The
Committee consisted of the following
Members:
Chairman:
Mr.
Edward O'Hara
Blunt,
Mr. Crispin
(Reigate)
(Con)
Brake,
Tom
(Carshalton and Wallington)
(LD)
Caborn,
Mr. Richard
(Sheffield, Central)
(Lab)
Campbell,
Mr. Alan
(Lord Commissioner of Her Majesty's
Treasury)Cormack,
Sir Patrick
(South Staffordshire)
(Con)
Cox,
Mr. Geoffrey
(Torridge and West Devon)
(Con)
Gray,
Mr. James
(North Wiltshire)
(Con)
Hillier,
Meg
(Parliamentary Under-Secretary of State for the Home
Department)
Hodgson,
Mrs. Sharon
(Gateshead, East and Washington, West)
(Lab)
Huhne,
Chris
(Eastleigh)
(LD)
Kilfoyle,
Mr. Peter
(Liverpool, Walton)
(Lab)
Levitt,
Tom
(High Peak)
(Lab)
Lucas,
Ian
(Wrexham)
(Lab)
MacShane,
Mr. Denis
(Rotherham)
(Lab)
Reid,
John
(Airdrie and Shotts)
(Lab)
Ruffley,
Mr. David
(Bury St. Edmunds)
(Con)
Mark Oxborough, Committee
Clerk
attended the
Committee
Eleventh
Delegated Legislation
Committee
Wednesday 2
July
2008
[Mr.
Edward OHara in the
Chair]
Draft Crime (International Co-operation) Act 2003 (Designation of Participating Countries) (England, Wales and Northern Ireland) Order 2008
2.30
pm
The
Parliamentary Under-Secretary of State for the Home Department (Meg
Hillier): It is a pleasure to serve under your
chairmanship for the first time, Mr.
OHara.
When
the Crime (International Co-operation) Act 2003 came into force in
April 2004, it streamlined and modernised the United Kingdoms
mutual legal assistance relations with the rest of the world. Today, in
an effort further to improve international co-operation, we are seeking
to designate the United States of America under various sections of the
Act. The order reflects the fact that, on 25 June 2003, an agreement on
mutual legal assistance between the USA and the European Union was
concluded. As a result of the provisions in that agreement, it was
necessary for the UK to amend its bilateral mutual legal assistance
treaty with the
US.
The
terms of the amended bilateral treaty, which reflect the provisions of
the EU-US agreement, relate to banking information and make provision
for parties to make and execute requests for assistance in locating
banking accounts and to provide banking information relating to
criminal investigations. That is similar to the terms in European
agreements aimed at tackling serious international crime and, in
particular, economic crime and money laundering. The domestic powers to
make and receive such requests are found in chapter 4, part 1 of the
2003 Act.
Designation
of the USA under section 52(1)(b) of the Act for the purposes of
sections 32, 35, 43, 44 and 45 will allow for requests for such orders
to be executed in England, Wales and Northern Ireland, and for such
requests to be made to the USA by certain judicial and prosecuting
authorities in the UK.
Mr.
James Gray (North Wiltshire) (Con): The Minister says that
the provision applies under sections, 32, 35, 43 and 45 of the 2003
Act, but rather bizarrely the explanatory notes stipulate only sections
32, 43 and 45. Will she enlighten us on section
35?
Meg
Hillier: I shall pick up on that point in my closing
remarks.
Designation
under sections 35 and 44, on account monitoring orders, is not required
under the strict terms of the agreement, but the inclusion of such a
designation would be sensible, especially given that the Secretary of
State retains a discretionthis is important to
highlightover whether to issue directions under section 35.
Likewise, no express provision has been made limiting the designation
of terrorist and money laundering cases, as is permissible under the
agreement. The Home Secretary retains that
discretion.
Mr.
Gray: I am not nit-picking, but the Minister has now
referred to section 35, which is not covered in the explanatory notes.
This is really quite important, because if her speech is to mean
anything, the Committee should know what section 35 is. I appreciate
that she might need help from the cavalry over the hill, as it were,
but perhaps she could obtain that as quickly as
possible.
Meg
Hillier: I am always happy to expand on the issues, but it
is important to stress that section 35 gives the Home Secretary
discretion over whether to issue a direction, which is an important
safeguard in the Act. It would be open to the Home Secretary to refuse
to make a direction where a request is made in a non-terrorist or money
laundering case. Of course, further protections are in place, in that
once the Secretary of State has made her decision, it is referred to
the Crown Court to decide whether it should
proceed.
Mr.
David Ruffley (Bury St. Edmunds) (Con): I hope that I can
be of assistance to the Committee. I think that my hon. Friend the
Member for North Wiltshire was driving at the distinction between a
customer information order and an account monitoring order. The latter
lies at the heart of section 35 and is different from a customer
information order. For the benefit of the Committee, will the Minister
flesh out that important distinction, which involves different
threshold tests? What is the difference between those two
orders?
Meg
Hillier: Section 35 covers US requests to the UK for that
account monitoring informationI hope that that answers hon.
Members questionsand section 44 covers UK requests to the US.
It is important, therefore, that both are covered. I apologise if the
explanatory notes are not clear; I shall look into why that
is.
In
relation to outgoing requests, there is no such discretion. It would be
up to the United States to decide whether to refuse a request, on the
basis that it was outwith the treaty.
Overall, this
order is an important step as there are currently no formal
arrangements to obtain such evidence from the United States. The new
arrangements will improve our ability to achieve justice for British
citizens who are victims of serious crime, and they are a step that I
hope all hon. Members will be keen to back. The amended treaty between
the United Kingdom and the United States will provide both Governments
with a sound framework for future co-operation. We are clear that
criminals must not escape justice simply because the evidence required
is located overseas, and it is right that the United Kingdom support
other countriesour international partnersin the same
way. I therefore invite hon. Members to agree that these designations
are necessary to ensure that we comply with our international
obligations. That is what this order seeks to achieve and I urge hon.
Members to support
it.
2.36
pm
Mr.
Ruffley: It is always a pleasure, Mr.
OHara, to serve under your watchful eye.
The order that
we are discussing today reflects the fact that crime in the 21st
century has no national borders. Particularly in the case of financial
crime, organised criminals or terrorist groups can send money around
the globe in an instant, in the furtherance of their evil trade. So we
must be tough on terror and the means by which terror is
prosecuted.
However,
questions are raised by the order. I do not wish to detain the
Committee unnecessarily, but there are civil rights issues that arise.
Also, there are questions to be asked about what, in practice, the US
authorities might do with the new powers that are, in effect, being
conferred upon them by the
order.
As
the Minister said, and also for the sake of clarity, we need to
understand the genesis of the order. An agreement on mutual legal
assistance between the United States of America and the European Union
was concluded in June 2003. As a result of the provisions of that
agreement, it was necessary for the UK to amend its previous
long-standing bilateral mutual legal assistance treaty with the United
States. The terms of the amended bilateral treaty made provision for
the parties to make and execute requests for assistance in obtaining
customer information from financial institutions. That is the subject
of the order before us.
The order
will designate the USA as a participating country under section
51(2)(b) of the Crime (International Co-Operation) Act 2003, for the
purposes of sections 32, 43 and 45 of the Act. The order
will also designate the USA as a participating country for the purposes
of sections 35 and 44 of the Act.
Section 32
confers on the Secretary of State a discretionary power to direct a
police force or customs officer to apply for a customer information
order when a request for such information is received from a
participating country. That is different from a monitoring order, and I
shall explain the distinction in a moment.
Customer
information orders relate to instances where an individual or a
corporate entity holds an account with a financial institution, and
basic information about the individual or company is soughtfor
instance, account numbers, date of birth, current and recent addresses
of individuals, company number, VAT number and registered address for
companies, where applicable.
Requests for
such customer information are to be received by the Secretary of State.
The Secretary of State will then instruct a senior police or customs
officerat least a superintendent, or equivalent customs
rankto apply to a Crown court judge for a customer information
order. Such an order requires the specified financial institution to
provide any customer information that it has on the person specified.
The information is passed to the Secretary of State for onward
transmission to the requesting authority, which could be the United
States or other participating countries.
Before
granting a customer information order, a judge must be satisfied that
the person specified is subject to an investigation in the requesting
country and that the investigation concerns serious criminal conduct. I
emphasise that point, because there is a different threshold for the
other order. The judge must also be satisfied that the conduct would be
an offence in the United Kingdom and that the order is sought for the
purposes of investigation. It cannot be used for some kind of fishing
expedition. A judge in the UK must be satisfied on
those criteria when our Secretary of State makes such a request,
following a request by an authority in another
country.
Mr.
Gray: My hon. Friend is being extremely clear, and I am
learning a great deal from listening to him, but will he answer a
query? Would the NatWest three have been extradited under the
conditions that he describes for the
order?
Mr.
Ruffley: Seeking extradition for criminal offences for
which a prima facie case has been made before a UK judge is different
from merely seeking information on individuals. That case involved
criminal offences, and a prima facie case was made in this country,
which is why the extradition took place. We are dealing with the
attempted acquisition of information by foreign authorities, prior to
any charges being made in that country against individuals who are
resident here that might lead to an extradition. They are two
qualitatively different levels of criminal inquiry: one concerns a
criminal inquiry, whereas the NatWest three case involved criminal
proceedings.
Similar
powers exist in domestic law under the Proceeds of Crime Act 2002, but
for a narrower class of offences. The order that I have just described
involves a threshold test of serious criminal conduct. If a financial
institution in the UK does not comply with its obligations under a
customer information order, it commits an offence carrying a maximum
fine of £5,000. Section 43 of the 2003 Act will enable judicial
and prosecuting authorities to make outgoing requests for customer
information orders when the UK makes requests regarding individuals in
other jurisdictions. Section 45 of the Act provides that such requests
will be forwarded to the participating country by our Secretary of
State.
The
order that I described differs from, but is related to, the account
monitoring order, which is subject to sections 35 and 44 of the Act.
Customer information orders involve identifying accounts and providing
static information about them, whereas account monitoring orders seek
details of account transactions over a period of time. An account
monitoring order could be sought once an account has been identified
through a customer information order or, if the account has already
been identified, a requesting authority could move straight to a
monitoring order without needing to go down the customer information
order route.
The mutual
assistance agreement allows much greater discretion in the handling of
requests for account monitoring. In the words of the EUs
explanatory report, because the measure is new, it
only
obliges
Member States to set up the mechanism...but leaves to each Member
State to decide if and under what conditions the assistance may be
given in a specific
case.
That
assistance involves monitoring over a period of time, whereas the
customer information order is merely about identifying an account or
accounts. The United Kingdom appears to have decided to allow account
monitoring assistance on a fairly wide basis. I understand that that is
because we already have quite a wide ambit under domestic disclosure
laws.
The process
of procuring an account monitoring order is almost identical to that
for a customer information order. The Secretary of State directs a
senior policeman
or customs officer to apply to the court for an order, and the
conditions that I described obtain. However, there is a big difference:
account monitoring orders can be granted in respect of simple criminal
conduct, so it is not necessary for serious criminal conduct to have
occurred, as is required for customer information orders. The threshold
test is
different.
The
Act sets the higher test of serious criminal conduct for customer
information orders, as I said. We can attribute that difference to the
language of the protocol. Can the Minister share with us why she thinks
the protocol uses a different threshold test? It is puzzling to most of
us and we look forward to her reply.