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Lord Filkin: My Lords, the two amendments are linked. They probe the level of discretion that the Secretary of State has to accede to customer information requests on the grounds on which he must base his decision. Amendment No. 45 seeks to refer back in general terms to the conditions in article 1(4) of the protocol, and we have concerns about both amendments.
In relation to Amendment No. 42, we consider that the drafting as it stands is correct. It will or will not appear to the Secretary of State that the person is subject to an investigation into serious criminal conduct, on the basis of the information in the request in front of him. The amendment might imply a higher
Meeting the requirement is only the initial part of the process, however. It is a precondition. If it cannot be met, the clause does not apply at all. Subsection (1) works as an enabling provision as the starting point in considering a request for customer information. In addition to it, the Secretary of State has a general discretion as to whether to act in any particular case. The use of the word "may" in subsection (3) reinforces that point, as we referred to in our discussions in Grand Committee.
Furthermore, a judge must also be satisfied of all the matters set out in Clause 33(1) before exercising his or her discretion to make an order. The requirements are: first, that the person specified in the application is subject to an investigation; secondly, that the investigation concerns serious criminal conduct, and that it would constitute an offence in this country; and thirdly, that the order is sought for the purposes of the investigation.
Amendment No. 45 is designed to cover the matters listed in Article 1(4) of the protocol. Its effect would be to list the requirements in the Bill. Let me explain why we are not happy with that approach. The Secretary of State's discretion on receipt of a request from an EU country will be exercised with the protocol requirements in mind. Our obligation to respond to requests for banking information extends only to those from participating countries that are made on the basis of the protocol. Requests must therefore comply with all of Article 1 of the protocol in order to be valid.
We consider that the general discretion conferred on the Secretary of State in subsection (3) is preferable to a clause that explicitly states how the Secretary of State must act when a request is received in a particular form. It enables us to apply the article 1 conditions and to exercise a general discretion, which we think is right.
Requirement for a full explanation of reasons could be interpretedit might well beas going way beyond what we are entitled to demand from the requesting authority under Article 1(4). It might be considered a breach of our obligations under the protocol. Article 1(4) lists certain points, but makes no requirement for a full or total explanation. It states why it is considered that the request for information is likely to be of substantial value for the purpose of the investigation into the offencethat is very clearand on what grounds it is presumed that banks in the requested member state hold the account and, to the extent available, which banks may be involved.
I do not consider that explicitly listing Article 1(4) conditions is appropriate either. It is quite clear that the Secretary of State is operating within that ambit. I am happy to stress that the Secretary of State's discretion will be exercised with the protocol requirements in mind. In addition, one of the requirements in Article 1(4) is that the request include any information available that may facilitate the execution of the request. The Secretary of State could not tell at consideration stage whether that had been complied withwhether the additional information did facilitate execution of the requestso inclusion in the Bill would be wrong. He would not be able to tell if it had been complied with until the particular circumstances were confronted on a particular application.
Although I respect the reasons for the amendments, which we trust are probing amendments, we think that the position is clear in terms of how the protocol will be applied. I hope that my rather full explanation has set the noble Viscount's mind at rest on the matter.
The noble Lord said: My Lords, the purpose of the amendment and the others in the group, to which I will speak, is to allow applications for customer information orders and current monitoring orders under Chapter 4 of Part 1 of the Bill to be made by or to authorities in any country, and not only a participating country. As defined, the participating countries are quite limited. In effect, they mean the EU member states and others designated by the Home Secretary. I assume that the designation will be limited to states such as Norway and Iceland that are part of the EEA, and may be extended wider.
The amendment is not one that I intend to press. It arises in particular out of concern about the handling in the United Kingdom of claims by the Nigerian government to matters of some hundreds of millions of pounds that are believed to have been looted by the Abacha familythe family of the late president of Nigeriafrom the treasury of that country. In many cases, that money has been deposited in banks in the United Kingdom. Lawyers acting for the present Nigerian government have complained of a lack of help from the authorities in the United Kingdom, especially in comparison with authorities in Switzerland.
A number of complaints are outside the scope of the Bill, but it is clearly desirable that third-world countries should be helped to recover assets stolen by corrupt rulers, a problem that is unfortunately all too common. We need to consider whether the Bill does everything that it can to assist such countries.
I can understand why the United Kingdom might be reluctant to grant mutual recognition, as opposed to mutual legal assistance, to some foreign countries where the courts may be regarded as less than entirely reliable. I will therefore not press for anything in the nature of mutual recognition to be extended. With Nigeria, we have an agreement for mutual legal assistance, entered into in 1989. In itself, that does not seem to have prevented the very substantial difficulties that have arisen.
I also recognise that some help may result from the implementation of Part 7 of the Proceeds of Crime Act, which very much stiffens the law on money-laundering and will make it harder for British financial institutions to deal with money that comes to them in circumstances where they suspect a problem. I wonder why the remedies of customer information orders or account monitoring orders under Chapter 4 of Part 1 are not made available to countries other than participating countries. The orders made under Chapter 4 are made in the course of mutual legal assistance and the courts have the discretion about whether to make them or not; they are not there simply for rubber-stamping. It appears that the availability by way of mutual legal assistance to countries outside the EU of customer information orders or account monitoring orders would potentially be very useful in identifying and tracing assets that had been looted from national governments. I beg to move.
Lord Filkin: My Lords, I respect the reasoning behind the amendments. I shall respond to a number of questions raised by the noble Lord, Lord Goodhart, and explain what the term "participating country" means, why only participating countries are involved, how the Proceeds of Crime Act will assist and the relevance of the Abacha case, which was the origin of the matter.
I begin with the definition of "participating countries". A participating country is defined in Clause 51(2) of the Bill as a country other than the UK which is an EU member state on a day appointed for the commencement of that provision, and any other country designated by an order. That mechanism enables different countries to be designated as participating countries for the purposes of different provisions of the Bill.
The purpose is to restrict the application of certain provisions to those countries that are under an equal obligation to provide a particular type of assistance. In other words, the arrangements will be reciprocal. The provisions of Chapter 4, to which the amendments relate, enable us to request and provide assistance in identifying and monitoring bank accounts. Those forms of assistance are regulated for the first time in the protocol to the MLA convention. We are under an obligation only to provide those forms of assistance to countries that are party to that agreement and we have chosen as a matter of policy to restrict the application of Chapter 4 to designated countries rather than giving it general application. That restriction contrasts with our policy more generally on the provision of mutual legal assistance where we do not require the existence of an agreement as a condition for assisting. However,
With regard to changes to the relevance of the Proceeds of Crime Act, Part 11 of the Act will streamline the UK's ability to co-operate with other countries in tracing, freezing and confiscating assets. It also provides for the investigation powers in Part 8 of the Act to be used at the request of foreign jurisdictions. The investigation powers include customer information orders and account monitoring orders, which are the types of assistance that Chapter 4 of the Bill introduces in respect of EU member states. That will be accomplished by subsidiary legislation. We expect to make the relevant Orders in Council later this year. Unlike the existing legislation, an overseas territory will no longer need to be designated before restraint and confiscation co-operation can be given. In the subordinate legislation, we intend to make restraint available from the start of an overseas investigation rather than at the point when a person is charged with an offence. That was one of the main criticisms of the UK legislation that stemmed from the Abacha case. Bringing forward the availability of restraint will help to prevent the dissipation of assets in overseas cases. I am sure many Members of the House recollect that at the time of the Abacha case, UK law did not allow assets to be restrained until the suspects were being charged, and it did not require a genius to predict what had happened to the assets very shortly after that, as was found to be the case.
A second point relevant to the Abacha case is that the Act provides that the international co-operation arrangements are made by order rather than in primary legislation. I hope the House recognises that that is a further benefit. It will allow for easy amendment to keep pace with international initiatives, such as mutual recognition in the EU and enable us to deal effectively with ground-breaking and high-profile cases, such as the Abacha case. It is highly desirable that we do so and seek to prevent a recurrence of such situations. I respect the reasons that lie behind the amendment and hope that my response gives the assurance that we will not be in quite the same position again.
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