On the freezing of Iceland
Following up on This may come as a surprise, an article briefly outlining why we should be careful about what legislation says as well as what Ministers promise – the example being the use against Iceland of the asset freezing measures in (s4) Anti-Terrorism, Crime and Security Act 2001 – I came across this in a recent debate (on the Counter Terrorism Bill, as it happens):
This amendment is aimed to probe exactly what is caught within the scope of the legislation that the Government are using to make the freezing orders. Laid before the House at the moment is also the Landsbanki Freezing Order 2008, which we may well debate later. For today, I want to take the Chamber back to the original legislation that the Government passed in order to progress the freezing of assets in cases of terrorism, which was of course the Anti-terrorism, Crime and Security Act 2001. That Act was passed in 2001 in a hurry as emergency legislation in response to the 11 September attack. As emergency legislation, that Bill was hardly debated in the Commons, as MPs have subsequently pointed out on several occasions—for example, in the other place on 25 February 2004 at col. 312. David Blunkett’s explanation of the asset-freezing powers at the time, however, was quite clear:
“The emergency legislation will build on the provisions of the Proceeds of Crime Bill to deal specifically with terrorist finance through monitoring and freezing the accounts of suspected terrorists”.—[Hansard, Commons, 15/8/01; col. 923.]
In other words, it was quite clear when they were brought in that these powers were intended for use against terrorists, and we supported them at that time.
In this House there was a little more scrutiny, and Members asked the Minister why there was no explicit reference to terrorism in the drafting of the clause. When she was so challenged, the Minister, the noble Baroness, Lady Symons of Vernham Dean, insisted that the reason why there was no direct mention of terrorism was that,
“it is not possible to separate out the matters in a practical sense because the other crimes are the source of revenue for terrorists”.
She also said:
“The Government do not believe that it is possible to define terrorism in a way that would distinguish it from activities related to it”.—[Hansard, 3/9/01; col. 600.]
In other words, the powers were meant to tackle terrorism; they could not be defined too closely but were certainly supposed to tackle crimes connected with terrorism.
The problem that the Government have had in recent weeks is that there was no intention on the part of those supporting this legislation that it should be used in matters economic, so that the Government might in this way freeze the assets of another country’s bank, as in the case of Landsbanki. I have tabled this new clause so that the Committee can discuss the principle at stake here. Parliament has provided very serious new powers on terrorism since 2001, and this is one example of where such a power is being used somewhat differently from the way we envisaged. Whether the Government were right, in economic terms, to take the action they did is a different question. The question here is whether we should be using terrorism legislation and associated legislation to achieve a very different end.
At this stage, this is a probing amendment to try to make sure that the Government are quite clear under what legislation and to what ends they will be using these powers. I beg to move.
Lord Goodhart came up with a good hypothetical example:
I would like to take a little further the argument that has just been put forward by my noble friend and look at the important question of how the courts would, or will, interpret Section 4 of the 2001 Act if the order relating to the Icelandic bank is brought forward. It is very difficult to read Section 4 of the 2001 Act as it stands as applying to purely economic matters. For example, if a foreign country, perfectly understandably and legitimately, bans the import of British beef on the grounds of foot and mouth disease or mad cow disease, that would unquestionably be an act to the detriment of the United Kingdom’s economy. I cannot imagine any court interpreting that order banning the export of British cattle as being within the operation of Section 4.
The Government have to face the fact that if Section 4 in its present form comes in front of a court, there will be great difficulty in interpreting it. It is perfectly possible that that court might come to the conclusion that the use of these powers in the present circumstances against the Icelandic bank was not, in fact, a legitimate use of Section 4. The Government will have to consider not only what Section 4 should mean but what it in fact means now.