Criminal Finances Bill - Committee (1st Day) (Continued)

– in the House of Lords at 8:27 pm on 28th March 2017.

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Amendment 81

Moved by Baroness Hamwee

81: Clause 13, page 43, line 42, at end insert—“(h) money or assets in any form which may be used as currency,”.”

Photo of Baroness Hamwee Baroness Hamwee Liberal Democrat

Amendment 81 extends the debate we had immediately before the break with regard to the assets that may be liable to forfeiture. I understand the extension in Clause 13, which we have discussed, but I wonder why there should be any limits on what falls within the forfeiture provisions, because life changes. Items that come into common use change. Who had heard of bitcoins 10 years ago? That is the thinking behind my Amendment 81, which would extend cash, and Amendment 84, which would extend listed assets. The Minister in the Public Bill Committee in the Commons said of what is now Clause 14 that the Government did not want to use the power in new Section 303B(2) “indiscriminately”. I am puzzled what that term means. I can see that they would want to be careful about that use, but I do not see the relevance of discrimination.

In her letter of 17 March to noble Lords following Second Reading, the Minister referred to a balanced approach and said that allowing seizure of any type of property would not be proportionate. Again, that term puzzles me. Balance and proportion are relevant to the circumstances in which property can be forfeited—the conditions which have to be met, and so on—but are they relevant to the type of asset? We are in danger of allowing the owner of an asset to apply criminal ingenuity to remain a step ahead, finding new categories of property in which the proceeds of crime can be held. At Second Reading, the Minister said:

“As criminals adapt, so must we”.—[Official Report, 9/3/17; col. 1476.]

We should—but it would be even better if we were to anticipate and be a step ahead, not a step behind, because it is very hard to be in step precisely.

Those are the most significant comments that I want to make on the group of amendments, but I have quite a number of others. I have expressed quite a hard line but, swinging the pendulum back a little, I want to probe the criteria for sizable assets and to ask what the legislation intends by including in three places that there should be “reasonable grounds” for suspecting that property is intended for unlawful use, not simply that it is intended for unlawful use, and also to probe how property intended for unlawful use or use in unlawful conduct is assessed. Is it something less than a firm plan? Does it mean that the intention must be proved, or is it in the eye of the beholder? That is why “reasonable grounds” for suspicion are within my amendments.

Amendment 86 takes us to codes of practice. New Section 303G refers to the Secretary of State proposing,

“to issue a code of practice”, but the code is not optional, so why does the Bill say:

“Where the Secretary of State proposes to issue a code of practice”?

Does where mean when, or—I am not trying to be clever about this—are there other codes of practice that may be applied?

Amendment 87 is about the retention and storage of property while proceedings take their course. The Bill requires property seized to be “safely stored”, but I am looking for an assurance that the conditions of storage will be appropriate. Artistic works, stamps and I dare say other assets may require a certain temperature or humidity if they are not to deteriorate. So my probe is as to whether safe storage just means that they go into a cardboard box on a shelf or whether it means something more sophisticated than that.

Amendment 102 probes why it is necessary for someone who applies to have property released to him to demonstrate that he was deprived of it by unlawful conduct. What if it was the subject of a loan, or if there was an error?

Amendment 103 is about compensation, which under the Bill will be payable only if the circumstances are exceptional. Can the Minister explain why—and is that fair? It must mean that generally, when property is seized but has to be returned, there is no compensation for loss. I stress that compensation would be payable, leaving aside the exceptional circumstances, only for loss—it is not compensation, period. So why is it only in exceptional circumstances?

The Secretary of State can amend the regulations about the source of compensation. Amendment 104 would provide that the Secretary of State cannot amend the actual payment. I think that that is what the clause means, but I would be glad of assurance. Amendment 105 goes back to a point I raised on an earlier provision: exclusion from freezing for living expenses should, in my view, extend to the living expenses of dependants. I beg to move.

Photo of Lord Stevens of Kirkwhelpington Lord Stevens of Kirkwhelpington Crossbench 8:30 pm, 28th March 2017

My Lords, I support Amendments 81, 82 and 83. I pay tribute to the Minister and her team, who have listened to the officers who are actually on the front line as well as to others. In general terms—and I know these are probing amendments—if there are direct links between money assets and anything that may be used as currency, can consideration be given to those links being widened? Pursuing that would be of great help to the agencies which are enforcing these laws. I stress my tribute to the Minister and her team for listening to those who have to enforce these laws.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs)

My Lords, the amendment proposed by the noble Baroness, Lady Hamwee, has merit and widens the Bill so that assets which can be used as currency can be included for the purposes of the forfeiture of cash. In some parts of the world, mobile phone credits are traded as cash and it would not be impossible to see situations where large quantities of these credits could be traded, hold the proceeds of crime and be used as currency. There will be other items that will be used in similar circumstances in the future.

However, I am not persuaded by Amendment 84 in the name of the noble Baroness, Lady Hamwee. I understand the arguments about what is included in this broad definition but believe that what is shown in the Bill as “listed assets” is better. However, I would want the regulations which may amend subsection (1) to use the affirmative procedure because it is important that we have a discussion about it at that time.

Amendments 85, 89, and 106 add the words “reasonable grounds for suspecting”. Those are proportionate clarifications which the Minister should adopt. I am not convinced that Amendment 87 is necessary. I see the point which the noble Baroness, Lady Hamwee, is seeking to address but hope that the Government will confirm that the words “safely stored” will cover this point and that valuable goods will be stored appropriately.

I am not persuaded of the merits of Amendment 102, although I do support Amendments 103 and 104 in the name of the noble Baroness. If the court is satisfied that the person has suffered a loss then they should be compensated for that loss and it is important that regulations made under this section are not used to restrict the payment of compensation. Amendment 105 is also a sensible addition, unless the Minister says very clearly today that a person’s reasonable living expenses include them providing for their dependants. Amendment 106, bringing in the term “reasonable grounds”, in respect of forfeiture is also a welcome provision.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Minister of State, Home Department

I thank noble Lords for their contributions, and particularly the noble Lord, Lord Stevens, for his kind words. The noble Baroness, Lady Hamwee, has—as always—scrutinised the provisions in some detail and I am grateful to her for the points she raised. Her Amendments 81 and 84 seek to broaden the scope of the seizure and forfeiture powers at Clauses 13 and 14 so that they can essentially be used to seize any items deemed to be the proceeds of crime. However, these will create a number of issues. The test that the property “may be used as currency” is legally ambiguous and untested, and it could complicate the use of these powers. The effect of Amendment 81 would also be to include a wide range of property in the cash forfeiture procedure which is not easily severable, as would be required for these provisions.

The noble Baroness referred to Bitcoin at the beginning of her speech. There are difficulties in defining what we would seize. While we would not include this in the Bill, we are continuing to work with law enforcement agencies to determine how we should approach this issue more generally, and specifically to determine whether there is a gap in law enforcement capability that requires legislative change.

In respect of the noble Baroness’s Amendment 84, I am sure she would agree that we must take a proportionate approach to ensure that there is clarity regarding what can and cannot be seized. The items listed in the Bill are there based on clear justification that they may be used to move or hide the proceeds of crime, and we drew on the advice of law enforcement practitioners in developing this list. Her amendments would move away from the principle of clarity, eroding the careful circumscription that the Bill provides for these provisions. We can add to the list when the need arises, subject to parliamentary approval. As we have demonstrated through our amendments during the Bill’s passage, we will do so where a clear case arises. This gives us and the police the flexibility and balance we need while ensuring that this is not a sweeping seizure power. I am very grateful to the noble Baroness for allowing me to emphasise how seriously the Government take these issues, particularly the need for stringent safeguards on the use of such powers. I trust that she will feel inclined not to press these amendments.

I turn to the other amendments tabled by the noble Baroness. Amendment 85 seeks to insert the principle of “reasonable grounds for suspicion” into the definition of a listed asset. However, this appears to insert this test in the wrong place in the Bill. We consider that the inclusion of the “reasonable grounds to suspect” test in the sections relating to the operation of the seizure powers is more appropriate, and this approach mirrors the existing provisions for the recovery of cash.

Amendment 86 seeks to require the Secretary of State to take the actions relating to the issuing of the code of practice for searches for listed items before it is issued. The provision in the Bill is consistent with existing wording in the Proceeds of Crime Act relating to codes of conduct. I assure the noble Baroness that all the relevant actions will be taken before a code is issued.

Amendment 87 seeks to require that items seized under these provisions should be stored in appropriate conditions. The agency seizing such property is liable for its storage, and would be liable for damage to such property if due care were not taken. Therefore, we believe that the agency responsible would take such action in any case.

Amendment 102 seeks to remove the provision allowing the release of the listed item if the victim was deprived of it through unlawful conduct. The provision is one of three principles that the court must consider when the victim applies to the court for the item to be returned. The removal of this provision would remove the requirement on the victim to show that they had lost the property through unlawful means. This is an important test that the court must satisfy itself on, and which already applies to the well-established system for the forfeiture of cash, and we believe that it should be retained.

Amendment 104 seeks to prevent the Secretary of State restricting the payment of compensation through regulation. The intention behind the power in the Bill is to ensure that the appropriate agency can be held responsible for any compensation that may be paid. It allows the Secretary of State to add to the list of those who are liable for paying compensation where appropriate. The provision already exists for cash forfeiture, and I see no reason not to replicate it here. It should be noted that the circumstances in which compensation would be payable are set out elsewhere in new Section 303W, and that the Secretary of State’s power does not extend to amending these provisions.

The noble Baroness asked why exceptional circumstances are required. This is modelled on the cash provisions. The seizure power applies to a limited number of assets. It is not anticipated that, in normal circumstances, seizure would result in loss being sustained. The items are not likely to change in value during the timeframe for seizure.

I turn to provisions relating to Clause 15. Amendment 105 seeks to extend the exclusions to an account-freezing order to include the living expenses of a person’s dependants. The provision for exclusions relates to the actions on the account and the owner’s ability to use the contents of the account to meet reasonable living expenses. I fully appreciate that there may be dependants of the account owner who would be adversely affected if no provision were made for the account to be used to meet their living expenses. That is why we have included this provision. The living expenses will be determined by a court and, if there are dependants, the court will take them into consideration.

Amendment 106 would include a provision that, where forfeiture is sought on the grounds that it will be used for unlawful conduct, the officer must have reasonable grounds for suspicion that this is the case. The existing provisions already require the officer to be satisfied that the property may be recoverable or may be used for unlawful conduct, and we do not want to lower that threshold.

I thank noble Lords for their patience. I hope that I have addressed the issues that the noble Baroness raised and that she will be happy to withdraw her amendment.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs) 8:45 pm, 28th March 2017

When I spoke about listed assets, on page 44 of the Bill, I said I preferred what was in the Bill to the amendment of the noble Baroness, Lady Hamwee. I mentioned regulations being made by the affirmative procedure. Of course, it does not say that here, so I am assuming that they are not—that they will be made by the negative procedure or in some other way. Perhaps the Minister could write to me on this.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Minister of State, Home Department

I am looking for a yes or a no, but I do not think that I will get it, so I will write to the noble Lord.

Photo of Baroness Hamwee Baroness Hamwee Liberal Democrat

My Lords, I am grateful to the noble Lords, Lord Stevens and Lord Kennedy. Mobile phone credits for cash? I have led a very sheltered life.

The Minister said that the problem was in the phrase “may be used as currency”. But it seems to me that one can know that only through experience. That is why betting receipts, gaming vouchers and so on have now been included. I am really not sure that I follow the argument, although I will think about it after this evening.

I mentioned Bitcoins not because I was suggesting that they should be included but simply as an example of how some time ago we did not know what was coming.

One’s living expenses include the expenses of dependants—I think that is what the Minister said. She is nodding. It is not quite within the normal meaning of the words, but I will accept that, and I am glad that it has been confirmed.

I do not think that I adequately followed the argument about the term “exceptional circumstances”. The Minister said quite a lot about the rest of the clause and of course I shall look at that after this evening. For now, I beg leave to withdraw the amendment.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Minister of State, Home Department

Perhaps I may intervene to say that the regulations will be affirmative.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs)

I thank the Minister very much, but it does not say that in the Bill—it just refers to the regulations—and I think it needs to say that.

Amendment 81 withdrawn.

Amendments 82 and 83

Moved by Baroness Williams of Trafford

82: Clause 13, page 43, line 46, leave out from “machine” to second “that” in line 1 on page 44

83: Clause 13, page 44, line 4, at end insert—“( ) “betting receipt” means a receipt in physical form that represents a right to be paid an amount in respect of a bet placed with a person holding a betting licence.( ) In subsection (7A)—“bet”—(a) in relation to England and Wales and Scotland, has the same meaning as in section 9(1) of the Gambling Act 2005;(b) in relation to Northern Ireland, has the same meaning as in the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (S.I. 1985/1204 (N.I. 11)) (see Article 2 of that Order);“betting licence”—(a) in relation to England and Wales and Scotland, means a general betting operating licence issued under Part 5 of the Gambling Act 2005;(b) in relation to Northern Ireland, means a bookmaker’s licence as defined in Article 2 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985;“gaming machine”—(a) in relation to England and Wales and Scotland, has the same meaning as in the Gambling Act 2005 (see section 235 of that Act);(b) in relation to Northern Ireland, has the same meaning as in the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (see Article 2 of that Order).( ) In the application of subsection (7A) to Northern Ireland references to a right to be paid an amount are to be read as references to the right that would exist but for Article 170 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (gaming and wagering contracts void).””

Amendments 82 and 83 agreed.

Clause 13, as amended, agreed.

Clause 14: Forfeiture of certain personal (or moveable) property

Amendments 84 to 87 not moved.

Amendment 88

Moved by Baroness Williams of Trafford

88: Clause 14, page 54, line 12, at end insert—“(3A) An order under subsection (3) made by a magistrates’ court may provide for payment under section 303U of reasonable legal expenses that a person has reasonably incurred, or may reasonably incur, in respect of— (a) the proceedings in which the order is made, or(b) any related proceedings under this Chapter.(3B) A sum in respect of a relevant item of expenditure is not payable under section 303U in pursuance of provision under subsection (3A) unless—(a) the person who applied for the order under subsection (3) agrees to its payment, or(b) the court has assessed the amount allowed in respect of that item and the sum is paid in respect of the assessed amount.(3C) For the purposes of subsection (3B)—(a) a “relevant item of expenditure” is an item of expenditure to which regulations under section 286B would apply if the order under subsection (3) had instead been a recovery order;(b) an amount is “allowed” in respect of a relevant item of expenditure if it would have been allowed by those regulations;(c) if the person who applied for the order under subsection (3) was a constable, an SFO officer or an accredited financial investigator, that person may not agree to the payment of a sum unless the person is a senior officer or is authorised to do so by a senior officer.(3D) “Senior officer” has the same meaning in subsection (3C)(c) as it has in section 303E.”

Amendment 88 agreed.

Amendment 89 not moved.

Amendments 90 to 101

Moved by Baroness Williams of Trafford

90: Clause 14, page 55, line 43, at end insert—“(5A) An order under subsection (1) made by a magistrates’ court may provide for payment under subsection (9) of reasonable legal expenses that a person has reasonably incurred, or may reasonably incur, in respect of—(a) the proceedings in which the order is made, or(b) any related proceedings under this Chapter.(5B) A sum in respect of a relevant item of expenditure is not payable under subsection (9) in pursuance of provision under subsection (5A) unless—(a) the person who applied for the order under subsection (1) agrees to its payment, or(b) the court has assessed the amount allowed in respect of that item and the sum is paid in respect of the assessed amount.(5C) For the purposes of subsection (5B)—(a) a “relevant item of expenditure” is an item of expenditure to which regulations under section 286B would apply if the order under subsection (1) had instead been a recovery order;(b) an amount is “allowed” in respect of a relevant item of expenditure if it would have been allowed by those regulations.”

91: Clause 14, page 56, line 9, leave out from “of” to end of line 11 and insert “any provision of this section only if the person is a senior officer or is authorised to do so by a senior officer.“Senior officer” has the same meaning in this subsection as it has in section 303E.”

92: Clause 14, page 56, line 13, at end insert—“(za) first, it must be applied in making any payment of legal expenses which, after giving effect to subsection (5B), are payable under this subsection in pursuance of provision under subsection (5A);”

93: Clause 14, page 56, line 14, leave out “first” and insert “second”

94: Clause 14, page 56, line 18, leave out “second” and insert “third”

95: Clause 14, page 56, line 43, at end insert—“(3A) An order under subsection (3) made by the High Court may include provision of the type that may be included in an order under section 303O(3) made by a magistrates’ court by virtue of section 303(3A).(3B) If provision is included in an order of the High Court by virtue of subsection (3A) of this section, section 303O(3B) and (3C) apply with the necessary modifications.”

96: Clause 14, page 58, line 7, at end insert—“(1A) Where an order under section 303Q is made by a magistrates’ court, any party to the proceedings for the order (including any party to the proceedings under section 303O that preceded the making of the order) may appeal against a decision to include, or not to include, provision in the order under subsection (5A) of section 303Q.”

97: Clause 14, page 58, line 8, leave out “subsection (1)” and insert “this section”

98: Clause 14, page 58, line 12, leave out “subsection (1)” and insert “this section”

99: Clause 14, page 58, line 33, at end insert—“(aa) second, they must be applied in making any payment of legal expenses which, after giving effect to section 303O(3B)(including as applied by section 303R(3B)), are payable under this subsection in pursuance of provision under section 303O(3A) or, as the case may be, 303R(3A);”

100: Clause 14, page 58, line 34, leave out “second” and insert “third”

101: Clause 14, page 58, line 38, leave out “third” and insert “fourth”

Amendments 90 to 101 agreed.

Amendments 102 to 104 not moved.

Clause 14, as amended, agreed.

Clause 15: Forfeiture of money held in bank and building society accounts

Amendments 105 and 106 not moved.

Clauses 15 and 16 agreed.

Schedule 1: Powers of members of staff of Serious Fraud Office

Amendment 107

Moved by Baroness Hamwee

107: Schedule 1, page 120, line 12, at end insert “of such minimum level of seniority as may be designated by the Secretary of State”

Photo of Baroness Hamwee Baroness Hamwee Liberal Democrat

My Lords, we have had groupings which have covered half a dozen big issues; Amendment 107 would amend the definition of SFOs— serious fraud officers—in Schedule 1, where we are told that an SFO officer is,

“a member of staff of the Serious Fraud Office”.

My amendment would add to that,

“of such minimum level of seniority as may be designated by the Secretary of State”.

Realistically, of course, this aims to exclude a very junior member of staff who has perhaps simply administrative duties and so on—I seem to remember the noble and learned Lord, Lord Keen of Elie, saying, “It wouldn’t mean the janitor”. I want to make sure that it does not mean the janitor. The SFO officers are referred to for various purposes, and after all, staff include civilians. I hope that whoever is to reply to this from the Front Bench—it seems that it will be the noble Baroness, Lady Vere—will be able to reassure the Committee as to just what is meant in this context and why there is no obvious limit: or perhaps there is one somewhere else as regards what level of officer we are talking about. I beg to move.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs)

The noble Baroness’s amendment is obviously a probing amendment, and I hope that we will get a response from the Government Front Bench that clarifies the situation.

Photo of Baroness Vere of Norbiton Baroness Vere of Norbiton Baroness in Waiting (HM Household) (Whip)

My Lords, I am grateful to the noble Baroness, Lady Hamwee, for her scrutiny of these provisions. Her Amendment 107 seeks to require the Secretary of State to define the seniority of SFO staff so that not all have access to POCA powers. I appreciate her concern at the extension of the powers conferred by POCA but I hope I can reassure her by explaining our reasons for extending powers to SFO officers.

As the noble Baroness is undoubtedly aware, the SFO is responsible for investigating some of the most serious cases of fraud, bribery and corruption. To effectively combat complex crime, it is vital that SFO officers have access to the most effective legislative tools. Currently, only SFO officers who have accredited financial investigator status have access to POCA powers. This is at variance with other agencies such as the police, the NCA, HMRC and Immigration Enforcement, whose officers have direct access to these powers whether or not they are financial investigators.

It is logical and appropriate that these powers are made available to all SFO officers, both to ensure consistency of approach across agencies and to ensure that non-accredited SFO officers have access to POCA powers when investigating complex crimes, which may include investigating the proceeds of crime.

I hope I can further reassure the noble Baroness that all agencies adopt a process whereby applications made under POCA are considered and approved by an appropriate management chain before they are submitted to court. This ensures that all officers, of whatever grade or rank—even the janitor—are required to consider the necessity and proportionality of any application they make.

I am grateful to the noble Baroness for allowing me to explain the rationale for this position—particularly the need to make powers available to a wide range of officers involved in the investigation of complex, acquisitive crime. I trust that she will feel inclined not to press this amendment and, accordingly, I invite her to withdraw it.

Photo of Baroness Hamwee Baroness Hamwee Liberal Democrat

My Lords, I understand the need to broaden the scope but I cannot help but think that we have been told that there are a lot of organisations that could give responsibilities to their janitors. The point is that decisions on who is given responsibility to do what can be made by senior officers of the day in an inconsistent fashion. In most organisations that would be entirely reasonable but we are talking about very serious powers, so my amendment and my comments are not intended to be frivolous.

Of course, I shall not pursue this matter tonight, and indeed after two or three mentions of thanks for my careful scrutiny and, reading between the lines, thoughts of “I wish the noble Baroness would shut up”, I think that I probably will for tonight. As I said, it is not a frivolous point but I beg leave to withdraw the amendment.

Amendment 107 withdrawn.

Schedule 1 agreed.

Clauses 17 and 18 agreed.

Clause 19: Financial Conduct Authority

Amendment 108 not moved.

Clause 19 agreed.

Clause 20 agreed.

Amendment 109

Moved by Lord Rosser

109: After Clause 20, insert the following new Clause—“Report to Parliament on impact on enforcement authorities (1) The Secretary of State must, within 18 months of the day on which this Act is passed, lay before both Houses of Parliament a report on the implementation of this Act and the impact on enforcement authorities.(2) The report must include an assessment of—(a) what, if any, additional resources are required by enforcement authorities in order to carry out their functions and powers under this Act;(b) what, if any, additional resources have been provided to enforcement authorities to support them in carrying out their functions and powers under this Act;(c) what additional training has been provided by enforcement authorities to staff members in order to allow them to effectively carry out their functions and powers under this Act;(d) to what extent enforcement authorities have used the powers provided under this Act.(3) In this section “enforcement authorities’’ means—(a) the National Crime Agency;(b) Her Majesty’s Revenue and Customs;(c) the Financial Conduct Authority;(d) the Serious Fraud Office; and(e) the Director of Public Prosecutions (in relation to England and Wales) or the Director of Public Prosecutions for Northern Ireland (in relation to Northern Ireland).”

Photo of Lord Rosser Lord Rosser Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Transport)

This amendment requires the Secretary of State, within 18 months of the day on which this Bill is passed, to lay before both Houses of Parliament a report on the implementation of the Act and its impact on enforcement authorities.

At Second Reading, it was pointed out that, if the measures provided for in the Bill are to be made to bite, the necessary resources will need to be provided. New offences and powers are created in the Bill, together with extensions of existing powers, which will require further resources, both financial and staff.

In response at Second Reading, the Government referred to the sums of money that have been invested in law enforcement agencies since 2006 and under the asset recovery incentivisation scheme over the past three years. I am not sure that that response really addressed the potential concern that had been expressed about the future and the implications for resources if the changes in the Bill in respect of new offences, powers and enhanced powers were to be effectively introduced and applied.

One’s concerns were not helped by the response from the Government to the question asked at Second Reading about the few unexplained wealth orders that were predicted—20 per year. The response was to the effect that it was a conservative estimate—presumably in more senses than one—as opposed to being a definitive indication of how often the unexplained wealth orders would be used. Has that been the basis on which other new and enhanced powers in the Bill have been assessed by the Government, and has it been done in this way to try to dampen down calls for additional resources in the quest to save money?

The Government said at Second Reading that they were already engaging with law enforcement authorities and prosecutors to encourage the use of all the new powers being introduced by the Bill. However, they went on to say that ultimately it would be for the enforcement authorities, which are operationally independent, to decide when and how often to use the new powers in the Bill. That may be true but the extent to, and thoroughness with which, enforcement authorities use the new and enhanced powers in the Bill must ultimately be determined by the level of resources they are given to carry out their new and enhanced role and responsibilities. The issue of the resources that are going to be made available to implement the provisions in the Bill, and about which we have heard very little, is a matter for government.

In their impact assessment, the Government said that the 2013 serious and organised crime strategy and the 2015 strategic defence and security review set a clear goal of making the UK a more hostile place for those seeking to move, hide or use the proceeds of crime or corruption. Delivering that will not come cheaply, particularly as the Government have already said that this country is unusually exposed to the risks of international money laundering and will, presumably, want the new powers in the Bill to be fully deployed by the enforcement agencies.

The Government said at Second Reading that they would carefully monitor and review the use of unexplained wealth orders once they are introduced. Is it not the Government’s intention to do that in respect of all the new and enhanced offences and powers in the Bill, not least in relation to the resources available? Is it not the Government’s intention to do it in a way that ensures Parliament is directly involved? That is the purpose of this amendment, which requires a one-off report from the Secretary of State to Parliament on the implementation of the Act covering the issues of additional resources provided and required, based on experience of seeking to implement the provisions of the Act—rather than, as now, on conjecture—the training of staff and the extent to which the enforcement authorities have used the powers provided in the Bill. I beg to move the amendment and await the Government’s response.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative 9:00 pm, 28th March 2017

My Lords, the noble Lord, Lord Rosser, is talking about post-legislative scrutiny arrangements. I quite favour post-legislative scrutiny but think that the amendment has some serious weaknesses. Essentially, it is a list of requests, in the sense that proposed new subsection (2)(a), (b) and (c) asks for additional resources and training. When you tie that in with the list of enforcement authorities overleaf in proposed new subsection (3)(a) to (e), there are some extremely serious and bulky authorities there that could come up with a pretty large list of what they might want. While I entirely support what is said in proposed new subsection (2)(d)—

“to what extent enforcement authorities have used the powers provided”, which is an extremely good point to inquire about—nowhere does the report require any assessment of what has been achieved. It seems to me that the critical aspect of the Bill is what is achieved. I worry that what we have here is a shopping list for more resources but without any need to justify the money that has been spent or to what extent it has proved effective in various ways; for example, by inhibiting crime or by seizing drugs or other forms of assets.

Finally, 18 months would be a very short time in which to make this sort of assessment. By the time this begins to build as an organisation, it will be longer than that. We are in danger of taking a snapshot in which we get only half the picture—that is the asking half and not the delivery half—and of looking at it before it is fully fledged and developed. I hope that my noble friend will resist this amendment, in this form at least.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Minister of State, Home Department

My Lords, I thank the noble Lord, Lord Rosser, and my noble friend Lord Hodgson of Astley Abbotts for speaking to the amendment. As with all powers introduced in legislation, it is crucial that the necessary resources are available to law enforcement and prosecution agencies so that they are used effectively. As he mentioned, ARIS is essential to this work. Under this scheme, half of all assets recovered go back to the law enforcement and prosecution agencies involved. Put simply, the more they recover, the more they get back. I am pleased to say that £764 million has been raised since 2006, and over £257 million in the last three years has been invested in law enforcement agencies under this scheme. The new powers will ensure that there are even more-efficient ways of recovering assets and that they will be cheaper. Indeed, senior law enforcement officers gave evidence to the Commons Public Bill Committee that the powers will help agencies achieve more with the resources that they have. We have not downplayed the estimates in the impact assessment. These are provided subject to all the standard guidance based on input from law enforcement, the banks and others.

In addition, the Home Office share of ARIS is invested in front-line capabilities, including the regional organised crime units, which have received over £100 million in direct funding from the Home Office since 2013-14. Further to this, £5 million has been set aside from ARIS every year until the end of this Parliament to fund key national asset recovery capabilities, and we are fulfilling a manifesto commitment to return a greater percentage of recovered assets back to policing by investing all the Home Office share of the scheme’s money—above a certain baseline—in the multiagency regional asset recovery teams.

All the agencies listed in this amendment already report on their resources and results through departmental annual accounts and reports. As my noble friend said, this is about what they have achieved. They are subject to examination by the National Audit Office and Public Accounts Committee. The Criminal Finances Board, which is co-chaired by the Security Minister and the Economic Secretary to the Treasury, closely monitors resourcing, performance and support mechanisms such as training, to ensure that agencies are achieving results with the powers that Parliament imparts to them.

Finally, the Government has protected the NCA’s budget. In addition, new capital investment of over £200 million will be available over the period 2016 to 2020, to transform the NCA into a world-leading law enforcement agency, with new digital and investigative capabilities to tackle cybercrime, child exploitation and the distribution of criminal finances. The noble Lord, Lord Rosser, asked how many UWOs would be used and why so few were predicted. I said before—and the noble Lord said—that it was a conservative estimate, but we will encourage their use from day one. We are already actively engaging with law enforcement and prosecutors to encourage the use of all the new powers being introduced by the Bill. I hope with those words that the noble Lord is satisfied with my response. I know that we will keep an eye on this in the future but, for now, I hope that he will feel happy to withdraw his amendment.

Photo of Lord Rosser Lord Rosser Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Transport)

I thank the Minister for her response and the noble Lord, Lord Hodgson of Astley Abbotts, for his contribution. The noble Lord’s main criticism of the amendment—not the only one—was that it did not provide for the authorities mentioned to say what they had achieved. I would have thought it was for the Government to say what they expected the authorities concerned to achieve in the light of the provisions of the Bill and the new offences and enhanced powers that they were giving the agencies. As yet, however, I have not heard anything from the Government about what they expect the agencies to achieve as a result of the Bill. There is some difficulty in requiring the agencies to report when the Government have not set them any targets that they are meant to attain. I do not know whether it is the Government’s intention to tell noble Lords at some stage what they think the agencies should be able to achieve in respect, for example, of a reduction in money laundering or the number of people who are arrested as a result of carrying it out. What do they expect the agencies to achieve in relation to the additional powers in the Bill? I do not know if this is something on which the Minister is prepared to write and tell me. What are the goals that the Government think these additional powers, and the resources that they say they are going to put in, will be achieved by the agencies? That is what is missing.

We have been having debates about the new powers and the noble Baroness has reminded us of the amount of money that has been provided so far, but what we are not getting is what the Government think the Bill will achieve to improve the situation. Is the Minister, either now or at some stage in the future, able to give me any idea of what the Government are expecting as a result of the new and enhanced powers in the Bill?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Minister of State, Home Department

My Lords, as the noble Lord will know, the Government have not been fixated on targets, but we most certainly will have expectations of what can be achieved and they will be laid out in due course.

Photo of Lord Rosser Lord Rosser Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Transport)

How will they be laid out? Are they to be set out in regulations or will the Government be making a Statement?

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Minister of State, Home Department

I would guess that they will be laid out in regulations and they will be revealed in due course.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Minister of State, Home Department

Perhaps I may intervene once more. I will confirm in writing to the noble Lord that they will be laid out in regulations. I do not want to make misleading statements at the Dispatch Box, but I can let him know in due course.

Photo of Lord Rosser Lord Rosser Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Transport)

I would be happy for the noble Baroness to write to me, but whether the letter will set out what she has just said remains to be seen. However, I am happy for her to write to me on this issue; it would be very helpful. With that, I beg leave to withdraw the amendment.

Amendment 109 withdrawn.

Clauses 21 to 23 agreed.

Clause 24: Obstruction offence in relation to immigration officers

Amendment 110

Moved by Baroness Vere of Norbiton

110: Clause 24, page 78, line 43, leave out “6 months” and insert “1 month”

Photo of Baroness Vere of Norbiton Baroness Vere of Norbiton Baroness in Waiting (HM Household) (Whip)

My Lords, this set of amendments makes a number of minor changes to the Proceeds of Crime Act 2002 so that the powers in the Bill work as they were intended. As noble Lords will be aware, POCA is a complex piece of legislation and inevitably, as we have consulted further with key partners and parliamentary counsel, additional issues have arisen that require attention. Given their technical nature, I will not detain your Lordships for long, but I will highlight a few key points about these amendments.

They are primarily about ensuring consistency across the Bill. First, we are ensuring that penalties and fines mirror those already in POCA and elsewhere in statute. We will also provide that cash already being detained under terrorist forfeiture powers is not also liable for confiscation; this avoids double counting. These amendments will also extend existing powers for the courts in Scotland and Northern Ireland to order the payment of a criminal’s cash to settle an outstanding confiscation order. The Bill already provides for this in the English magistrates’ courts. We will provide that confiscation orders that have been discharged can be revisited if the criminal is found to have further assets. Finally, we are amending the Civil Jurisdiction and Judgments Act 1982 to allow for civil orders issued in one part of the UK to be recognised and enforced in another. I beg to move.

Amendment 110 agreed.

Clause 24, as amended, agreed.

Clause 25: Seized money: England and Wales

Amendments 111 and 112

Moved by Baroness Williams of Trafford

111: Clause 25, page 79, line 36, leave out “, subject to subsection (9),”

112: Clause 25, page 80, leave out lines 2 to 4

Amendments 111 and 112 agreed.

Clause 25, as amended, agreed.

Clause 26: Seized money: Northern Ireland

Amendments 113 to 115

Moved by Baroness Williams of Trafford

113: Clause 26, page 80, line 24, at end insert—“( ) In subsection (2), for paragraphs (a) and (b) substitute—“(a) has been seized under a relevant seizure power by a constable or another person lawfully exercising the power, and(b) is being detained in connection with a criminal investigation or prosecution or with an investigation of a kind mentioned in section 341.”( ) After subsection (2) insert—“(2A) But this section applies to money only so far as the money is free property.”( ) Omit subsection (3). ( ) In subsection (5)(as it has effect before and after its amendment by section 36 of the Serious Crime Act 2015), for “bank or building society” substitute “appropriate person”.( ) In subsection (5A), at the beginning insert “Where this section applies to money which is held in an account maintained with a bank or building society,”.( ) In subsection (7A), after “applies” insert “by virtue of subsection (1)”.”

114: Clause 26, page 80, line 25, leave out subsection (2) and insert—“( ) For subsection (8) substitute—“(8) In this section—“appropriate chief clerk” has the same meaning as in section 202(7);“appropriate person” means—(a) in a case where the money is held in an account maintained with a bank or building society, the bank or building society;(b) in any other case, the person on whose authority the money is detained;“bank” means an authorised deposit-taker, other than a building society, that has its head office or a branch in the United Kingdom;“building society” has the same meaning as in the Building Societies Act 1986;“relevant seizure power” means a power to seize money conferred by or by virtue of—(a) a warrant granted under any enactment or rule of law, or(b) any enactment, or rule of law, under which the authority of a warrant is not required.””

115: Clause 26, page 80, line 30, leave out “In subsection (8)(a)” and insert “In the definition of “bank” in subsection (8)”

Amendments 113 to 115 agreed.

Clause 26, as amended, agreed.

Clause 27: Seized money

Amendments 116 to 118

Moved by Baroness Williams of Trafford

116: Clause 27, page 81, line 12, leave out from “seized” to end of line 23 and insert “under a relevant seizure power by a constable or another person lawfully exercising the power, and(b) is being detained in connection with a criminal investigation or prosecution or with an investigation of a kind mentioned in section 341.(3) But this section applies to money only so far as the money is free property.”

117: Clause 27, page 81, line 37, after “applies” insert “by virtue of subsection (1)”

118: Clause 27, page 82, line 9, leave out from “person”” to end of line 18 and insert “means—(a) in a case where the money is held in an account maintained with a bank or building society, the bank or building society;(b) in any other case, the person on whose authority the money is detained;”

Amendments 116 to 118 agreed.

Clause 27, as amended, agreed.

Clauses 28 to 30 agreed.

Amendment 119

Moved by Baroness Williams of Trafford

119: After Clause 30, insert the following new Clause—“Reconsideration of discharged orders(1) The Proceeds of Crime Act 2002 is amended as follows.(2) In section 24 (inadequacy of available amount: discharge of order made under Part 2), after subsection (5) insert—“(6) The discharge of a confiscation order under this section does not prevent the making of an application in respect of the order under section 21(1)(d) or 22(1)(c).(7) Where on such an application the court determines that the order should be varied under section 21(7) or (as the case may be) 22(4), the court may provide that its discharge under this section is revoked.”(3) In section 25 (small amount outstanding: discharge of order made under Part 2), after subsection (3) insert—“(4) The discharge of a confiscation order under this section does not prevent the making of an application in respect of the order under section 21(1)(d) or 22(1)(c).(5) Where on such an application the court determines that the order should be varied under section 21(7) or (as the case may be) 22(4), the court may provide that its discharge under this section is revoked.”(4) In section 109 (inadequacy of available amount: discharge of order made under Part 3), after subsection (5) insert—“(6) The discharge of a confiscation order under this section does not prevent the making of an application in respect of the order under section 106(1)(d) or 107(1)(c).(7) Where on such an application the court determines that the order should be varied under section 106(6) or (as the case may be) 107(3), the court may provide that its discharge under this section is revoked.”(5) In section 174 (inadequacy of available amount: discharge of order made under Part 4), after subsection (5) insert—“(6) The discharge of a confiscation order under this section does not prevent the making of an application in respect of the order under section 171(1)(d) or 172(1)(c).(7) Where on such an application the court determines that the order should be varied under section 171(7) or (as the case may be) 172(4), the court may provide that its discharge under this section is revoked.”(6) In section 175 (small amount outstanding: discharge of order made under Part 4), after subsection (3) insert—“(4) The discharge of a confiscation order under this section does not prevent the making of an application in respect of the order under section 171(1)(d) or 172(1)(c).(5) Where on such an application the court determines that the order should be varied under section 171(7) or (as the case may be) 172(4), the court may provide that its discharge under this section is revoked.”(7) The amendments made by this section apply in relation to a confiscation order whether made before or after the day on which this section comes into force but do so only where the discharge of the order occurs after that day.”

Amendment 119 agreed.

Clause 31 agreed.

Clause 32: Confiscation orders and civil recovery: minor amendments

Amendments 120 to 125

Moved by Baroness Williams of Trafford

120: Clause 32, page 84, line 43, after “Wales)” insert “—( ) in subsection (2), after paragraph (e) insert—“(ea) paragraph 3(2), 6(2), 10D(1), 10G(2), 10J(3), 10S(2) or 10Z2(3) of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001;”;( ) ”

121: Clause 32, page 84, line 44, at end insert—“( ) after subsection (3)(c)(as inserted by paragraph 22 of Schedule 5) insert—“(d) it has been forfeited in pursuance of a cash forfeiture notice under paragraph 5A of Schedule 1 to the Anti- terrorism, Crime and Security Act 2001 or an account forfeiture notice under paragraph 10W of that Schedule;(e) it is detained under paragraph 5B, 5C, 9A or 10G(4) of that Schedule.”

122: Clause 32, page 85, line 1, after “Scotland)” insert “—( ) in subsection (2)—(i) omit “or” at the end of paragraph (e);(ii) after that paragraph insert—“(ea) paragraph 3(2), 6(2), 10D(1), 10G(2), 10J(3), 10S(2) or 10Z2(3) of Schedule 1 to the Anti- terrorism, Crime and Security Act 2001, or”;( ) ”

123: Clause 32, page 85, line 2, at end insert—“( ) after subsection (3)(c)(as inserted by paragraph 24 of Schedule 5) insert—“(d) it has been forfeited in pursuance of a cash forfeiture notice under paragraph 5A of Schedule 1 to the Anti- terrorism, Crime and Security Act 2001 or an account forfeiture notice under paragraph 10W of that Schedule;(e) it is detained under paragraph 5B, 5C, 9A or 10G(4) of that Schedule.”

124: Clause 32, page 85, line 3, after “Ireland)” insert “—( ) in subsection (2), after paragraph (e) insert—“(ea) paragraph 3(2), 6(2), 10D(1), 10G(2), 10J(3), 10S(2) or 10Z2(3) of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001;”;( ) ”

125: Clause 32, page 85, line 4, at end insert—“( ) after subsection (3)(c)(as inserted by paragraph 27 of Schedule 5) insert—“(d) it has been forfeited in pursuance of a cash forfeiture notice under paragraph 5A of Schedule 1 to the Anti- terrorism, Crime and Security Act 2001 or an account forfeiture notice under paragraph 10W of that Schedule;(e) it is detained under paragraph 5B, 5C, 9A or 10G(4) of that Schedule.”

Amendments 120 to 125 agreed.

Clause 32, as amended, agreed.

Amendments 126 and 127 not moved.

Clause 33 agreed.

Schedule 2 agreed.

Clause 34: Sharing of information within the regulated sector

Amendments 128 and 129

Moved by Baroness Williams of Trafford

128: Clause 34, page 90, line 44, at end insert—“( ) Subsection (1) applies whether or not the conditions in section 21CA were met in respect of the disclosure if the person making the disclosure did so in the reasonable belief that the conditions were met.”

129: Clause 34, page 91, line 1, leave out “by virtue of” and insert “in compliance, or intended compliance, with”

Amendments 128 and 129 agreed.

Clause 34, as amended, agreed.

Clause 35: Further information notices and orders

Amendments 130 to 137

Moved by Baroness Williams of Trafford

130: Clause 35, page 92, line 3, leave out from beginning to end of line 42 on page 94 and insert—“Further information orders22B Further information orders(1) A magistrates’ court or (in Scotland) the sheriff may, on an application made by a law enforcement officer, make a further information order if satisfied that either condition 1 or condition 2 is met.(2) The application must—(a) specify or describe the information sought under the order, and(b) specify the person from whom the information is sought (“the respondent”).(3) A further information order is an order requiring the respondent to provide—(a) the information specified or described in the application for the order, or(b) such other information as the court or sheriff making the order thinks appropriate,so far as the information is in the possession, or under the control, of the respondent.(4) Condition 1 for the making of a further information order is met if—(a) the information required to be given under the order would relate to a matter arising from a disclosure made under section 21A,(b) the respondent is the person who made the disclosure or is otherwise carrying on a business in the regulated sector,(c) the information would assist in—(i) investigating whether a person is involved in the commission of an offence under any of sections 15 to 18 or in determining whether an investigation of that kind should be started, or(ii) identifying terrorist property or its movement or use, and(d) it is reasonable in all the circumstances for the information to be provided.(5) Condition 2 for the making of a further information order is met if—(a) the information required to be given under the order would relate to a matter arising from a disclosure made under a corresponding disclosure requirement, (b) an external request has been made to the National Crime Agency for the provision of information in connection with that disclosure,(c) the respondent is carrying on a business in the regulated sector,(d) the information is likely to be of substantial value to the authority that made the external request in determining any matter in connection with the disclosure, and(e) it is reasonable in all the circumstances for the information to be provided.(6) For the purposes of subsection (5), “external request” means a request made by an authority of a foreign country which has responsibility in that country for carrying out investigations into whether a corresponding terrorist financing offence has been committed.(7) A further information order must specify—(a) how the information required under the order is to be provided, and(b) the date by which it is to be provided.”

131: Clause 35, page 95, line 7, leave out from “who” to “may” in line 8 and insert “is a constable, a National Crime Agency officer or a counter-terrorism financial investigator”

132: Clause 35, page 95, line 10, at end insert—“( ) Schedule 3A has effect for the purposes of this section in determining what is a business in the regulated sector.”

133: Clause 35, page 95, line 11, at end insert—““corresponding disclosure requirement” means a requirement to make a disclosure under the law of the foreign country concerned that corresponds to a requirement imposed by virtue of this Part;“corresponding terrorist financing offence” means an offence under the law of the foreign country concerned that would, if done in the United Kingdom, constitute an offence under any of sections 15 to 18;“foreign country” means a country or territory outside the United Kingdom;”

134: Clause 35, page 95, line 12, leave out from “officer”” to end and insert “means—(a) a constable,(b) a National Crime Agency officer authorised for the purposes of this section by the Director General of that Agency,(c) a counter-terrorism financial investigator, or(d) a procurator fiscal;”

135: Clause 35, page 95, leave out lines 19 to 27

136: Clause 35, page 95, line 29, leave out “a further information notice, or”

137: Clause 35, page 96, line 27, leave out “a further information notice, or”

Amendments 130 to 137 agreed.

Clause 35, as amended, agreed.

Clause 36: Forfeiture of terrorist cash

Amendments 138 to 140

Moved by Baroness Williams of Trafford

138: Clause 36, page 96, line 42, at end insert—“( ) betting receipts,”.”

139: Clause 36, page 97, line 4, leave out from “machine” to end of line 5

140: Clause 36, page 97, line 9, at end insert—“( ) “betting receipt” means a receipt in physical form that represents a right to be paid an amount in respect of a bet placed with a person holding a betting licence.( ) In sub-paragraph (5)—“bet”—(a) in relation to England and Wales and Scotland, has the same meaning as in section 9(1) of the Gambling Act 2005;(b) in relation to Northern Ireland, has the same meaning as in the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (S.I. 1985/1204 (N.I. 11)) (see Article 2 of that Order);“betting licence”—(a) in relation to England and Wales and Scotland, means a general betting operating licence issued under Part 5 of the Gambling Act 2005;(b) in relation to Northern Ireland, means a bookmaker’s licence as defined in Article 2 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985;“gaming machine”—(a) in relation to England and Wales and Scotland, has the same meaning as in the Gambling Act 2005 (see section 235 of that Act);(b) in relation to Northern Ireland, has the same meaning as in the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (see Article 2 of that Order).( ) In the application of sub-paragraph (5) to Northern Ireland references to a right to be paid an amount are to be read as references to the right that would exist but for Article 170 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (gaming and wagering contracts void).””

Amendments 138 to 140 agreed.

Clause 36, as amended, agreed.

Clause 37 agreed.

Schedule 3: Forfeiture of certain personal (or moveable) property

Amendments 141 to 155

Moved by Baroness Williams of Trafford

141: Schedule 3, page 132, line 6, at end insert—“(2A) An order under sub-paragraph (2) made by a magistrates’ court may provide for payment under paragraph 10N of reasonable legal expenses that a person has reasonably incurred, or may reasonably incur, in respect of—(a) the proceedings in which the order is made, or(b) any related proceedings under this Part of this Schedule.(2B) A sum in respect of a relevant item of expenditure is not payable under paragraph 10N in pursuance of provision under sub-paragraph (2A) unless—(a) the person who applied for the order under sub-paragraph (2) agrees to its payment, or(b) the court has assessed the amount allowed in respect of that item and the sum is paid in respect of the assessed amount. (2C) For the purposes of sub-paragraph (2B)—(a) a “relevant item of expenditure” is an item of expenditure to which regulations under section 286B of the Proceeds of Crime Act 2002 would apply if the order under sub-paragraph (2) had instead been a recovery order made under section 266 of that Act;(b) an amount is “allowed” in respect of a relevant item of expenditure if it would have been allowed by those regulations;(c) if the person who applied for the order under sub- paragraph (2) was an authorised officer, that person may not agree to the payment of a sum unless the person is a senior officer or is authorised to do so by a senior officer.”

142: Schedule 3, page 132, line 19, at end insert—“(6) For the purposes of sub-paragraph (2C)(c), a “senior officer” means—(a) in relation to an application made by a constable or a counter-terrorism financial investigator, a senior police officer;(b) in relation to an application made by an officer of Revenue and Customs, such an officer of a rank designated by the Commissioners for Her Majesty’s Revenue and Customs as equivalent to that of a senior police officer;(c) in relation to an application made by an immigration officer, such an officer of a rank designated by the Secretary of State as equivalent to that of a senior police officer.(7) In sub-paragraph (6), a “senior police officer” means a police officer of at least the rank of superintendent.”

143: Schedule 3, page 134, line 3, at end insert—“(5A) An order under sub-paragraph (1) made by a magistrates’ court may provide for payment under sub-paragraph (8) of reasonable legal expenses that a person has reasonably incurred, or may reasonably incur, in respect of—(a) the proceedings in which the order is made, or(b) any related proceedings under this Part of this Schedule.(5B) A sum in respect of a relevant item of expenditure is not payable under sub-paragraph (8) in pursuance of provision under sub- paragraph (5A) unless—(a) the person who applied for the order under sub- paragraph (1) agrees to its payment, or(b) the court has assessed the amount allowed in respect of that item and the sum is paid in respect of the assessed amount.(5C) For the purposes of sub-paragraph (5B)—(a) a “relevant item of expenditure” is an item of expenditure to which regulations under section 286B of the Proceeds of Crime Act 2002 would apply if the order under sub- paragraph (1) had instead been a recovery order made under section 266 of that Act;(b) an amount is “allowed” in respect of a relevant item of expenditure if it would have been allowed by those regulations.”

144: Schedule 3, page 134, line 13, leave out from first “of” to end of line 14 and insert “any provision of this paragraph only if the person is a senior officer or is authorised to do so by a senior officer.“Senior officer” has the same meaning in this sub-paragraph as it has in paragraph 10G(2C)(c).”

145: Schedule 3, page 134, line 16, at end insert— “(za) first, it must be applied in making any payment of legal expenses which, after giving effect to sub-paragraph (5B), are payable under this sub-paragraph in pursuance of provision under sub-paragraph (5A);”

146: Schedule 3, page 134, line 17, leave out “first” and insert “second”

147: Schedule 3, page 134, line 21, leave out “second” and insert “third”

148: Schedule 3, page 134, leave out lines 26 to 39

149: Schedule 3, page 135, line 15, at end insert—“(3A) An order under sub-paragraph (3) made by the High Court may include provision of the type that may be included in an order under paragraph 10G(2) made by a magistrates’ court by virtue of paragraph 10G(2A).(3B) If provision is included in an order of the High Court by virtue of sub-paragraph (3A) of this paragraph, paragraph 10G(2B) and (2C) apply with the necessary modifications.”

150: Schedule 3, page 136, line 32, at end insert—“( ) Where an order under paragraph 10I is made by a magistrates’ court, any party to the proceedings for the order (including any party to the proceedings under paragraph 10G that preceded the making of the order) may appeal against a decision to include, or not to include, provision in the order under sub-paragraph (5A) of paragraph 10I.”

151: Schedule 3, page 136, line 33, leave out “sub-paragraph (1)” and insert “this paragraph”

152: Schedule 3, page 136, line 37, leave out “sub-paragraph (1)” and insert “this paragraph”

153: Schedule 3, page 137, line 42, at end insert—“(aa) second, they must be applied in making any payment of legal expenses which, after giving effect to paragraph 10G(2B)(including as applied by paragraph 10J(3B)), are payable under this sub-paragraph in pursuance of provision under paragraph 10G(2A) or, as the case may be, 10J(3A);”

154: Schedule 3, page 137, line 43, leave out “second” and insert “third”

155: Schedule 3, page 138, line 1, leave out “third” and insert “fourth”

Amendments 141 to 155 agreed.

Schedule 3, as amended, agreed.

Clause 38 agreed.

Amendment 156

Moved by Lord Empey

156: After Clause 38, insert the following new Clause—“Assets owned by persons involved in supplying arms to terrorist organisations(1) Where assets based in the United Kingdom are frozen under the Anti-terrorism Crime and Security Act 2001 or European Union Council Regulations adopted by virtue of Chapter 2 of Title V of the Treaty on European Union, and the assets meet the requirement in subsection (3), the Treasury must take all actions necessary to prevent the release of the frozen assets until the circumstances in subsection (5) are met.(2) The actions referred to in subsection (1) may include putting in place such domestic asset freezing measures, under the Terrorist Asset-Freezing etc. Act 2010, as are necessary to ensure the effective implementation of this section. (3) The requirement in subsection (1) is that the assets are owned by persons who are or have been involved in supplying terrorist organisations in the United Kingdom with arms, including explosive materials.(4) A person is deemed to be or have been involved in supplying terrorist organisations in the United Kingdom with arms if—(a) the United Nations Security Council has made a Resolution to that effect; or(b) the Treasury reasonably believes that the person is or has been involved in supplying terrorist organisations in the United Kingdom with arms.(5) The circumstances in subsection (1) are that a settlement has been reached in respect of compensation to be paid to United Kingdom citizens affected by the supply of arms referred to in subsection (3).(6) In this section—“terrorist organisations in the United Kingdom” means organisations which are based in the United Kingdom, and that the Treasury reasonably believes are or have been involved in terrorist activity, within the meaning of the Terrorist Asset-Freezing etc. Act 2010; and“United Kingdom citizen” has the same meaning as in the British Nationality Act 1981.”

Photo of Lord Empey Lord Empey UUP

My Lords, Members may be familiar with this theme, to which I have returned on a number of occasions, including via a Private Member's Bill. It follows the principle that persons who have been engaged in criminal activity, persons who have been engaged in activities contrary to human rights and persons who have been involved in terrorism and who have attacked this country consistently over a long period should not have access to their assets without the opportunity for victims of the activities of those individuals, organisations or, in this case, state to have those assets forfeited to the extent of the injuries inflicted.

The position is very simple: for many years, the state of Libya supplied terrorists with material, primarily in the form of Semtex. It provided training and logistical support. It provided boatloads—literally—of weapons. It provided the arms, training and logistics for a terrorist organisation. Many persons in the United Kingdom were injured and suffered great loss as a direct result of that activity. If we are contemplating a Bill which has a section in it dealing with terrorism, that seems the perfect opportunity for Her Majesty’s Government to deal with this matter.

I know that the Minister will say, “Oh, but there’s a United Nations resolution, and there are resolutions of the European Union”—I am sure I could read out her reply blindfold. However, the United Kingdom is a permanent member of the Security Council. We are a member of the European Union. At this point in time, after years and years, we have not even asked our European partners or the United Nations for any variation whatever on the asset-freezing resolutions to take account of the humanitarian needs of our own citizens. Other countries—the United States, France, Germany and Italy—have all had compensation paid to their citizens as a result of terrorist activity. We are the glaring exception, despite the fact that more people have suffered in this country than in any other—there is no argument about that.

I have been writing to government since 2002. My first letter was to Tony Blair; it was replied to by Mike O’Brien, at that time in the Home Office. I have had letters from Prime Minister Cameron. We had letters from the noble Baroness, Lady Warsi, when she was at the Foreign Office, the noble Lord, Lord Howell of Guildford, and other Ministers in Administrations of all parties. The Minister may be aware that a group of us from all parties is pursuing this issue in both places. Even today, I know that efforts have been made by an all-party group of Back-Benchers in the other place to go to the Backbench Business Committee to see whether they can get support for a debate. I know that the honourable Member for Poplar and Limehouse, Jim Fitzpatrick, whose patch includes the site of the London Docklands bomb, is active in this and introduced a debate in Westminster Hall early last year.

There is a broad swathe of support for the measure in your Lordships’ House because it passed my Private Member's Bill, the Asset Freezing (Compensation) Bill, last year. That has unfortunately been stalled for three solid months in a row using the procedural device of objecting in the other place. It is now scheduled to come up on 12 May but I have no doubt that it will be blocked again. The reason is that last summer we went to see Treasury and Foreign Office officials and we challenged them. I also went to the Northern Ireland Affairs Select Committee to hear evidence from former Foreign Secretary Jack Straw. That was very revealing. His reaction was, “These people were compensated”. That is technically true but they were compensated by the British taxpayer, not the people who perpetrated the acts or provided the material to attack them. That was a perverse position. It seems that there has been the most bizarre attitude over the last 15 to 20 years. Where would you get a situation in this day and age where another country would conduct a proxy war against you, injure your citizens, and you ignore it?

We happen to know that there is £9.5 billion of assets attributed to the Libyan regime headquartered in London. We should ask our colleagues in the United Nations and the European Union to see if we can even take a lean against part of those assets to help our own citizens who were injured as a result of this activity. The Bill is another vehicle where this is consistent with the principles behind it. It is consistent with justice and with the fact that the people who supplied that material were in severe breach of all human rights legislation that you could imagine. Some of the most terrible injuries were inflicted by these people. Part 2 of the Bill would extend the measures such as disclosure orders to apply to terrorism investigations. We see it talk about gross human rights violations, and seizure and forfeiture powers. The principles are all there in the Bill. We should use the scope of this legislation to deal with one of the most significant and long-running major injustices that has afflicted our people.

Also, Her Majesty’s Government should make some serious effort—I see no sign that it has been made heretofore—in the United Nations and European Union to get our partners to help us. I am all for asset-freezing and resolutions, and I understand that the Government cannot just act unilaterally. However, they have not even bothered to lift a finger for nearly 20 years. I find that unacceptable. The Bill provides a vehicle whereby we can seriously address and right a great wrong. I beg to move.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Minister of State, Home Department

My Lords, I am grateful to the noble Lord for highlighting this issue. I pay tribute to his many years on counterterrorism matters. I am very pleased to be able to respond.

As we heard, Amendment 156 would impose a duty on the Treasury to prevent the release of assets of an individual that have been frozen under various legislative regimes by using “all action necessary”, including considering the use of a designation under the Terrorist Asset-Freezing etc. Act 2010. The Terrorism Act 2000, or TACT, already includes a number of criminal offences under Sections 15 to 18 for terrorist financing, including the use, possession or funding of assets in support of terrorist activity. Specifically, Section 23 of TACT provides for the forfeiture of money and/or property following a conviction for these and other terrorism offences. This means that assets can be frozen by way of a restraint order during the investigation and prosecution of such offences, and subsequently forfeited upon a successful conviction, ensuring that they are not available to terrorist organisations.

The element of the noble Lord’s amendment relating to compensation is also covered by paragraph 4A of Schedule 4 to TACT, which allows for the proceeds of the forfeiture of property to be paid as compensation to the victims of terrorism.

Finally, the Bill is amending the Anti-terrorism, Crime and Security Act 2001 to allow for the freezing and subsequent forfeiture of funds held in bank accounts that are terrorist cash or property. A court may forfeit the funds in a frozen account if it is satisfied that this is or represents terrorist cash or property. There are therefore already a considerable number of powers available to the police in these situations.

The Government are also concerned that, as drafted, the amendment raises human rights implications. In particular, it does not make sufficient provision for due process for individuals to challenge the action taken by the Treasury, and the threshold for the Treasury taking such action may not be sufficiently robust when compared with the standard applied under the provisions of ATCSA and TAFA.

On this basis, I hope the noble Lord will see that his proposed approach is not the right one in this situation. I will take back his point about the European Union and what could be done to that end, and I will get back to him on that. I hope he will feel able to withdraw his amendment.

Photo of Lord Empey Lord Empey UUP 9:30 pm, 28th March 2017

I thank the Minister for her reply. She referred to a number of powers in the Bill. I am all for those but they do not deal with the specific issues that I am trying to get at, where a state, or a representative of a state, has assets in this city, on a massive scale, that are frozen because of the United Nations resolution, which was followed by a European Union agreement, which, incidentally, was revised substantially in January last year. We have not addressed those issues. I am grateful that the Minister is going to take that back but dare I use the phrase, “I haven’t gone away, you know”? In the event that the Minister is unable to satisfy me on this matter, I reserve the right to bring it back on Report. With that, I beg leave to withdraw the amendment.

Amendment 156 withdrawn.

Schedule 4 agreed.

Clause 39 agreed.

Clause 40: Offences in relation to counter-terrorism financial investigators

Amendment 157

Moved by Baroness Williams of Trafford

157: Clause 40, page 104, line 45, after “fine” insert “not exceeding level 3 on the standard scale”

Amendment 157 agreed.

Amendment 158

Moved by Baroness Vere of Norbiton

158: Clause 40, page 105, line 5, at end insert “or Part 1 of Schedule 5A (terrorist financing investigations in England and Wales and Northern Ireland: disclosure orders)”

Photo of Baroness Vere of Norbiton Baroness Vere of Norbiton Baroness in Waiting (HM Household) (Whip)

My Lords, today’s final group of amendments also concerns Part 2 of the Bill on the financing of terrorist-related activity.

Government Amendment 158 will extend the existing assault and obstruction offences in respect of counterterrorism financial investigators—CTFIs—to include assault or obstructing CTFIs who are exercising powers in relation to the disclosure order power introduced in Clause 33. This power is comparable to ones in Schedule 5 to the Terrorism Act 2000.

Amendment 160 would insert provision into the Terrorism Act so that court orders made in one part of the UK for the purposes of or in connection with the investigation of terrorist financing can be enforced in another. This power is comparable to powers in Schedule 5 to the Terrorism Act 2000.

Amendment 160 inserts provisions into the Terrorism Act so that court orders made in one part of the UK for the purposes of, or in connection with, the investigation of terrorist financing can be enforced in another. This power is being provided to ensure that the new powers in this Bill—for example, disclosure orders and further information orders—can be enforced more effectively. We are also taking the opportunity to ensure that existing provisions in the Terrorism Act—for example, production orders—can be enforced in the same way. The power to enforce orders across UK borders is already available for equivalent orders made under the Proceeds of Crime Act. I beg to move.

Amendment 158 agreed.

Amendment 159

Moved by Baroness Williams of Trafford

159: Clause 40, page 105, line 33, after “fine” insert “not exceeding level 3 on the standard scale”

Amendment 159 agreed.

Clause 40, as amended, agreed.

Amendment 160

Moved by Baroness Williams of Trafford

160: After Clause 40, insert the following new Clause—“Enforcement in other parts of United KingdomEnforcement in other parts of United KingdomAfter section 120B of the Terrorism Act 2000 (inserted by section 40 above) insert—“ 120C Enforcement of orders in other parts of United Kingdom(1) Her Majesty may by Order in Council make provision for an investigatory order made in one part of the United Kingdom to be enforced in another part.(2) In subsection (1)“investigatory order” means any of the following kinds of order—(a) an order under section 22B (further information orders);(b) an order under paragraph 5 of Schedule 5 (production orders: England and Wales and Northern Ireland) that is made in connection with a terrorist investigation in relation to terrorist property;(c) an order under paragraph 13(1)(b) of that Schedule that is made in connection with material produced or made available as a result of an order within paragraph (b) of this subsection;(d) an order under paragraph 22 of Schedule 5 (production orders: Scotland) that is made in connection with a terrorist investigation in relation to terrorist property;(e) an order under paragraph 30(1)(b) of that Schedule that is made in connection with material produced or made available as a result of an order within paragraph (d) of this subsection;(f) an order under paragraph 9 of Schedule 5A (disclosure orders: England and Wales and Northern Ireland);(g) an order under paragraph 19 of that Schedule (disclosure orders: Scotland);(h) an order under paragraph 1 of Schedule 6 (financial information orders);(i) an order under paragraph 2 of Schedule 6A (account monitoring orders).(3) An Order under this section may apply (with or without modifications) any provision of or made under—(a) an Act (including this Act),(b) an Act of the Scottish Parliament, or(c) Northern Ireland legislation.(4) An Order under this section—(a) may make different provision for different purposes;(b) may include supplementary, incidental, saving or transitional provisions.(5) Rules of court may make whatever provision is necessary or expedient to give effect to an Order under this section. (6) A statutory instrument containing an Order under this section is subject to annulment in pursuance of a resolution of either House of Parliament.””

Amendment 160 agreed.

Clause 41 agreed.

House resumed.