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Lord Renton: Before the noble Lord sits down, will he confirm that those various matters which occurred a year or two ago did not necessarily involve terrorism?
The Earl of Onslow: I disagree with the noble Lord, Lord Hylton. I do not disagree in any way with the ghastliness of the people he mentioned because they are very unpleasant people. However, some of our complaints have been that the Bill has had things attached to it which are extra to the prime purpose of emergency legislation. We might like to hang many things on to the Bill but noble Lords are complaining that there is too much of that already. Therefore, however worthy the point that the noble Lord, Lord Hylton, makes—and it is very worthy—the provision should not be tacked on to the Bill. There is too much of that already, and I hope that we shall take off much of it.
Lord Hylton: First, I agree with the noble Lord, Lord Renton, that the Nigerian money was nothing to do with terrorism.
On the points raised by the noble Lord, Lord Elton, and the noble Earl, Lord Onslow, yes, I would rather that the Bill were very narrow, dealing with an emergency. However, that is not what we have been presented with and it is not what the Government appear to wish to achieve. If the Bill is to be a wide measure, perhaps it can do some useful work as well.
6.15 p.m.
Lord Elton: Perhaps the Minister will reply to the specific point that what he wants to achieve relates to terrorism. If not, I disagree with the noble Lord, Lord Hylton, and agree with my noble friend Lord Onslow: this is not the vehicle for that provision. There should be a different vehicle.
Lord Thomas of Gresford: I agree with what has been said. The noble Lord, Lord Hylton, rightly raises the serious problem of money laundering through United Kingdom banks amounting to some 630 million dollars. That is a lot of money. In order to deal adequately with that issue, the legislation would have to consider much wider matters than are contained in the clause which deals simply with the Treasury freezing the assets of individuals.
I assume that it is not the Government's intention to legislate generally on money laundering because that is a huge subject which requires a separate Bill. Consequently, I support the submission made by my noble friend.
Lord Kingsland: Amendments Nos. 38 to 40, in the name of my noble friends Lord Dixon-Smith and Lady Buscombe, are in this group. I should like to speak briefly to them.
On Amendment No. 38, we all know that the United States is the prime target of terrorist groups such as Al'Qaeda and is likely to remain so. Countries other than the United Kingdom may be targets or become targets depending on the circumstances. After 11th September we all recognise that the terrorist threat is global and to be effective the response must be global too.
The power to freeze funds where they are likely to be used for terrorism is a useful counter weapon. Why should it be limited to protecting the UK economy and UK nationals and residents? To leave funds here, free for use in terrorism aimed at the United States economy or United States residents, is likely to cause outrage in Washington—and rightly so. Global terrorism needs to be tackled globally. The Government should take the powers necessary to restrain funds that are designed to be used for terrorism outside the United Kingdom.
On Amendment No. 39, we are, in a different way, linking up with the noble Lord, Lord Goodhart. We believe that the power to make a freezing order must be limited. It is not enough simply to show that the action about which a complaint is made will cause some detriment to the United Kingdom economy. We suggest that a freezing order can be made only if the
action that is going to cause a detriment to the United Kingdom economy is unlawful or has the intention of causing detriment.There can be no complaints from those affected by a freezing order if their action is unlawful or intended to cause detriment to the UK economy. If, on the other hand, lawful means are used and no detriment is intended, it would not be right for the Treasury to make a freezing order.
Lord McIntosh of Haringey: As we come to Part 2, I should like to stretch the conventions of the House by referring to an article on the front page of today's Evening Standard. It says that Omar Mohammed Othman, otherwise known as Abu Qatada and described as Osama bin Laden's key contact in Britain, today launched a legally aided High Court bid to be paid social security benefits. He has been cited on a United Nations list of suspected terrorists and, although living on benefits in west London, he was found to have assets of #180,000, which were seized. That is the subject of Part 1, which we have just agreed. He is now using legal aid to come back to the High Court to challenge the decision to suspend benefit. It may be helpful to say how Part 2 operates in respect of that application.
Part 2 makes it clear that the Treasury will have the powers to freeze assets in such circumstances. The provisions enable us to freeze funds when there is a threat to United Kingdom economic interests—I shall come to the constraints in a moment—or to the lives or property of United Kingdom citizens or residents. The freezing order can designate persons, groups or governments outside the United Kingdom and anyone, whether in the United Kingdom or abroad, who assists the funding of such people.
As Mr Othman is included in the United Nations list as an accomplice of bin Laden, under the Bill we could freeze his assets on the basis of intelligence, even if there was no investigation in this country. We could stop the payment of benefits, because the freezing orders bind the Crown. We could allow some release of funds, including benefits, where appropriate, to avoid undue hardship. That is provided in paragraph 3 of Schedule 3. We could seize—and have seized—the #180,000 cash that police found in Mr Othman's house under the provisions for cash seizure in Part 1, which I have already referred to.
I hope that it will be accepted throughout the House that those are appropriate uses of the powers provided in Parts 1 and 2.
The Earl of Onslow: If the money has been seized already, why do we need new powers to seize it? I ask that purely in the spirit of friendly curiosity.
Lord McIntosh of Haringey: Because Mr Othman is trying to get the money back and we want to make sure that he cannot.
Lord Thomas of Gresford: Do the Government intend to bring before Parliament orders dealing with
individuals? The machinery is that a statutory instrument should be laid before Parliament. Will that relate to one person?
Lord McIntosh of Haringey: I am coming to that. There is very severe parliamentary control of freezing orders. They are subject to affirmative resolution procedures. That is tough on Parliament, because there could be a number of them.
The amendments relate to Clause 4, which is the central element of the provisions that will allow the United Kingdom to take swift unilateral action to freeze terrorist assets. There will be two conditions. First, the Treasury must reasonably believe that an action threatens the United Kingdom's economy or part of it or the life or property of United Kingdom nationals and residents. Secondly, the action is to be taken by people resident outside the United Kingdom or by a foreign government.
It has been suggested that the concept of threats to the United Kingdom economy is very wide—much wider than terrorism. I am referring particularly to the amendment tabled by the noble Lord, Lord Goodhart. There are unavoidable and desirable constraints on the use of that power. Before we exercise it, we have to consider whether it is compatible with European Community obligations. It could not be used as a means of arbitrary discrimination or as a disguised restriction on the free movement of capital. International law, in particular the World Trade Organisation, would prevent the power being used as an illegitimate tool to protect UK businesses. The European Convention on Human Rights also imposes significant restrictions on the exercise of the power. We can freeze assets only when it is necessary in the general interest and where it is a proportionate interference with the rights of individuals.
The power is just one part of the sanctions regime. If a decision to impose sanctions is taken at European Community level or under a United Nations Security Council resolution, it would not be appropriate to use the power. There are safeguards in the power. As I said, the Treasury must have reasonable grounds for its belief and any freezing order is subject to affirmative resolution in both Houses. A freezing order will automatically cease to have effect two years after it is made and the Treasury has a duty to keep any freezing order under review and to consider whether a change in circumstance means that it is no longer appropriate for the order to continue in force. There are many constraints on what may seem to be a very broad power.
Amendment No. 37 is designed to restrict the power specifically to terrorism. The problem is that the power is intended to provide wide-ranging protection against threats to national security. One reason for these provisions is to counter the new risk of terrorism, but it is also important to cover such situations as wars or civil unrest affecting United Kingdom nationals and their property. The sanctions have been available for many years to counter actions that threaten UK economic interest, wherever that threat comes from.
I was interested in the comments of the noble Lord, Lord Goodhart, about the restrictions in the 1964 Act. I was not aware of the restriction to gold, but that Act has been used to justify sanctions against the governments and residents of Iraq and Serbia. That was widely thought to be a proper use of it. The amendment would prevent us from doing that in future. The criteria provide a clearer basis for action than simply terrorism, which allows for a more subjective interpretation.
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