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Lord Kingsland moved Amendment No. 42:
- Page 97, line 37, after Xis" insert Xreasonably"
The noble Lord said: Amendment No. 42 provides that disclosure to the Treasury under that part of the Bill should take place,
- Xas soon as is reasonably practicable".
As currently drafted, the Bill states that a freezing order can require disclosure to the Treasury of relevant information as soon as is practicable after the information is received. However, there may be situations in which a person cannot make the disclosure, for good reason, as soon as would otherwise have been practical. To reflect those situations we suggest that provision is made for such disclosure to be made,
- Xas soon as is reasonably practicable".
A similar sentiment lies behind Amendments Nos. 46 and 47, the first in relation to Clause 11(1)(c) and the second in relation to Clause 11(2)(c). I beg to move.
Lord Monson: Perhaps I may point out that there is a drafting defect in both Amendments Nos. 46 and 47, no doubt understandably in view of the haste with which the amendments had to be tabled. The definite article has been omitted in front of the word XTreasury" and it does not read quite right without the word Xthe" in front of it.
Lord McIntosh of Haringey: It may be helpful if I say that we understand that these amendments are intended to make it explicit on the face of the Bill that any amendment to a freezing order as well as the making of the order is based on the Treasury's reasonable belief that the relevant conditions are met. We agree with that principle.
Our view is that that is the effect of the current drafting reads in accordance with the Interpretation Act 1978. However, we agree that the Bill should expressly provide that in making changes to freezing orders the Treasury must have a belief, as well as stating that it has a belief, that the relevant conditions are met, and that that belief should be reasonable. We shall table amendments on Report to meet that point.
Lord Kingsland: I am grateful to the Minister for that undertaking. In those circumstances it is proper for me to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kingsland moved Amendment No. 43:
- Page 4, line 5, at end insert Xand must revoke such freezing order if it ceases to have reasonable grounds to consider that the conditions set out in section 4 are fulfilled"
The noble Lord said: In moving Amendment No. 43 I shall speak also to Amendments Nos. 44 and 45.
However necessary may be the powers to freeze funds on the say-so of the Government, those powers are draconian and require protection against executive abuse. Just as a power must be exercised only if certain conditions, as set out in Clause 4(2), are fulfilled, so the order should be revoked as soon as the conditions cease to be fulfilled.
There appears to be no protection in the Bill as drafted against the Treasury letting a freezing order run for the full two years, even if the reasons for it have fallen away. Amendment No. 43 requires the Treasury to lift the order when the conditions are no longer fulfilled. So the Xvictim" of the order—if I may use that expression—has some legal recourse if the Treasury fails to so act.
I turn to Amendment No. 44. There appears to be no provision in the Bill as drafted to allow for the renewal of a freezing order at the end of the initial period of two years. That might have the bizarre effect that the Treasury was forced, as a pure matter of timing, to release funds when it had reasonable grounds to suppose the funds would immediately be used to launch a terrorist attack. It is even more bizarre to allow detention indefinitely, without trial, but impose a time limit in the much less important context of money.
Although we would not normally argue for a swingeing measure, such as a freezing order, to be strengthened, we are prepared to accept that, in the context of terrorism and London's pivotal position as a financial centre, there may be a strong case for renewal in some circumstances—provided there is the possibility of recourse to the courts as proposed in our amendment to line 5. Amendment No. 44 is designed to achieve that.
Finally, I turn to Amendment No. 45. A freezing order prohibits all those in the United Kingdom, and United Kingdom nationals elsewhere, from making funds available to or for the benefit of specific persons named or described in the freezing order. If such a person acts in breach of a freezing order he can be sent to prison for two years.
At the very least, there should be some convenient means by which the existence of the freezing order is brought to the attention of the criminal party. It is hardly fair that the Treasury can make a freezing order, which carries with it criminal sanctions, and not publish it in some way so that innocent people do not inadvertently become criminal.
Such publication can be achieved relatively easily by simply inserting the appropriate notice in the Gazette. It is our understanding, or at least our hope, that many banks regularly read the Gazette to check winding up petitions which have the effect of freezing a company's assets. That is, or should be, an established practice in the banking community. If the list of freezing orders are then published, either before or after the list of outstanding petitions, those responsible for checking such a list will be able to look at the list of freezing orders as well.
This is an important point because the whole purpose of a freezing order is to freeze money and not to catch innocent people unawares and send them to prison. The aim is to freeze the cash and that is achieved if the freezing orders are brought to the attention of those who hold the cash. I beg to move.
Lord Renton: I believe that the Government would welcome the amendments to which my noble friend has just spoken. Clause 7 as it stands is unusual. It merely says,
- XThe Treasury must keep a freezing order under review".
Lord McIntosh of Haringey: I would have thought that the noble Lord, Lord Renton, would approve of the taciturnity and precision of Clauses 7 and 8. The noble Lord, Lord Kingsland, might have called them Xtelegraphic". I believe that they are absolutely clear and admirably short.
Before I deal with them perhaps I may say something about my response to Amendments Nos. 46 and 47. I said that we would introduce amendments at Report stage to cover these points. I did mean Amendments Nos. 46 and 47 rather than Amendment No. 42, which is a separate issue.
Clauses 7 and 8 represent wonderful drafting. They underline the emergency nature of the provisions. They provide for an ongoing review of all freezing orders. They set a maximum period of two years after which freezing orders will cease to come into effect. As regards Amendment No. 43, we do not need to specify in that context that the Treasury must revoke an order when the condition under which it was made is no longer fulfilled. That is clearly the intention underlying Clause 7. As part of our obligation to review we pay careful attention to any change in circumstances. There is no point in having a review unless one is prepared to revoke.
However, an explicit provision could impair the effectiveness of the power if the circumstances which led to an order changed but it was still appropriate to have an order in place. As regards Amendment No. 44, I do not see any benefit in it. If the order needs to be
continued it should be made again subject to affirmative resolution in Parliament. That is for the protection of Parliament. The Treasury would make it clear in such debates that it was replacing an order that had expired. These are serious powers and they should be subject to parliamentary scrutiny.As regards Amendment No. 45, we are dealing with statutory instruments. They are public documents made freely available as soon as they are laid, including on the HMSO website. As the targets will be primarily abroad, publication in the Gazette would be unlikely to bring the order to their attention. As a matter of practice the Bank of England does publicise these orders among financial institutions.
As regards banks being liable to criminal penalties, paragraph 7(5) of Schedule 3 provides a defence for those who do not know that the person to whom they have made funds available was the person specified in the order.
Viscount Goschen: Before my noble friend responds to the Minister's comments, can the Minister explain what he understands to be the use of Clause 7 as it stands in the Bill? It states that the Treasury must keep an order under review. What does that mean? It is not specified unless that appears somewhere else in the Bill and I do not know about it. Exactly what review process has to be gone through? Would it be open to challenge? Just to state that the order must be kept under review reflects the kind of wording that Government Ministers use from time to time about policies on which they have yet to make decisions. The current wording is meaningless on its own.
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