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"AMENDMENT OF PREVENTION OF TERRORISM ACT 2005
(1) After paragraph (p) of section 1(4) of the Prevention of Terrorism Act 2005 (c. 2) (power to make control orders) there shall be inserted
"(q) a prohibition or restriction on his acquisition of specified property or assets (including intellectual property) or his use of rights enjoyed in respect of specified property or assets (including intellectual property);
(r) a requirement on him to dispose of specified property or assets (including intellectual property) whether by sale or otherwise;
(s) a requirement on him to disclose whether he has disposed, or is in the process of disposing, of specified property or assets (including intellectual property) whether by sale or otherwise, and, if so, to whom that disposal was made or is proposed to be made;
(t) a requirement on him to disclose whether he holds specified property or assets (including intellectual property) in trust for, or under any other fiduciary obligation to, any person or institution and, if so, what the terms of that trust or fiduciary obligation are and the identity of any beneficiary or principal."
(2) After subsection (8) of section 1 of that Act there shall be inserted
"(9) The references to property or assets in subsection (3)(q), (r) and (s) include references to property held by the individual as a trustee or under any other fiduciary obligation.""
The noble Baroness said: I emphasise that this is a probing amendment that seeks reassurance on issues that I raised at Second Reading, when, I fear, my speech must have sounded rather like an excerpt from The spy who came in from the cold, especially for noble Lords who were not present at the time of the incident that triggered my concern.
Since Second Reading, the Minister has discussed this issue with me and written to me, for which I thank her. However, my concerns remain and are shared by many people. It would therefore be very helpful if the Minister could provide assurances that this Bill or previous legislation prevent the financial penetration of institutions of key strategic, military, technological or commercial significance by persons who could use their positions for purposes associated with terrorism.
The example that I described at Second Reading raises specific questions concerning the ownership of significant numbers of shares in firms responsible for security surveillance systems here in Parliament and at other key strategic institutions, such as Ministry of Defence buildings, commercial organisations such as Texaco and British Airways, symbolic locations such as Canary Wharf, and sites of maximum security risk such as the nuclear installations at Dounreay and Sellafield. I am not asking the Minister to comment on specific cases now, but there is widespread concern about the broader issue of the vulnerability of such institutions through the financial control or undue influence through ownership of a significant
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proportion of shares by people with terrorist intent or connections.
Such influence could include, for example, the appointment of staff. It would need only one or two people, with access to all the internal features of an organisation or regular movements of key personnel and so on, who could, when the time was ripe, initiate a terrorist act and wreak death and destruction from inside a building. In that case, elaborate fortifications and the dedicated police force which protects the exterior of such buildings would be irrelevant.
I am not paranoid. The amendment seeks to prevent a potentially realistic and catastrophic scenario. Can the Minister say whether there is internal security vetting for all employees here in Parliament and other institutions of key significance, or whether the responsibility for such vetting lies with the employer or contractor? If the latter is the case and the firm employing staff were to have any direct or indirect interest in terrorism, is that not an issue that needs to be addressed?
and seeks to restrain it. I shall refer to people who are engaged in such conduct as falling within the Clause 5 principle. The amendment seeks to probe the scope of current provision in this area and to pursue the Clause 5 principle of restraining preparation for terrorist acts. More specifically, perhaps I may ask the Minister the following questions.
First, is there adequate provision in present legislation or in the Bill as it now stands to cover the acquisition of property, in particular share interests in companies and intellectual property, by people who are engaging in preparation for giving effect to terrorist intentions, which is the principle of Clause 5? Secondly, is there adequate provision for restricting the use of rights to, for example, vote at AGMs, or employ staff, that arise from possession of such property, for people falling within the principle of Clause 5? Thirdly, is there adequate provision for ensuring that people within the principle of Clause 5 can be properly and fairly compelled to divest themselves of certain kinds of property? Fourthly, are there adequate mechanisms for tracing the disposal of property by people falling within the Clause 5 principle? Fifthly, are there adequate mechanisms for ensuring that people falling within the Clause 5 principle do not use trust or other assets held in a fiduciary way improperly? In this connection, are there current legal provisions to prevent the use or abuse of charitable money for purposes associated with terrorism, or do the provisions of the Bill already cover this contingency?
It is with these questions in mind that we bring these amendments forward. I emphasise that, given the
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Clause 5 principle, they lie properly within the ambit of the Bill. In detail, they propose amendments to Section 1 of the Prevention of Terrorism Act 2005. They are to be inserted after Clause 34 of the Bill, because they are miscellaneous provisions, falling within the main purpose of the Bill. Subsection (1) of new Clause 35 makes it clear that the power to make control orders, under the Prevention of Terrorism Act 2005, definitely extends to the kind of questions I have just raised.
Therefore, I shall briefly and specifically describe the amendments in detail. Paragraph (q) deals with stopping someone with terrorist intentions or connections obtaining ownership or control of certain kinds of property, or using that ownership in undesirable ways. An example would be ownership of a software company whose work has defence implications. Paragraph (r) deals with requiring someone with terrorist intentions or connections to cease owning certain property; for example, where a biotechnology firm holds stocks of potentially dangerous organisms or biological material. Paragraph (s) allows investigation of how someone within the Clause 5 principle may have disposed of certain property and on what terms. For instance, where sensitive intellectual property rights have been sold or passed on, it is important to know the identity of the recipients. Paragraph (t) allows investigation of whether someone is really a nominee for another person or group. Clearly this is of pressing interest where exact chains of responsibility may not be those immediately apparent; for example, where there is a secret holding company registered abroad.
Subsection (2) of the new clause ensures that trust assets may be properly protected and not abused for terrorist purposes. We have used wide terms such as "property" and "assets" because we recognise how wide the class of things is that might be perverted for terrorist purposes. We have used both the technical term, "trust", and the broader term, "fiduciary," to cover the different ways in which someone with legal title may be obligated to deal with property at someone else's direction.
I am most grateful for the opportunity to bring these concerns to the Committee of your noble Lordships' House. I sincerely hope that the Minister will be able to assure your Lordships that this Bill, or previous legislation, prevents financial penetration of organisations of key strategic financial, political, technological or military significance by those who have an ultimate objective associated with terrorism. If this is not the case, I hope very much that the noble Baroness, Lady Scotland, will consider introducing amendments on behalf of the Government to close this massive security loophole.
I am aware that, like so many measures which have to be taken to deal with this new kind of terrorism, which endangers innocent people on a massive and unprecedented scale, the balance shifts a little in the direction of prevention, rather than our historic and
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cherished priority principle of response after the act. But as Sir Karl Popper eloquently explained in The Open Society and its Enemies:
"Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them".
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