Sanctions and Anti-Money Laundering Bill [HL] Contents

Chapter 3: Oversight

Court reviews

22.Clauses 32–34 deal with ‘court reviews’ of decisions taken under the Bill or under regulations made under the Bill. A distinction is drawn between two categories of decisions:

(1)Most decisions are subject to a statutory judicial review procedure that is similar, but not identical, to the normal judicial review procedure.12 The statutory procedure is intended to be exclusive: decisions that are subject to the statutory procedure “may not be questioned by way of proceedings for [normal] judicial review.”13

(2)Some decisions are not subject to the statutory procedure,14 but nor may they “be questioned by way of proceedings for [normal] judicial review.”15 Such decisions are thus, at least on the face of it, excluded from any form of judicial review.

23.The first category, which contains most decisions taken under the Bill or under regulations made under the Bill, attracts the statutory review procedure set out in clauses 32–33. This is similar to normal judicial review: clause 32(4) provides, “In determining whether the decision should be set aside, the court must apply the principles applicable on an application for judicial review.”16 However, there are a number of important caveats:

24.The second category of decisions appears to be invulnerable to any judicial review, whether in its statutory or regular form. This category consists of decisions to make or vary designation orders and equivalent decisions concerning the specification of ships.

25.On the face of it, the attempt to oust judicial review of such decisions raises fundamental constitutional concerns. However, the position is ameliorated by the facts that the ouster bites only on decisions in relation to which the individual has the right to request a ministerial review, and that ministerial decisions made on review (as distinct from original ministerial decisions) can be challenged via statutory judicial review. The effect, therefore, is to shield the original decision from judicial review and to require the individual to seek ministerial review as a first step to challenging the designation. If the designation remains following ministerial review, then statutory judicial review becomes possible.

26.While this makes the ouster of judicial review less objectionable, the Bill gives no timeframe for the determination of ministerial reviews. For example, clause 19 provides only that “On a request under this section the minister must decide whether to vary or revoke the designation or to take no action with respect to it.”20 While clause 27 confers wide discretion on ministers to make regulations setting out the procedure to be followed in reviews under provisions such as clause 19, it does not stipulate what sort of procedure should be followed. This means that there is no limit to the delay that could occur between a designation being made and a court hearing to challenge that designation. The Bill should impose an obligation on the minister to conclude the review as soon as reasonably practicable.

Remedies and procedural fairness

27.The Bill changes the remedies available to persons listed in the UK in order to implement a UN sanctions designation. At present, under EU law a UN sanctions listing requires procedural safeguards, including supporting evidence and effective judicial review, and orders can be quashed by the European Court of Justice if they are not proportionate. Under the Bill, the individual would have only a right to request the secretary of state to use their best endeavours to take the matter up at the UN to remove the person’s name.21 There is no provision for listings to be challenged; only a right to seek a court review of the minister’s decision not to use best endeavours.22 We recommend that the current safeguards for persons subject to a UN listing be maintained in the Bill, with a right of appeal to the courts.

28.The Bill allows for sanctions to be imposed on an individual without them being informed beforehand. This is understandable, as otherwise the individual may, for example, hide or dispose of relevant assets. However, the Bill does not provide any right for the individual to be told that sanctions have been applied against them or on what grounds. This undermines procedural fairness and denies the individual a fair opportunity to challenge the listing. The Bill requires disclosure only if a case comes to court.23 The subjects of a designation order are prohibited from taking the matter to court until after they have sought a review by the minister and received a decision on that review. An individual cannot make effective representations on such a review unless they are told the case against them.

29.It is essential that the individual is informed of the reasons for the designation, and the evidence which is said to justify it, as soon as reasonably practicable after the designation has been made. Such requirements should be set out in the Bill. We recognise that in some cases sensitive security details will need to be withheld, but the individual ought to be told the essence of the case against him or her. This reflects principles that are well-established at common law. If individuals are not given adequate notice of the case against them, the individual’s meaningful participation in the review process is jeopardised.

Review provisions

30.The Bill makes provision for the periodic review of certain sanctions designations.24 These require the minister to consider any designation of a person every three years. Under the current EU system designations are reviewed every 6–12 months.

31.Lord Ahmad of Wimbledon set out at second reading the opportunities for reviewing sanctions designations:

“First, the designated person can request a review and have the decision looked at again; secondly, they can challenge in court; thirdly, if new evidence arises or there is a new matter that has not been considered, they can request a further review; fourthly, the appropriate minister can instigate a review on their own initiative in response to changing events; and fifthly, the appropriate minister can bring the deadline forward and complete the review before the end of the three-year period. Given all this, and that the matter of designation is clearly a live matter throughout the period, we do not consider the period to be excessive.”25

32.We are not convinced that a three-year review period is acceptable, given the significant impact that such sanctions may have on the individual. We are concerned that clause 19(2) precludes an individual from making a second or subsequent request for ministerial review “unless the grounds on which the further request is made are or include that there is a significant matter which has not previously been considered by the minister.” In some cases the passage of time itself may warrant reconsidering an individual’s designation. We invite the House to consider whether the Bill makes adequate provision for reviewing designations.

13 Ibid., clause 33(5)

14 Ibid., clause 32(1)(d)

15 Ibid., clause 33(5)

16 Ibid., clause 32(4)

17 Ibid., clause 32(3)

18 Ibid., clause 33

19 Ibid., clause 34

20 Ibid., clause 19(3)

21 Ibid., clause 21(2)–(4)

22 Ibid., clause 32(1)(c)

23 Ibid., clause 34(1)

24 Ibid., clause 20

25 HL Deb, 1 November 2017, col 1423

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