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Baroness Scotland of Asthal moved Amendments Nos. 91 to 95:

Page 16, line 25, leave out ("Secretary of State") and insert ("relevant Minister").

Page 16, line 27, leave out ("Secretary of State") and insert ("relevant Minister").

Page 16, line 38, at end insert--

("( ) a person serving a sentence in a prison, or in a young offenders institution, to which the Prisons (Scotland) Act 1989 applies,").
Page 16, leave out lines 41 and 42 and insert--

("(ba) a person detained in custody otherwise than in pursuance of a sentence, including in particular--
(i) a person in custody awaiting trial or sentence,
(ii) a person committed to prison for contempt or for default in paying a fine,
(iii) a person in custody in connection with proceedings to which Part II or III of Schedule 2 applies (extradition or other delivery proceedings),
(iv) a person detained under any provision of the Immigration Act 1971.
(5A) For the purposes of the Immigration Acts (within the meaning of the Immigration and Asylum Act 1999) a person detained under any provision of the Immigration Act 1971 is not to be regarded as having left the United Kingdom at any time when a transfer warrant is in force in respect of him (including any time when he is in the custody of the ICC).").
Page 16, line 42, at end insert--

("(6) In this section, "the relevant Minister" means--
(a) in relation to a person detained in England and Wales or Northern Ireland, the Secretary of State;
(b) in relation to a person detained in Scotland, the Scottish Ministers.").

On Question, amendments agreed to.

Clause 32, as amended, agreed to.

Clauses 33 and 34 agreed to.

Schedule 4 agreed to.

Clauses 35 to 37 agreed to.

Schedule 5 [Investigation of proceeds of ICC crime]:

Lord Kingsland moved Amendment No. 96:

Page 51, line 37, leave out paragraph 5 and insert--

("5.--(1) A person affected by the making of an order under this Part of this Schedule shall be entitled to apply on 24 hours' notice in writing for the discharge of the same.
(2) The application shall be heard by a judge, other than the judge who made the order, without notice.
(3) An appeal against the refusal to discharge shall lie without leave to the Court of Appeal (Criminal Division).").

The noble Lord said: Most telegraphically, Schedule 5 deals with the investigation of proceeds of an ICC crime. Part I deals with production or access orders and the amendment seeks to replace paragraph 5 of the schedule. We believe that provision should be made on the face of the Bill for a right to apply on notice for the discharge ofsuch an order and for an appeal against refusing to discharge. I beg to move.

Lord Williams of Mostyn: Clause 29(4) exactly mirrors Sections 93H(7) and 93H(8) of the Criminal Justice Act 1988. The amendment would have the effect of putting on the face of the Bill provisions which I am happy to reassure the Committee the Government intend to make in Crown Court Rules on

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the general effect of production and access orders. With his usual courtesy, the noble Lord nods. I could go further and explain the unmitigated defects of the amendment as drafted, but I believe that it is purposeless.

Lord Kingsland: I am most grateful to the noble and learned Lord. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 5 agreed to.

Clause 38 agreed to.

Schedule 6 [Freezing orders in respect of property liable to forfeiture]:

The Deputy Chairman of Committees (Lord Brougham and Vaux): I should advise the Committee that if Amendment No. 97 is agreed to, I cannot call Amendments Nos. 98 and 99. If Amendment No. 98 is agreed to, I cannot call Amendment No. 91.

Lord Howell of Guildford moved Amendment No. 97:

Page 55, line 43, leave out from beginning to end of line 24 on page 57.

The noble Lord said: In effect Amendments Nos. 97 and 98 cancel each other out or cover the same ground. Amendment No. 97 would remove from the schedule paragraph 9 and Amendment No. 98 would remove both paragraphs 9 and 10. These amendments are concerned with the position of unsecured creditors in relation to a bankrupt's estate, which is already subject to Crown preference for debts and the effect of mortgage securities.

As I understand it, under the schedule as currently drafted if a person subject to ICC jurisdiction is adjudicated bankrupt any property owned by him which is subject to a freezing order, whether made on the basis of an actual conviction and forfeiture order, or on the basis of a threat of one--either can be the case under this legislation--will not form part of his estate. I am advised that in real terms this means that the unsecured creditors of the bankrupt, which exclude the Crown as preferential creditor, will be deprived of the benefit of those assets which form part of the estate available for distribution. One must ask two questions. First, where does the Crown fit into this, or does the ICC have preference over Crown preference? Secondly, what justification is there for a provision which in the event of insolvency places the unsecured creditors in an even worse position than many believe they are already? These amendments have the effect of removing from the schedule what we regard as the offending paragraphs. I beg to move.

Lord Williams of Mostyn: I wish I was able to claim such intimate knowledge of the bankruptcy legislation as the noble Lord. I am happy to say that God has saved me from that in the past but his protection is now being taken away from me. The noble Lord is quite right. However, if as the amendments suggest, paragraphs 9 and 10 were removed, there would be no provision left in the Bill as to how freezing orders

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should be enforced. I also agree with the noble Lord that if paragraph 9(1) was deleted it would mean that when a person became bankrupt after a freezing order, property subject to that order could not be used to pay off a bankrupt's debt. If that provision was removed we would be unable to implement an ICC forfeiture order and thus would be in breach of our obligation under the statute to enforce it. If the noble Lord suggests that perhaps the degrees of preference are sometimes capable of unfairness, in theory that may well be so. However, we have our statutory obligations.

The noble Lord asked me a particular question about precedence. I am assured that the answer is that the precedence given to the ICC is the same as precedence given to domestic criminal confiscation orders and overseas orders. The recovery of the proceeds of crime takes precedence. I hope that that answers the noble Lord's last question. We believe that we must give precedence to our international obligations. If the amendments were carried the gap created would mean that we could not do it.

Lord Howell of Guildford: I am grateful to the noble and learned Lord. He takes a very kind view of my grasp of these matters, but I assure him that I do not plead guilty to being an expert in this field either. However, based on layman's experience there is considerable discontent even now as to the position of the Crown as preferential creditor. Many believe that in a commercial nation that should not be applied with its usual vigour.

Lord Goodhart: I am grateful to the noble Lord for giving way. My understanding is that the Crown is a preferential but not a secured creditor. The Crown simply has a right of preference over other unsecured creditors and, therefore, is not perhaps in such a favourable position as the noble Lord suggests.

Lord Howell of Guildford: I defer to the noble Lord. I understand that that is the position, which many people still regard as unsatisfactory. This legislation places someone else at the head of the queue. That may be necessary in order to conform to the statute, which is a hoop from which we cannot escape in this particular legislation. However, I do not believe that this news will be joyfully received. In the light of the response of the noble and learned Lord, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 98 not moved.]

6.15 p.m.

Baroness Scotland of Asthal moved Amendment No. 99:

Page 55, line 45, after ("order") insert (", or an order having the like effect in Scotland,").

The noble Baroness said: In moving Amendment No. 99 I should like to speak also to Amendments Nos. 100 to 102. These amendments seek to ensure consistency between England, Wales, Northern

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Ireland and Scotland. The purpose of the amendments is very simple. At present paragraphs 9 to 12 of Schedule 6 explain how a freezing order made by a court in England and Wales or Northern Ireland would interact with legislation on bankruptcy and insolvency. In certain circumstances it would mean that property subject to a freezing order would be excluded from the estate of a bankrupt individual or the property of a company being wound up. Since our insolvency and bankruptcy legislation vests property in the trustee wherever it is, it may be that the property of the bankrupt individual is in Scotland and conceivably may be subject to a freezing order issued by a Scottish court. The amendments ensure that the provisions of paragraphs 9 to 12 of Schedule 6 apply to a freezing order issued by a Scottish court under the equivalent Scottish legislation as they would to a freezing order made under the Bill. I believe that this is a sensible technical change. I beg to move.

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