proceedings, although the clause makes provision to for the Secretary of State to extend this provision to other types of criminal proceedings in the future.

Clause 30: Hearing witnesses in the UK through television links

89.     This clause introduces arrangements so that, for the first time, courts can take video evidence of witnesses for transmission abroad. All requests will be sent to the Secretary of State, (or in Scotland, the Lord Advocate) who will then nominate a court where the hearing will take place. The proceedings will be subject to section 1 of the Perjury Act, (in Scotland, sections 44 to 46 of the Criminal Law (Consolidation) Scotland Act 1995 or any matter pertaining to the common law crime of perjury) and the rules on contempt of court will apply to the hearing. Although the hearing will not be a UK court proceeding, states must (in accordance with Article 10(8) of the MLAC), be able to deal with witnesses who refuse to testify or do not testify according to the truth under their domestic law, but, except for limited purposes, the evidence given before the nominated court is not to be treated as evidence given in UK proceedings.

90.     Subsection (6) makes reference to Schedule 2, which covers procedural matters such as securing attendance of witnesses, the conduct of the hearing, and privilege. The domestic court must ensure that it protects the rights and privileges of the witness (such as privilege against self-incrimination) and is to intervene where necessary to safeguard the rights of the witness. Translation must be available for the benefit of the court as well as the witness.

Clause 31: Hearing witnesses in the UK by telephone

91.     Article 11 of the MLAC allows for courts to hear witnesses or experts by telephone, within the scope of national law. This clause allows for the UK to respond to requests for assistance in arranging telephone hearings at the request of a participating country. All requests will be sent to the Secretary of State, (in Scotland, the Lord Advocate) who will then nominate a court where the hearing will take place. Unlike the provisions concerning evidence via television link, the witness or expert has to give his consent, in accordance with Article 11(2) of the MLAC, and subsection (3) provides that a request for a person to give evidence in this way must state that the witness is willing to give evidence. There is therefore no power to compel witnesses to attend the hearing. As with clause 30, proceedings will be subject to section 1 of the Perjury Act, (in Scotland, sections 44 to 46 of the Criminal Law (Consolidation) Scotland Act 1995 or any matter pertaining to the common law crime of perjury), and the rules on contempt of court will apply to the hearing, but, except for limited purposes, the evidence given before the nominated court is not to be treated as evidence given in UK proceedings. Some countries find telephone hearings a useful means of taking routine statements from key witnesses. As UK law does not provide any scope for evidence to be heard in this way there is no provision made here for outgoing requests.

Chapter 4: Information about Banking Transactions

Information about banking transactions

92.     Clauses 32-46 implement the 2001 Protocol to the Convention on Mutual Assistance in Criminal Matters. The purpose of the Protocol is to tackle serious crime, in particular economic crime and money laundering. Countries participating in the Protocol are obliged to identify, provide information about, and monitor, bank accounts at the request of other countries participating in the Protocol, subject to certain restrictions and conditions (which are covered in more detail below). The Protocol obliges participating countries to establish mechanisms whereby they can provide the stipulated information. The manner in which they do so is left to individual participating countries.

Clauses 32 and 33: Customer Information Orders

93.     These clauses deal with incoming requests made under Article 1 of the Protocol to identify any bank accounts in the UK relating to a person who is the subject of an investigation in an EU or other designated country.

94.     Clause 32 applies where the Secretary of State receives such a request and authorises him to direct an appropriate police or customs officer to apply for a customer information order. A customer information order requires all or a targeted number of banks (and where appropriate other financial institutions) to provide details of any accounts held by the person who is the subject of an investigation into serious crime as specified in Article 1(3) of the Protocol. Subsection (6) provides that the definition of customer information is, to a large extent, the same as in section 364 of the Proceeds of Crime Act 2002. The scope of the Protocol is different to that of the Proceeds of Crime Act, however, which is restricted to confiscation or money laundering investigations. In practice the power will largely be used in relation to these types of investigations, but it might also be exercised in relation to other investigations into serious crime as specified in the Protocol and defined in clause 46. Subsection (8) provides that information obtained should be returned to the Secretary of State for forwarding to the overseas authority which made the request. This is different to the procedure established in clause 19 of the Bill which provides that, in general, evidence should be returned by direct channels. As a matter of policy the Government has decided that transmission via the Secretary of State will enable effective monitoring of this new measure.

Clause 33: Making, varying or discharging customer information orders

95.     This clause details the conditions which must be satisfied before a judge may make a customer information order and what an application to the judge must contain. Subsection (2) provides that the application may be made without notice (ex parte) to a judge in chambers. Subsection (4) provides for the discharge or variation of an order.

Clause 34: Offences

96.     This clause replicates section 366 of the Proceeds of Crime Act, and provides for various criminal offences connected with failure to comply with customer information orders. The sanctions, which are financial only, are directed at non-compliant institutions, rather than at individuals.

Clause 35 and 36: Account monitoring orders

97.     These clauses implement Article 3 of the Protocol in relation to incoming requests. Article 3 provides for requests to be made for a specified account to be monitored during a specified period of time. Such a request might be made subsequent to an Article 1 request for bank details or in cases where the investigator already has the details of the relevant account. Account monitoring procedures were introduced in the UK under the Proceeds of Crime Act 2002, but separate provision is required in this Bill to ensure that the UK can respond to all requests that meet the Protocol requirements, which, as noted in the note on clause 32, has wider scope than the Proceeds of Crime Act. The Protocol obliges all EU Member States to establish a mechanism for monitoring bank accounts.

98.     Clause 35 applies where the Secretary of State receives such a request and authorises him to direct an appropriate police or customs officer to apply for an account information order. An account information order will require a financial institution to provide the information specified in subsection (4) (for example, details of all transactions passing through the account) during a specified period. Article 3(3) of the Protocol provides that the order shall be made with due regard for the national law of the requested Member State. Under the Proceeds of Crime Act, monitoring orders may be made for a period of up to 90 days and the same restriction will apply to Protocol requests. No limit is stated because the arrangements will be made between the relevant authorities on a case by case basis (Article 3(4) of the Protocol).

Clause 36: Making, varying or discharging account monitoring orders

99.     This clause provides the conditions which must be satisfied before a judge may make an account monitoring order in response to an overseas request, and the types of information that an application for such an order may specify. Subsection (2) provides that the application may be made without notice (ex parte) to a judge in chambers.

Clauses 37 to 41: Customer information and account monitoring orders (Scotland)

100.     These clauses are the Scottish equivalents to clauses 32 to 36 for England and Wales, and Northern Ireland, and they have the same effect in Scotland as those clauses do in the rest of the United Kingdom. They differ to take account of Scottish procedure e.g. references to the procurator fiscal and the sheriff. They also refer to the equivalent Scottish parts of the Proceeds of Crime Act 2002. In Scotland, the Lord Advocate carries out the functions given to the Secretary of State in the rest of the United Kingdom.

Clause 42: Offence of disclosure

101.     This clause creates criminal offences in relation to the unlawful disclosure of information. The purpose of the clause is to ensure that financial institutions do not inform their customers of any requests for account monitoring or account information that they have received. A financial institution, or an employee of the institution is guilty of an offence if it (or he, as the case may be) discloses the types of information specified in subsection (3), and subsections (4) and (5) provide for the penalties which may be imposed if such an offence is committed.

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Prepared: 19 March 2003