Liberty s briefing on the Terrorist Asset- Freezing (Temporary Provisions) Bill in the House of Commons

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1 Liberty s briefing on the Terrorist Asset- Freezing (Temporary Provisions) Bill in the House of Commons February 2010

2 About Liberty Liberty (The National Council for Civil Liberties) is one of the UK s leading civil liberties and human rights organisations. Liberty works to promote human rights and protect civil liberties through a combination of test case litigation, lobbying, campaigning and research. Liberty Policy Liberty provides policy responses to Government consultations on all issues which have implications for human rights and civil liberties. We also submit evidence to Select Committees, Inquiries and other policy fora, and undertake independent, funded research. Liberty s policy papers are available at Contact Isabella Sankey Anita Coles Director of Policy Policy Officer Direct Line Direct Line: bellas@liberty-human-rights.org.uk anitac@liberty-human-rights.org.uk 2

3 1. The Terrorist Asset Freezing (Temporary Provisions) Bill was listed for debate 2 working days before its Second Reading scheduled for 8 February The Bill itself was only published one working day before its Second Reading. This Bill is being fast-tracked through Parliament, receiving its Second and Third Reading all in one day. The Government states that this is necessary in light of the Supreme Court s decision in Ahmed v HM Treasury [2010] UKSC 2 which was handed down on 27 January In this case, the Court struck down two orders made under a 1946 Act that gave effect to United Nations Security Council resolutions regarding the freezing of alleged terrorist assets. 1 The Court held that the orders were beyond power as they had not been properly authorised by Parliament and did not provide effective safeguards. This Bill seeks to deem one of those orders, and subsequent amending orders, to be valid, despite the Court s decision. The Bill does not contain any substantive provisions that Parliament can consider it merely seeks to authorise what was done under the now impugned orders and continue them in operation for close to one year. 2. These orders allowed the Treasury to designate any person it suspects is or may be a person who commits, attempts, participates or facilitates acts of terrorism. It may also designate any person the UN Security Council has designated to be on its asset freezing list. As Lord Hope in the Supreme Court explained, a person designated under such an order is subjected to a regime which indefinitely freezes their assets under which they are not entitled to use, receive or gain access to any form of property, funds or economic resources unless licensed to do so by the executive. 2 The explanatory notes to the Bill reveal that there are currently 33 people in the United Kingdom, including UK citizens, subject to an asset freeze under the UN Orders, with a freeze on a total of approximately 151,000. The way that the system has been administered affects not just the designated person but also family members and others who may wish to provide economic assistance to the designated person. As the Supreme Court said: 1 See the Terrorism (United Nations Measures) Order 2006 and the Al-Qaida and Taliban (United Nations Measures) Order 2006 made under section 1 of the United Nations Act Note that the Court struck down the entirety of the first order on the basis that it did not have proper parliamentary authority. In relation to the second order it struck down one regulation within the order that related to the designation of a person under a Security Council resolution on the basis that as there was no appeal rights to being designated by the Security Council, this breached the right under the common law to an effective remedy and the order was therefore ultra vires. 2 See Ahmed v HM Treasury [2010] UKSC 2 (Ahmed) at paragraph [39] (Lord Walker and Lady Hale agreeing). 3

4 The overall result is very burdensome on all the members of the designated person's family. The impact on normal family life is remorseless and it can be devastating the restrictions strike at the very heart of the individual's basic right to live his own life as he chooses It is no exaggeration to say that designated persons are effectively prisoners of the state. I repeat: their freedom of movement is severely restricted without access to funds or other economic resources, and the effect on both them and their families can be devastating. 3 Because of the need for proper parliamentary oversight, and the absence of any system of an effective remedy to challenge a decision made by the Security Council to designate a person, the Supreme Court quashed these orders. On 4 February 2010, the Court also ruled that its decision would become effective immediately, meaning that the assets of people designated under these orders cannot remain frozen using these powers. 4 The Government has said that it needs to introduce emergency (or as it prefers, fast-track ) legislation to provide for these assets to continue to remain frozen. The explanatory notes to the Bill state that it is necessary for the Bill to be fast-tracked as there is a risk that, in the absence of a replacement asset-freezing regime, assets currently subject to restrictions will be released and may be diverted for terrorist purposes 3. At the outset it should be noted that the Government has allowed this socalled emergency situation to arise. Despite the Government stating in the explanatory notes to the Bill that the Treasury have introduced this Bill at the earliest possible opportunity, as the Supreme Court noted, concern about the use of powers under the 1946 Act is not new. In 1999 the House of Commons Foreign Affairs Committee raised concerns about the use of the 1946 Act to give effect to a Security Council resolution. 5 Moreover, the relevant Security Council (SC) resolutions that require the UK to implement asset freezing powers were passed in Other countries have not relied on delegating powers to the executive to give effect to SC resolutions. Both Australia and New Zealand, while they initially enacted regulations under their equivalent Acts to give effect to SC resolutions, later made provision for 3 See Ahmed per Lord Hope (DP) (with whom Lord Walker and Lady Hale agreed at paragraphs [38] and [60]. 4 See Her Majesty s Treasury v Ahmed [2010] UKSC 5. 5 See Ahmed at paragraph [48]. 4

5 asset freezing in primary legislation. 6 Indeed, in this case the High Court first ordered the relevant orders to be quashed on 24 April 2008, giving the Government plenty of notice that it was not unlikely that the ultimate decision of the courts might go the same way. One would have thought that in a matter of such importance as the fight against terrorism, the Government would have had a plan B. 4. The Bill provides for temporary validity of three orders under the 1946 Act (the UN Terrorism Orders): the 2006 order was the one quashed by the Supreme Court; the other two orders are amending orders that are liable to be quashed on the same grounds. The explanatory notes to the Bill state that no existing legislation is in place which would have the effect of saving temporarily the UN Terrorism Orders, or providing comparable powers to make asset freezes. However, there are already powers in primary legislation that would allow for the freezing of suspected terrorist assets. Prior to the SC resolutions being made in 2001, the UK Parliament had already enacted the Terrorism Act 2000 which created of a criminal regime dealing with the funding of terrorism. This was followed by the Anti-Terrorism, Crime and Security Act 2001, which was rushed through Parliament after September 11, Part 2 of this Act provides for the making of freezing orders. Orders made under this Act must be kept under review by the Treasury, are time limited and must be approved by both Houses of Parliament. As Lord Hope in Ahmed points out in relation to this Act: Detailed provision is made in Sch 3 for the content of freezing orders, including a system for the granting of licences authorising funds to be made available. Orders made under the Act are subject to the affirmative resolution procedure (s 10), and they cease to have effect after two years (s 8). To a large degree, the power to make freezing orders under this Act enables the Treasury to do what paras 1(d) and 2(d) of SCR 1373(2001) require (see para 21 above). But it is more precisely worded, and it contains various safeguards Yet the Treasury have, it seems, chosen not to make use of the powers given to them by this Act, preferring to use the general power under s 1 of the 1946 Act. In my opinion the rule of law requires that the actions of the Treasury in this context be subjected to judicial scrutiny. 7 6 See Ahmed at paragraph [50]. 7 Ahmed at paragraph [53]. 5

6 Further, the Counter-Terrorism Act 2008 introduced a procedure for setting aside financial restrictions decisions taken by the Treasury. 5. It is clear then that there are other powers available to the Government already in primary legislation to freeze relevant assets. These have not been used. The Government must properly explain to Parliament why this emergency legislation is even necessary in light of this fact. It must also explain why it failed to consider legislation at an earlier stage given the not unlikely event that the Supreme Court would quash the relevant orders. 6. It is essential that Parliament has an opportunity to fully and properly consider this legislation. Clearly a few hours of rushed debate in each House is not proper parliamentary scrutiny. The measures proposed in the Bill enormously affect an individual s rights. As Lord Brown said in Ahmed: The draconian nature of the regime imposed under these asset-freezing orders can hardly be over-stated. Construe and apply them how one will and to my mind they should have been construed and applied altogether more benevolently than they appear to have been they are scarcely less restrictive of the day to day life of those designated (and in some cases their families) than are control orders. In certain respects, indeed, they could be thought even more paralysing A person designated by Security Council resolution has no opportunity to appeal the decision to place him or her on the list. Yet, as Lord Rodger pointed out the harsh reality is that mistakes in designating will inevitably occur and, when they do, the individuals who are wrongly designated will find their funds and assets frozen and their lives disrupted, without their having any realistic prospect of putting matters right. 9 Further, clause 2 of the Bill also has retrospective effect and contains provisions to ensure that potential litigants are denied access to a court to make a claim for damages or other remedies against persons other than the Treasury for the period between 4th February 2010 and the coming into force of the Bill. Parliament must think very carefully before it validates orders ruled by the courts to be unlawfully made, and makes its application of that retrospective. Retrospective legislation is generally constitutionally improper and contrary to the rule of law. It should not be issued lightly, and certainly not without a full and proper debate. 8 Ahmed at paragraph [192]. 9 Ahmed at paragraph [182]. 6

7 8. It is clear that these measures affect fundamental human rights and have had a devastating effect on those on which they have already been placed. As the Supreme Court held, measures such as these require parliamentary approval. In Ahmed, Lord Rodger (with Lady Hale agreeing) stated, that given the grave and direct affect on the legal rights of individuals these matters should not pass unnoticed in the democratic process and that the democratically elected Parliament, rather than the executive, should make the final decision that this system, with its inherent problems, should indeed be introduced into our law It is clear then that the Supreme Court was convinced of the need for Parliament to properly and carefully consider the nature of these harsh and repressive proposals. While undoubtedly preventing terrorists from obtaining funds is an important part of any system for combating terrorism, measures to do so should not be introduced without necessary safeguards against abuse (such as an appropriate appeals mechanism) and not without full and proper debate. As we said last year in our evidence to the Constitution Committee on Emergency legislation: When legislation is introduced into Parliament and passed within a few weeks or even days it is impossible for Parliament fully to analyse and debate the proposals put before it. It is also extremely difficult for NGOs and civil society to have the time to examine the proposals and brief parliamentarians on the likely impact of such legislation. Legislation drafted in haste will inevitably contain errors be they minor or more substantial. Even more worryingly, the policy behind such legislation will at best be ill-thought out and at worst may be motivated by political objectives to be seen to be responding to an event or judgment. Legislation of this kind should never be devised as a blunt tool for expressing political revulsion at terrifying acts. Statutes must be drafted with greater care than speeches. It is not sufficient that the passing of a new law would send tough signals to Britain s enemies, nor that it somehow makes some of us feel safer. Each proposed interference with democratic rights and freedoms must be carefully weighed against its purported benefits. Experience shows that such laws are likely to be with us for a very long time Ahmed at paragraph [186]. 11 See Liberty s submission to the Constitution Committee Inquiry Emergency Legislation, March 2009, available at: 7

8 10. Parliamentarians should carefully consider whether, in light of the existing legislation for the making of freezing orders, they can justify allowing such broad, unchecked powers to be rushed through without any real debate. Parliamentary scrutiny surely means more than a mere rubber-stamp. Anita Coles 8