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

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Paragraphs 1 and 2

181.     Paragraph 1 provides that the Act is amended in accordance with the provisions in the Schedule. Paragraph 2 provides that the provisions in section 123(2)(i) of that Act shall be amended to include references to the order making powers in the new paragraphs 11A, 25A and 41A. An order under those provisions will follow the negative resolution procedure.

Paragraph 3

182.     This paragraph inserts new provisions after paragraph 11 of Schedule 4 to the Terrorism Act in relation to domestic and overseas freezing orders.

Paragraph 11A

183.     This paragraph contains a number of definitions interpreting the provisions which appear in paragraph 11B onwards. Paragraph 11A(2) defines "Framework Decision" as any such Framework Decision identified by the Secretary of State by order and relating to the execution of orders freezing property or evidence.

184.     Paragraph 11A(3) defines "a listed offence" (domestic freezing orders and overseas freezing orders are orders relating to listed offences carried out as acts of terrorism) as an offence described in the relevant Framework Decision or as a prescribed offence or an offence of a prescribed description. 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 of Ministers. 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 (see the notes on paragraph 11A(4) below).

185.     Paragraph 11A(4) permits the Secretary of State to make an order under subparagraph (3)(b) to extend the list of the offences in the Framework Decision for which freezing orders may be issued; he may at the same time apply a dual criminality test in the order in respect of new offences.

186.     Paragraphs 11A(5) and (6) define what is to be regarded as the "specified information" which must be contained in the certificate to be attached to both domestic and overseas freezing orders. Paragraph 11A(7) defines which countries are to be participating countries for the purposes of Schedule 4 and provides that these provisions will apply to member States of the EU, but the order-making power in paragraph 11A(7)(b) also allows the Secretary of State to designate other countries to participate in these provisions by order. This power will only be used to designate the candidate countries to the EU on their accession to the EU. Paragraph 11A(9) applies to these provisions the interpretative provisions relating to the proceeds of terrorism at section 14(2)(a) of the Act.

Paragraph 11B: Domestic Freezing Orders certification

187.     Paragraph 11B, together with 11C, contain provisions relating to the certification of restraint orders in England and Wales and their transmission to other participating countries for execution under the Framework Decision. Restraint orders would need to be obtained in the same way as at present (i.e. under paragraph 5 of Schedule 4 to the Act (as amended) where proceedings for, or investigation of, a terrorist financing offence (i.e. those offences defined at sections 15-18 of the Act) are under way). The High Court would continue to enjoy full discretion as to whether to issue such a restraint order.

188.     As with evidence freezing orders in Part 1 of the Bill, restraint orders need to be accompanied by the certificate specified in Article 9 of the Framework Decision. The person applying for the restraint order can also ask the court to issue the certificate. The court then may (but is under no obligation to) make such a certificate if two conditions are met (paragraph 11B(2)). These are firstly, that some or all of the property which is subject to the restraint order is in another participating country and, secondly, that it is satisfied that there is a good arguable case that the property in question is likely to be used for the purposes of a listed offence or is the proceeds of the commission of a listed offence.

189.     This "listed offence" approach is necessary because, whilst terrorism is listed as one of the offences in the Framework Decision, there is no offence of terrorism as such in UK law. A listed offence is defined in paragraph 11A(3). It will be necessary to identify one or more of those offences which are listed in Article 3(2) of the FD (such as murder, arson or kidnapping) and that there is a good arguable case that the property is likely to be used for the purposes of a listed offence or is the proceeds of the commission of a listed offence. Once the court has made the certificate, paragraph 11B(4)(a) requires that the person who is subject to the restraint order is given notice of it. To prevent disappearance of the assets in question, notice will be given after the assets have been frozen. Paragraph 11B(4)(b) provides that the court shall have the same powers to discharge or vary the certificate as they enjoy in respect of the freezing order itself.

Paragraph 11C: Sending domestic freezing orders

190.     This paragraph prescribes the steps which must be followed once the High Court has made the restraint order and the certificate.

191.     Paragraph 11C(1) provides that these two documents are then to be sent to the Secretary of State with a view to forwarding them to either a court exercising jurisdiction in the participating country where the property in question is situated, or to any authority recognised by the government of the participating country as the appropriate authority for receiving orders of that kind. This latter provision is to cater for those countries where authorities such as public prosecutors or examining magistrates discharge this function.

192.     Under paragraph 11C(2) these documents must also be accompanied by a forfeiture order made under section 23 of Terrorism Act 2000 itself unless the certificate indicates when the court expects such an order to be sent. A forfeiture order is an order made by a court by which a person is convicted of a terrorist offence, defined at sections 15-18 of the Act, for the forfeiture of money or property associated with the offence. The Framework Decision requires that the certificate is translated into an appropriate language of the participating country (paragraph 11C(3)) and that the certificate is signed by or on behalf of the court, and must include a statement as to the accuracy of the information given in it. Such a signature may be an electronic one (paragraphs 11C(4)).

Paragraph 11D: Overseas freezing orders

193.     Paragraphs 11D and E provide for incoming freezing orders i.e. where a court in a participating country makes a freezing order in respect of terrorist property in the UK. Paragraphs 11D(2)-(4) prescribe the requirements which must be met before such an order can considered as an "overseas freezing order" and be enforced in the UK. These are:

(a)     that the property must be in the UK;

(b)     that the court or authority in the participating country considers that the property is likely to be used for the purposes of a listed offence or is the proceeds of the commission of such an offence;

(c)     that the freezing order relates to property in respect of which a forfeiture order has been made, or may be made, by a court exercising criminal jurisdiction in the participating country;

(d)     that the action which the court making the order considered would constitute the listed offence is an action done as an act of terrorism or for the purposes of terrorism (so excluding orders relating for example to kidnapping without a terrorist motive); and

(e)     that the order relates to criminal proceedings instituted in the participating country or to a criminal investigation being carried on there.

194.     Paragraphs 11D(5) and (6) make provision in respect of the certificate which must accompany the order. The certificate is required to contain information specified by the Framework Decision, but this may be waived if the Secretary of State already has that information, (in accordance with the Framework Decision). The certificate must be signed (electronically if necessary) by or on behalf of the court or authority which made or confirmed the order. It must contain a statement of the accuracy of its contents and, if not in English, must contain a translation. Paragraph 11D(7) requires that the freezing order must be accompanied by the forfeiture order to which it relates unless the certificate indicates when such an order is expected to be sent. Paragraph 11D(8) defines the appropriate court or authority in the participating country so as to cover courts exercising criminal jurisdiction, a prosecuting authority or any other authority which it appears to the Secretary of State to have the function of making such orders. This flexibility reflects what may be varying practices in different participating countries.

195.     Paragraph 11D(9) is a general provision to the effect that any references in these paragraphs to an overseas freezing order also includes its accompanying certificate.

Paragraphs 11E, F and G: Enforcement of overseas freezing orders

196.      These paragraphs prescribe the procedures to be followed in England and Wales to give effect to a freezing order sent from another EU country.

197.     Paragraph 11E(1) provides that, when an overseas freezing order is received, the Secretary of State must send a copy of it to the High Court and to the Director of Public Prosecutions (DPP). The purpose of copying the order to the DPP is so that the DPP may be made aware of the order and has an opportunity to be heard (paragraph 11E(3)). The DPP might, for example, be asked for advice as to whether executing the order would prejudice an ongoing criminal investigation or about the pre-existence of a freezing order in respect of the same assets (both of which are grounds for postponement of execution under the Framework Decision (paragraphs 11F(a) and (b)). The High Court is then required to consider the freezing order on its own initiative within a period to be prescribed by rules of court (paragraph 11E(2)).

198.     The only ground on which the High Court can decide not to give effect to the freezing order is that to do so would be incompatible with any Convention rights (within the meaning of the Human Rights Act 1998) (paragraph 11E(4)).

199.     Under paragraph 11G(1), once the High Court has decided to give effect to the overseas freezing order, it must register it and provide for notice of the registration to be given to anyone affected by it. In order to prevent the assets in question being disposed of, such a notice would only be given once the property had been frozen. Such a registered overseas freezing order is to have effect as if it were an order of the High Court so that, for instance, failure to observe the court order would be contempt of court. In addition, property which is the subject of the overseas freezing order may be seized by a constable to prevent it from being removed from this country and dealt with in accordance with the High Court's directions (paragraph 11G(3)). Paragraph 11G(4) enables the High Court to cancel or vary the registration of the order or the property to which it relates on an application by the DPP or any other person affected by it if, and to the extent that, the Court has concluded that giving effect to the order is incompatible with the Convention rights or that the order has ceased to have effect in the participating country. Subparagraphs 11G(5) and (6) provide that Orders in Council may be made in respect of the enforcement of overseas freezing orders to set out further detailed requirements of enforcement to courts.

Paragraph 4

200.     This paragraph provides that overseas freezing orders are excluded from the provisions relating to the enforcement of orders made in other designated countries made by Order in Council under paragraph 14 of Schedule 4. These arrangements will, however, need to remain in force to cater for co-operation with countries other than those which are member States of the European Union.

Paragraphs 5 to 8

201.     These paragraphs make similar provision for the freezing of terrorist assets in relation to Scotland and Northern Ireland.

Paragraph 9

202.     This paragraph applies the general provisions in Schedule 4 to the Act relating to insolvency proceedings to overseas freezing orders.

Schedule 5: Minor and consequential amendments

203.     This Schedule contains minor and consequential amendments.

Paragraph 22: Amendment of section 109 of RTA 1988 - Northern Ireland provisional licences.

204.     Sub-paragraph (a) provides that the holder of a Northern Ireland provisional driving licence will no longer be treated in Great Britain as the holder of a full Northern Ireland driving licence. A person's authorisation to drive in Great Britain as the holder of a Northern Ireland licence extends only to driving in accordance with that licence.

Paragraphs 38 to 53: Amendments to the Road Traffic (New Drivers) Act 1995 (c. 13)

205.     The amendments to the Road Traffic (New Drivers) Act 1995 provide for the early termination in Great Britain of the probationary period for the holder of a Northern Ireland driving licence in similar circumstances to those applying to the holder of a Great Britain driving licence, except that, as regards revocation, it is not the licence which is revoked, but the permission to drive in Great Britain conferred by Section 109(1) of RTA 1988. As for revocations on medical grounds, the Secretary of State is obliged to inform the Northern Ireland Authorities of any such revocation involving a Northern Ireland licence. The amendments also provide that a Northern Ireland licence-holder whose entitlement has been revoked under a corresponding provision of Northern Ireland law shall be subject to the requirement to satisfy the Secretary of State on a re-test.

FINANCIAL EFFECTS OF THE BILL

206.     There will be additional costs for Government Departments arising from some of provisions in the Bill. Details are set out below. The Bill's other provisions have negligible expenditure implications.

Part 3: Convention on Driving Disqualifications

207.     The main effect will be on the Department for Transport's Driver and Vehicle Licensing Agency. The estimated one-off cost, mainly for ensuring IT systems are compatible with the new requirements, is estimated to be £50K. The on-going cost to DVLA of full implementation of the Convention is estimated to be £66,000 per annum. These costs will be met from existing resources.

208.     There will be an additional cost to the Courts arising from the appeals procedure provided for in clause 59 but this will be negligible in the context of the Courts existing workload.

PUBLIC SERVICE MANPOWER EFFECTS OF THE BILL

209.     Apart from Part One, the Bill has a negligible impact on public sector manpower.

Part 1: Mutual Assistance in Criminal Matters

210.     The mutual legal assistance measures will have a limited impact on the workload of staff in Government departments.

211.     The UK Central Authority for Mutual Legal Assistance is located within the Home Office and is staffed by sixteen people. It will have its workload reduced in some areas, because of the introduction of the option of direct transmission of most procedural documents, outgoing requests for evidence and most incoming requests for Scotland and Northern Ireland. It will be expected to handle more requests for banking information as provided for in clauses 32-46 and also to deal with mutual recognition orders under the FD. The law and practice in these areas is new, and may cause an increase in cases where detailed consideration has to be given. On balance the work is not likely to require more staff, but the grade and skills of staff may need to be examined. Requests under the Protocol to trace bank accounts may require additional staff resources at NCIS.

SUMMARY OF THE REGULATORY APPRAISAL

212.     The following two measures of the Bill were deemed to have the potential to create a financial burden on business, charities or the voluntary sector:

Protocol to the MLAC

213.     The Protocol to the MLAC will create additional costs for the banking sector. A partial regulatory impact assessment of the measure was subject to a 12-week public consultation period which concluded on 1 November 2002. Two responses were received.

214.     The assessment estimated the costs likely to be imposed on the banking sector, and drew substantially on the RIA for the Proceeds of Crime Act. Two aspects of the Protocol were identified as having regulatory impact: the use for the investigation of certain offences of "customer information orders" to establish whether a person holds bank accounts in the UK, and the use of "account monitoring orders" to monitor transactions and account activity in identified accounts.

215.     Three implementation options were identified: 1) to rely on current legislation; 2) to legislate in accordance with a "minimalist" interpretation, i.e. applying the optional safeguards and limitations provided for in the instrument itself; or 3) to take a "maximalist" interpretation, choosing not to apply those optional safeguards and limitations.

216.     The partial RIA recommended adoption of option 2, which enables the UK to ratify the Protocol whilst retaining safeguards such as judicial oversight of authorisation of requests. Both responses agreed with this recommendation. The total costs of regulation are estimated to range between £1,262,500 and £3,768,750, although with greater computerisation of banking records these figures would fall substantially. The current legislation is drafted in line with Option 2.

217.     The full RIA can be found at http://www.homeoffice.gov.uk/rias/rias.htm

Convention on Driving Disqualification

218.     A partial regulatory impact assessment was carried out on the Driving Disqualification measures, which focussed on removing anomalies between the driver licensing systems in Great Britain and Northern Ireland and introducing mutual recognition of driving disqualifications and endorsements, so that the UK can ratify the Convention. Fifty-four organisations were consulted in Great Britain, representing motorists, business, voluntary, charitable, police and legal interests between 5th February to 4th May 2001. Twenty-one responses were received in total, almost all of which were supportive of the measures. Widespread consultation was also carried out in Northern Ireland, and a similar response was received.

219.     The proposals are intended to address the exploitation of existing loopholes and anomalies in driver licensing and penalisation between Great Britain and Northern Ireland. The assessment estimated that the impact would be largely upon individuals, although this in turn could impact upon businesses and charities if employees who are employed as drivers were subject to disqualification. However the impact was estimated to be minimal.

220.     The following options were considered in order to implement the Convention and to remedy driver licence anomalies between Great Britain and Northern Ireland: 1) To introduce mutual recognition of driving disqualification between Great Britain and Northern Ireland; 2) In addition to Option 1, to introduce mutual recognition of penalty points between Great Britain and Northern Ireland; 3) In addition to both these options to extend mutual recognition to disqualifications imposed otherwise than in respect of road traffic offences, such as Child Support Agency Disqualifications.

221.     As a result of consultation, option one was recommended. It was decided to defer detailed consideration of penalty-point recognition and disqualifications imposed for offences other than road traffic offences. The current legislation is drafted in line with this recommendation.

222.     The full RIA can be found at: http://www.roads.dft.gov.uk/consult/disqual/index.htm

MEMORANDUM ON THE IMPLEMENTATION OF EUROPEAN DIRECTIVES (TRANSPOSITION NOTES)

223.     This bill includes provisions giving effect to the following European legislation:

    —     Convention Implementing the Schengen Agreement 1990

    —     Convention on Mutual Assistance in Criminal Matters 2000

    —     Protocol to the Convention on Mutual Assistance in Criminal Matters 2001

    —     Framework Decision on the execution of orders freezing assets and of evidence (provisional agreement reached, March 2002)

    —     Framework Decision on combating terrorism 2002

    —     Convention on Driving Disqualifications 1998

    —     Framework Decision on combating fraud and counterfeiting of non-cash means of payment 2001

224.     Transposition Notes setting out how the Government will transpose into UK law the main elements of these Conventions and Framework Decisions are available from the House library or can be found on the Home Office website at http://www.homeoffice.gov.uk/oicd/eiu.htm.

EUROPEAN CONVENTION ON HUMAN RIGHTS

225.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the provision of the Bill with the Convention rights (as defined by section 1 of that Act). The statement has to be made before second reading. David Blunkett, Secretary of State for the Home Department, made the following statement:

In my view the provisions of the Crime (International Co-operation) Bill are compatible with the Convention rights.

Part 1, Chapter 2: Mutual Provision of Evidence

226.     Chapter 2 of Part 1 the Bill makes provision for the UK to seek assistance from abroad in obtaining evidence located abroad for use in UK criminal proceedings and investigations, and it also makes provision for the UK to provide reciprocal assistance of this type to other countries. The gathering of evidence may engage Article 8(1) of the ECHR, but an interference with this right may be justified under Article 8(2) insofar as it is in accordance with the law and is necessary in a democratic society in the interests of the prevention of disorder or crime. It is the Government's view that these criteria are fulfilled in the provisions of the Bill. In addition, the authorities acting under Chapter 2 will be subject to section 6(1) of the Human Rights Act which provides that it is unlawful for a public authority to act in a way which is incompatible with a Convention right (unless primary legislation requires this).

227.     Chapter 2 covers two types of assistance. Firstly, mutual legal assistance requests for evidence, which are only made where an offence has been committed or there are reasonable grounds for suspecting that an offence has been committed, and proceedings in respect of the offence have been instituted or the offence is being investigated. The Government considers that both incoming and outgoing requests of this type, which are not new forms of assistance, are ECHR compliant.

228.     The second type of assistance dealt with in Chapter 2 concerns the mutual recognition of evidence freezing orders, under the Framework Decision on the execution in the EU of orders freezing property or evidence. The Government considers that domestic freezing orders issued here to obtain evidence overseas will be ECHR compliant as they will be issued by UK courts which are bound to act in accordance with ECHR as implemented by the Human Rights Act. Under these provisions UK courts will equally be expected to give effect to an order issued in another Member State (an "overseas freezing order") unless either of two circumstances (in clause 21(6) and (7)) apply. Clause 21(7) relates to the ECHR and provides that a UK court may not give effect to an overseas freezing order if this would be incompatible with a Convention right. It is considered that these provisions are compatible with the ECHR.

Part 1, Chapter 4: Information about banking transactions

229.     Chapter 4 of Part 1 provides for requests between Member States for banking information required in relation to an investigation into criminal conduct. Two types of request are provided for: Customer Information Orders (CIOs) which ascertain whether or not a person holds or controls bank accounts in the requested state; and Account Monitoring Orders (AMOs) which require the requested state to monitor the transactions being carried out on a specified account held in that state.

230.     These provisions are modelled on provisions in Part 8 of the Proceeds of Crime Act 2002. The Government considers that these types of order have the potential to engage Article 8(1) ECHR, but interference with this right may be justified if it is in accordance with the law and necessary in a democratic society in the interests of the prevention of disorder or crime, or for the protection of the rights and freedoms of others. In addition, the Secretary of State (or, in Scotland, the Lord Advocate) has a discretion whether or not to arrange an application for an order. These will be mutual legal assistance requests, and will be issued by judicial authorities or authorities which appear to the Secretary of State as having the function of making these types of requests. Courts in the UK will have the discretion to decide whether or not to make such orders and, because it is unlawful for a public authority to act in a way that is incompatible with the ECHR under section 6(1) of the Human Rights Act, the Government considers that such orders will be compatible with ECHR.

231.     Clauses 32(7) and 35(6) for England and Wales, and clauses 37(7) and 40(6) provide that orders are to have effect in spite of any restriction on the disclosure of information (however imposed). However, these provisions do not override the rule of construction that the Convention rights apply, - the court making the order will be bound by the ECHR, and would not issue an order if it considers that disclosure of information would not be in accordance with the Convention rights. The Government is satisfied that domestic requests of this type will be ECHR compliant, as they will be issued by courts which are bound by ECHR as implemented by the Human Rights Act.

 
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Prepared: 19 March 2003