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Lord Kingsland: I shall be telegraphic in the few remarks that I am about to make before I withdraw my amendments.

I thank the Minister for drawing my attention to the parallel which the Government are drawing with the Terrorism Act 2000 rather than with the Proceeds of Crime Bill, which is the parallel that has informed many of these amendments. I shall obviously reflect on that issue. I am grateful to the noble Lord.

As to the question of reasonable grounds, the noble Lord went on to say that the grounds for making such an application would not be Xunreasonable". I am tempted to ask the noble Lord whether he sees any gap between reasonableness and unreasonableness. There must be some gap, otherwise the Minister would not have resisted my insertion of Xreasonable". I shall re-table the amendment. Perhaps between now and Report stage, which is not very far away, the Minister may wish to come back on that point. This is an important matter—the influence of the word Xreasonable" over the conduct of public officials.

The noble Lord was reassuring on the question of legal professional privilege. My noble friend Lady Buscombe will be returning to this point at a later stage and in a different context. I ask the Minister to reflect between now and Report whether he really thinks that the fact that it is unsaid is sufficient protection in the context of legislation which has international ramifications, and where legal privileges are viewed in a different light in different countries.

Finally, on the question of Xreasonable" excuse for failure to disclose—the question of the public domain—here we have reversal of the burden of proof. Normally, that is legitimate in circumstances where the facts that compose the excuse are uniquely in the domain or knowledge of the accused. I wonder whether, in the circumstances of Xpublic domain", that matches the normal circumstances in which the courts are prepared to tolerate reverse burdens of proof.

I am grateful to the Minister for taking particular care over responding to the amendments. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 24 to 36 not moved.]

Schedule 2 agreed to.

Clause 4 [Power to make order]:

6 p.m.

Lord Goodhart moved Amendment No. 37:

Page 3, line 8, after Xaction" insert Xinvolving terrorism"

The noble Lord said: This is a probing amendment. Clause 4 as drafted allows a freezing order to be made if a foreign government or resident is likely to take,

Xaction to the detriment of the United Kingdom's economy (or part of it)".

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That expression is extraordinarily wide. Perhaps I may give an example. A Japanese company is considering whether to build a new car manufacturing plant in the United Kingdom or in Switzerland. The Swiss Government offer the company a financial inducement to build its plant in Switzerland—something in the nature of, say, a tax holiday.

That is plainly action to the detriment of the United Kingdom economy. The result is that, at least in theory, the Treasury could make a freezing order stopping anyone in the United Kingdom, or United Kingdom nationals resident abroad, from making payments to the Swiss Government. Some people might say that that was quite right, but I am sure that it was not the intention. I want to probe why such a wide-ranging clause has been adopted.

I expect to be told that the reason is that the wording was drawn from Section 2 of the Emergency Laws (Re-enactments and Repeals) Act 1964, the section being repealed by the Bill and replaced with this provision. I accept that the wording is drawn from that section. But Section 2 of the 1964 Act dealt with a much narrower issue. It covered the case where a foreign government made an order requiring someone to make a payment or to transfer gold or securities to them and the United Kingdom Government was, under the 1964 Act, given power to block anyone within United Kingdom jurisdiction from complying with the foreign government's order. So the reference in that case to,

Xaction to the detriment of the United Kingdom's economy",

had a much narrower scope than the new one does. Indeed, the 1964 Act goes back to the days of exchange control. I suppose that the reference to gold is a reference to the days when gold had some real monetary function.

The result is that, whereas the wording was not excessively wide in relation to the 1964 Act, it is wholly excessive when applied to Clause 4 of the Bill. Therefore, Amendment No. 37 requires the action which is to the detriment of the United Kingdom economy to be action Xinvolving terrorism". I assume that that is the main part of what is specifically intended by this clause. It is not necessarily the right way, but I believe that the Government should ask the draftsman to re-examine the clause. As it stands, it is so excessively wide as to be unsatisfactory. I beg to move.

Lord Renton: Before the Minister replies, perhaps the noble Lord, Lord Goodhart, will bear with me for a moment. He seeks to insert into Clause 4 the words Xinvolving terrorism", whereas the clause deals with matters to the detriment of the economy.

We are entitled to look to the Long Title to help us to interpret the Bill. It is intended,

XTo amend the Terrorism Act 2000; to make further provision about terrorism and security",

and, as a separate item,

Xto provide for the freezing of assets".

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That is what Part 2, and especially Clause 4, purport to do. To insert the words Xinvolving terrorism", would limit the application of Clause 4, and that would be unfortunate.

Lord Goodhart: I am grateful to the noble Lord, Lord Renton, for raising that point. He is right. The Long Title of the Bill does contain the words,

Xto provide for the freezing of assets".

But my amendment as drafted was not intended as a final version. Its purpose is to raise with the Government the point that the power in Clause 4 goes so wide that it must go far beyond anything that it is intended to achieve. It seems to me that the Government should restrict the drafting of the clause. I accept that the Government's objective here may not be limited to terrorism, although no doubt it includes it. I should like them to accept, however, that the present wording is excessively wide and to reconsider it.

Lord Elton: I find myself surprised and rather alarmed to be in disagreement with my noble friend Lord Renton—possibly for the first time in my parliamentary career. I feel very strongly that emergency legislation should be restricted to the emergency to which it relates. To say that it is wrong to restrict it to that purpose seems to me—if I may respectfully say so—to be misguided.

My position is that one should not give more to a government legislating ventre a terre than is absolutely necessary—because everything that is given to them is scarcely considered. If it does not relate directly to the stated purposes of the legislation, it should not be given.

Lord Renton: I say with deep respect to my noble friend that he may not have realised that the words Xinvolving terrorism" are words of limitation. Here, the Government are rightly trying to protect the economy in a broader sense. If the words Xinvolving terrorism" are inserted in the way suggested, on occasions when there could be a detriment to the economy, but not necessarily involving terrorism, the limitation would be regrettable.

Lord Hylton: I should like to follow up the theme opened by the noble Lord, Lord Renton. I asked yesterday, at col. 242 of Hansard, whether Clause 4 dealing with freezing orders was sufficiently widely drawn to catch illegitimate funds—they derive sometimes from the proceeds of crime, corrupt practices and abuse of state power—placed in London by dictators of foreign states, their families and possibly members of their governments. They place those funds in London not for the benefit of their country but of themselves and their families. The Abacha family case from Nigeria is perhaps the most recent and the most notorious. But it is by no means the only one. It is probable that funds belonging to the Milosevic family followed routes through London. Other similar tyrants include the Duvaliers in Haiti, the Marcos in the Philippines, the so-called Emperor

28 Nov 2001 : Column 350

Bokassa in central Africa, General Mobutu in Zaire and possibly even Mr Saddam Hussein in Iraq. Those people have had a new word coined for them: kleptocrats. It should be possible to freeze such moneys on reasonable suspicion before they move out of London to other financial centres almost at the drop of a hat.

It has already been mentioned that the existing law which sometimes makes it possible to freeze moneys passing through London is the Emergency Laws (Re-enactments and Repeals) Act 1964 which continued emergency powers legislation of 1939. The difficulty is that that legislation has seldom been used effectively.

Clause 4(2) of the Bill states that,

Xaction to the detriment of the United Kingdom's economy (or part of it) has been or is likely to be taken by a person or persons".

A possible interpretation of those two lines might include harm done to the City of London, our banking and other institutions by their providing a place in which money looted from very poor countries can find a temporary resting place. That may be one way out of the difficulty. Another way might be through the Proceeds of Crime Bill which is still passing through another place. That may not be entirely satisfactory with regard to freezing because it touches only on the recovery of money by means of a civil action in this country.

I should like to see prevented the movement out of Britain, in particular London, or the spending, of funds belonging to very suspect dictators and members of governments. I hope that the Government will be able to give a reply. I have almost six pages of detailed accounts dated 4th October of this year on how various Nigerian moneys moved through London and on to banks in other countries between 1996 and 1999. I have since read in the press that it is thought that #100 million passed through the island of Jersey alone. The sums involved are very large and I imagine that Jersey got only a small fraction.

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