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Baroness Noakes moved Amendment No. 264A:
- Page 194, line 36, at end insert ", or is a matter relating to that knowledge or suspicion"
The noble Baroness said: I rise to speak to Amendment No. 264A which stands in my name and that of my noble friend Lord Freeman. The issue it addresses is the protection of disclosures of information which are related to the knowledge or suspicion of money laundering but are not disclosures of the information on which the knowledge or suspicion is based.
I understand that NCIS routinely seeks information which may be useful to it but which is not strictly related to the information which caused the person to make a disclosure. For example—and I am afraid that I must again give examples of accountants—an accountant may have knowledge or suspicion that a property transaction was a money laundering transaction. When he goes to report that, NCIS asks for some other details—for instance, unrelated businesses and mobile telephone numbers—for its own purposes in order to try to build up a picture of the client.
That extra information is not that on which the accountant's knowledge or suspicion of money laundering is based. Therefore, if he provides it, Clause 333 as it stands will not protect him. Without an amendment to the clause, the accountant will be open to an action for breach of confidentiality.
I understand that the matter has been discussed between officials of the Home Office and officials from the Institute of Chartered Accountants. The view of the Home Office is that amendment is not necessary because the requirements of confidentiality are overridden by a commonlaw principle of disclosure being properly made in the public interest. If that is the case, it is difficult to see why Clause 333 is needed at all.
Leaving that on one side, the Institute of Chartered Accountants has real concerns that the public interest defence is not robust and on that basis the institute could not advise its members to breach client confidentiality obligations and make the additional disclosures which are not clearly covered by Clause 333. I hope that the Minister will agree that it is in the public interest that a wide approach to protected disclosures is contained in the Bill. I beg to move.
Lord Freeman: I support the amendment. The Minister is clearly in a cleft stick. On the one hand, his brief will probably state that the amendment is unnecessary and that he should resist it. On the other, he made an appeal earlier for professional people—he singled out accountants—to co-operate more with NCIS and provide more information. The amendment provides a mechanism to do so with proper protection.
The Minister may try to argue that the amendment is unnecessary, leaving open a small scintilla of doubt in the minds of professional people as to whether they will be sued in the courts as opposed to having statutory protection, but I do not believe that he will have an argument.
Lord Rooker: For the most excellent reasons of brevity, I propose to take away the amendment and give it further consideration in order to see whether we can find a satisfactory solution to the points raised.
Baroness Noakes: I am grateful to the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 265 not moved.]
Clause 334 [Authorised disclosures]:
Lord Rooker moved Amendment No. 265A:
- Page 195, line 6, after second "property" insert—
On Question, amendment agreed to.
[Amendment No. 265B not moved.]
Lord Rooker moved Amendment No. 265C:
On Question, amendment agreed to.
[Amendments Nos. 265CA and 265D not moved.]
Lord Rooker moved Amendment No. 265E:
On Question, amendment agreed to.
Clause 334, as amended, agreed to.
Lord Rooker moved Amendment No. 265F:
On Question, amendment agreed to.
[Amendments Nos. 265G to 265J not moved.]
Clause 341 [Requirements for making of production order]:
Lord Thomas of Gresford moved Amendment No. 265JA:
The noble Lord said: Amendments Nos. 265JA, 267A and 268AA introduce the concept that there are reasonable grounds for believing that the making of a production order is in the public interest. We believe that there should be a basis on which the application for the order is made and that the application is capable of being tested. I beg to move.
Lord Rooker: I recognise that the amendments seek to insert a provision that exists in current legislation. They replicate Section 55(4)(c) of the Drug Trafficking Act 1994 which deals with production orders.
If the amendments were accepted, it would be made explicit on the face of the Bill that, in considering applications for a production order, a disclosure order and an account monitoring order, the judge would have to be satisfied that such orders are in the public interest. I understand that much discussion took place on this and, indeed, that a Division was called during the proceedings in Committee in the other place.
In resisting the amendment, the Government's position is that this is not a dilution of safeguards. As explained in the Explanatory Notes accompanying the Bill, the Human Rights Act 1998 requires a judge not
We think that it would be unnecessary, therefore, to retain the present "public interest" test contained in the Criminal Justice Act 1998 (as amended), the Drug Trafficking Act 1994 and the Proceeds of Crime (Northern Ireland) Order 1996 as one of the requirements for making a production order, or to include it as a requirement for an application for a disclosure order and an account monitoring order.
This omission of the "public interest" test raised some concerns in the other place. Certain doubts were raised that the Human Rights Act provided the same safeguard or, if it did, that it justified the removal of an express safeguard relating to the investigation power provisions. In response to that argument, it is worth making two points.
First, Section 6 of the Human Rights Act would require a court to comply with all the safeguards provided by the European Convention on Human Rights when deciding whether or not to make an order or a warrant. We are satisfied that the application of the Human Rights Act removes the need for the public interest test. Article 8(2) provides that there shall be no interference by a public authority in respect of the right to private and family life, home and correspondence, except where necessary for the prevention of disorder or crime. Although the public interest test is not worded in these precise terms, we cannot think of any situation where the public interest test would prevent an order or warrant being made, but Article 8 would not.
The equivalent customer information order and accounting monitoring order provisions in the Terrorism Act 2000 and the Anti-terrorism, Crime and Security Act 2001, do not contain the public interest test. In those cases, the judge would have to consider the application against his obligation to consider a person's rights under the European convention. We believe that this is a parallel to the position under the Bill. Similarly, no such test is expressly stated in the investigation provisions of the Financial Services and Markets Act 2000.
Having made those remarks, I invite the noble Lord to withdraw his amendment.
Lord Thomas of Gresford: The weakness in the argument put forward by the Minister—that we can rely on the European Convention on Human Rights to supply the public interest test—is this: these are applications that, in effect, are made ex parte for a production order. There is no one on the other side. Although it sets out a checklist for the judge to go through while he considers whether a production order would be appropriate, it is asking a little of him also to have regard to the European convention and to
In those circumstances, the European convention does not match up to a provision asking the judge to think about the public interest. As the noble Lord has made clear, it appears in other legislation and there is no valid reason why it should not be included here.
"(aa) it is made in the form and manner (if any) prescribed for the purposes of this subsection by order under section (Form and manner of disclosures)."
Page 195, line 10, leave out from "act" to end of line 12.
Page 195, leave out lines 28 and 29.
After Clause 334, insert the following new clause—
"FORM AND MANNER OF DISCLOSURES
The Secretary of State may by order prescribe the form and manner in which a disclosure under section 330, (Failure to disclose: nominated officers in the regulated sector), (Failure to disclose: other nominated officers) or 334 must be made."
Page 200, line 3, at end insert—
"( ) There must be reasonable grounds for believing that the making of a production order is in the public interest having regard to—
(a) the benefit likely to accrue to the investigation if the material is obtained;
(b) the circumstances under which the person in possession of the material holds it."
5.30 p.m.
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