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The Earl of Mar and Kellie: Members of the Committee should not take too seriously the fact of my support, which the noble Lord, Lord Kingsland, mentioned. However, that does not mean that I do not
support the amendments, most of which come from the Law Society of Scotland and 12 of which are in my name.The noble Lord explained the amendments very well, so I shall mention only Amendment No. 5. I shall be very surprised if that amendment is not agreed to. It draws the Committee's attention to the fact that Scottish banknotes are not legal tender. Unless the amendment is agreed to, it will be perfectly reasonable for terrorists to hold their ill-gotten gains—or otherwise—in Scottish banknotes. I am certain that that is not the Government's intention. I look forward to the Minister's comments.
Lord Williamson of Horton: I, too, want briefly to discuss Amendment No. 5, which deals with the forfeiture of terrorist cash. It is extremely important to include the Scottish point. The provisions should be absolutely watertight. Will the Minister explain whether currency that is not legal tender may be seized, and whether, therefore, the amendment is necessary? Terrorists are likely to be adept at acquiring Scottish notes and at shifting cash between currencies. I very much doubt whether they subscribe to the view that they should save the pound.
I shall give another example. It would be possible to transfer pounds into deutschmarks at the end of December this year. From 1st January those deutschmarks will not be legal tender under German law, but they could still be used for all transactions. That may seem a rather curious position but it would establish a loophole involving the transfer of terrorist cash. The amendment is important, irrespective of the Scottish point, which I also support. I hope that the Minister will make it clear that we do not have a loophole in this context.
Lord Howie of Troon: I, too, support the amendment. The Scottish element was eloquently raised by the noble Earl, Lord Mar and Kellie. It must have been 30 or 40 years ago when Scottish banknotes were acceptable in England provided that one paid a premium of sixpence, I believe, or a shilling, which the English put away in their piggybanks. The note, although not legal tender, was acceptable provided that one paid a sort of fine for using it. I wonder how that applies in this circumstance. Will Scottish notes be acceptable, provided that a premium is paid, as used to be the case 40 or so years ago?
Lord Rooker: I have not got an answer about Scottish banknotes; I make that clear now. This is what parliamentary accountability is all about—that highlights the scrutiny function of Committee stages. We will find an answer to that excellent question. I do not think that my noble friend Lord Howie was making a point about making money out of a premium.
Lord Rooker: However, I can see the possibility of doing so.
Lady Saltoun of Abernethy: I thank the Minister for giving way. There is no premium now.
5 p.m.
Lord Rooker: I did not mean it quite like that. I do not want to be misunderstood in Scotland, but I thought there might be another way of making a few bob on the side. In due course I shall move Amendments Nos. 20 to 22.
I shall do my best to respond to the amendments in the spirit in which they were introduced by the noble Lord, Lord Kingsland. I accept that most of them are probing amendments. I shall seek to answer the points raised. We shall have to return to Amendment No. 5 once I have taken advice from my learned friends about Scottish banknotes.
We do not believe that Amendment No. 5 is necessary. Where cash, for example, was known to be counterfeit it would be liable to seizure under normal criminal law for investigation of an appropriate offence. Where it was not known to be counterfeit it might be seized unwittingly in accordance with the Schedule 1 scheme, but once it was discovered to be counterfeit, it could be dealt with under the other powers. We do not believe there is any need for the cash seizure scheme to cover cash which is not legal tender. Powers to deal with such cash and remove it from circulation already exist. I say that on the basis that I shall come back on the point regarding Scottish banknotes. Therefore, I do not believe that Amendment No. 5 is necessary. It is possible that cash could be used for funding various activities. However, we believe that that is taken account of under existing provisions.
I turn to Amendment No. 6. The effect of removing subparagraph (2) would be to deny an authorised officer the possibility of seizing, for example, a traveller's cheque where he knew it was not completely terrorist cash. That is the one example I have. Paragraph 2 caters for instances where the authorised officer may not be able to divide cash into that which he has reasonable grounds to suspect to be terrorist cash and that which he does not; for example, where a traveller's cheque is seized.
That might arise where the officer has intelligence that part of the traveller's cheque was bought with legitimate money and part was bought with the proceeds of terrorism. It is important that the terrorist part of the cash in such circumstances is seized. The effect of the amendment would remove that possibility. Once the cash in the circumstances I outline was paid into an account, which must happen within 48 hours, paragraph 4(2) provides that the non-terrorist part must be repaid. We do not believe, therefore, that the amendment is necessary. I hope that the example I have given explains why the provision is in the Bill.
I turn to Amendment No. 9. It is not wholly clear whether the amendment relates to appeals against forfeiture of seized cash or to the restraint orders made under Part 2 of Schedule 1 to the Bill. In the case of a forfeiture order, any other party to the proceedings who is aggrieved by the order may appeal against the order to the Crown Court. That would include the
person from whom the cash was seized and also possibly a victim of criminal conduct who claimed that the cash belonged to him.In the case of a restraint order made by the High Court, anyone affected by the order may appeal to the Court of Appeal. In the case of an appeal against the forfeiture order to the Crown Court, Clause 2(2) of the Bill ensures that legal aid will be available for such proceedings. Likewise, anyone affected by a restraint order can apply to the High Court for the order to be varied or discharged where civil legal aid provisions would apply and a person would be able to appeal from a High Court decision to the Court of Appeal in the normal way. I hope that that will satisfy the noble Lord.
Amendments Nos. 7, 10, and 17 seek to extend the period from 48 hours to eight days. We believe that 48 hours is an appropriate length of time and follows, as I said earlier, the longstanding precedent set out in the drug trafficking provisions dating from 1990. The provision has been used and we have every reason to believe that it has worked extremely well.
At the 48-hour point, an order for continued detention can be made if there are reasonable grounds for suspecting that the cash is terrorist cash and that an investigation into the cash or criminal proceedings is underway. We do not believe that it is appropriate to allow cash to be detained for eight days before a court hearing takes place. I am not sure why the period mentioned is eight days. I have not had the advantage of the briefing. If the answer is not satisfactory, perhaps the noble Lord will come back on that point.
I turn to Amendments Nos. 8 and 11. The person with an interest in the cash seized and detained who claims that the cash seized or part of it is not terrorist cash already has a remedy under the provisions of the Bill and under the revised magistrates' courts' rules. We agree with the sentiment of the amendment. It is right in principle that persons affected by seizure should be able to make the court aware of their concerns. That is why paragraph 3(4) of Schedule 1 ensures that the order for the detention of the seized cash must provide for notice to be given to persons affected by it. Furthermore, the revised magistrates' courts' rules will enable those who are given notice under paragraph 3(4) to make representations. The timescales involved for the first hearing will not mean, however, that the opportunity to make representations at that point will be possible. For those reasons, we see no need for the amendment.
The effect of Amendment No. 12 is to do away with the requirement to place certain instruments—the subject of seizure—in an interest-bearing account on the simple grounds that it is not possible to do so. We believe that the amendment is aimed at the fact that it may be difficult to pay some of the instruments defined in paragraph 1(2) as being cash into an interest-bearing account.
I understand that it is possible to pay all types of monetary instruments defined as cash under paragraph 1 of the schedule into such an account.
Bonds and bearer shares will first have to be converted to cash. If the definition of Xcash" is extended using the order-making power under paragraph 1(3)—I am not making law on my feet, but I suspect that provision may have to be extended to cover such bank notes as were referred to earlier—we would ensure that any additional instruments could also be paid into an interest-bearing account.It is important that cash is paid into an interest-bearing account. There is a simple reason for that. It will avoid the possibility of paying compensation in lieu of interest if a forfeiture order is not made. Therefore, we see no need for the amendment.
Amendment No. 13 seeks to link the terrorist cash seizure scheme with criminal proceedings. We believe that that would be a big mistake. It is not appropriate to make that link as the seizure scheme stands alone. It is not part of the criminal proceedings that might or might not follow. The seizure scheme is a civil scheme focusing on the cash. It has nothing to do with the individual, his guilt or innocence. It would be a mistake to link those. It may be that an individual linked to the cash is facing proceedings for terrorism matters. However, that will not necessarily be the case. Cash might be found without anyone present or any obviously identifiable owner; or the carrier of the cash which may be used for terrorist purposes may be wholly innocent. Therefore, such a link would be a mistake. There is no link between the cash proceedings and any criminal proceedings. That is why Clause 1(2) provides that the powers in Schedule 1 are exercisable in relation to cash whether or not proceedings have been brought for an offence in relation to the cash. The amendment would undermine Clause 1(2). For those reasons I hope that the noble Lord will reconsider and, in due course, not move the amendment.
Amendment No. 14 seeks to make forfeiture proceedings under Part 3 of Schedule 1 to the Bill civil proceedings. I draw the noble Lord's attention to that. I realise that the Bill has been rewritten and slightly changed from how it was in the other place. But the issue is already on the face of the Bill in Clause 1(1). It refers to forfeiture in civil proceedings. Therefore, that matter is actually covered.
Amendment No. 15 proposes that the rules of court make provision as to the practice and procedure in connection with proceedings relating to forfeiture. A power to make relevant rules of court is already available by virtue of Section 144 of the Magistrates' Courts Act 1980 and Section 84 of the Supreme Court Act 1981. Rules governing the procedure in relation to detention and forfeiture of terrorist cash were made under those provisions when the Terrorism Act 2000 came into force earlier this year. That was despite the express reference to another rule-making power in Section 31 of the Terrorism Act 2000. The question which immediately comes to mind is why is it necessary to have this duplication? I do not have the answer. However, the fact is that the rule-making provisions are there. We therefore do not believe that the amendment is necessary.
Amendment No. 18 concerns compensation in paragraph 10 of Part 4 of the Schedule. If a person's cash is detained but not ultimately made the subject of forfeiture, interest is paid. But if the cash was not put into an interest-bearing account he may be paid compensation in lieu of interest in accordance with the rules set down in paragraph 10(2) of Schedule 1.
The amendment is concerned with the circumstances in which additional compensation may be paid. There are bound to be wholly exceptional circumstances where the normal interest is not sufficient compensation. I have in mind circumstances where a person's cash was detained, and so was unavailable to him, and then was subsequently returned, but that cash had been part of a successful business deal—for example, the buying and selling of a house—and the deal had fallen through to the extent that there had been a considerable loss; in those circumstances he would have grounds for seeking compensation outside and above the interest. But those would be very exceptional circumstances.
There is a lower test for compensation. If we have a lower test, such as that implied in the amendment, then authorised officers may be fearful of making the seizure orders because they might be responsible for large pay-outs. Given the seriousness of the issues at stake, it is not right to bind them in the way that the amendment proposes. Nevertheless, where there are exceptional circumstances, compensation would naturally be payable.
I was not completely clear as to precisely what type of cash Amendment No. 19 was designed to catch. The noble Lord gave an example but the amendment seems to go much wider than the current definition of Xproperty obtained through terrorism" in paragraph 11(1) of Schedule 1. Property obtained by or in return for acts of terrorism might have been payment for committing a murder. Obtaining property by or in return for acts carried out for the purposes of terrorism might include stealing a car to perpetrate a terrorist act. The purpose of bringing cash which is the proceeds of terrorism within the scheme—in addition to cash which is intended for use in terrorism and cash which belongs to proscribed organisations—is to prevent terrorism. In many cases the proceeds of terrorism are recycled to further terrorist causes. To cast the net too wide would make it difficult to justify cases; for example, how would forfeiting proceeds in the above example of the bargaining of property help to prevent terrorism? Therefore, we cannot support the amendment.
The point is that we are dealing with a civil scheme. We must separate the issue from the people concerned. The people concerned who are linked to the cash, however tenuously, may be wholly innocent, even though it is subsequently proved that that cash was deployed for terrorism.
Amendments Nos. 20, 21 and 22 standing in my name make simple additions to Part 5 of Schedule 1 to the Bill. They tidy up the definition of Xproperty earmarked as terrorist property". Members of the Committee will be aware that Schedule 1 sets out the
scheme relating to the cash forfeiture. Part 5 explains when the cash which is, or represents, property obtained through terrorism, falls within the scheme.Amendments Nos. 20 and 22 are simple drafting amendments. Amendment No. 21 ensures that where property falls outside the scheme and is exchanged for other property, that property also falls outside the scheme. For example, where property obtained through terrorism is sold to a bona fide purchaser who has no idea of its origins, that property will fall outside the scheme by virtue of paragraph 16(1) of Schedule 1. If the bona fide purchaser sells the property in return for cash that cash too will fall outside of the scheme. The amendment ensures that that is the case. I hope that in due course Members of the Committee will accept the three amendments.
5.15 p.m.
Lord Howie of Troon: Before my noble friend sits down, perhaps he can clear up a point for me. When he refers to Xcash", does he include under that term Xcurrency" whether legal tender or not?
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