Terrorist Asset-Freezing etc. Bill [HL]

My Lords, the purpose of Amendment 1 is to clear up an ambiguity that emerged only during Report on the Bill. The amendment thus falls within the type of amendment that is normally allowed on Third Reading. The question is whether Clause 2, which gives Treasury Ministers the power to designate a person and freeze his assets, has extra-territorial effect. On Report, the noble Lord, Lord Sassoon, argued that Clause 2 has such effect; indeed, that was a crucial step in his argument generally, as it was in the argument of the noble Lord, Lord Bach. The noble and learned Lord, Lord Wallace of Tankerness, made the same point in Committee when he told us that the Treasury had designated many individuals outside the jurisdiction in the past. I do not know whether they were British subjects, but the fact that something has happened does not necessarily mean that it was lawful. My argument was that Clause 2 does not have extra-territorial effect, so ““person”” in Clause 2 means a British subject or foreigners within the territorial jurisdiction. Whether I am right or wrong about that, I had hoped that we could have cleared up the point before the Bill went to the Commons. I had hoped the Treasury might table an amendment to say what its understanding of Clause 2 is. After a longish discussion on Friday morning, the Treasury failed to do that so I felt obliged to table this amendment late on Friday afternoon. What does ““person”” in Clause 2 mean? The noble Lord argues that it includes foreigners outside the jurisdiction. Of course, Parliament can legislate to cover foreigners outside the jurisdiction; there is no question about that. However, the presumption is that Parliament does not intend to do so unless very clear words are used. That presumption has been around for a very long time, as I hope to show. It is stated in section 130 of Bennion’s Statutory Interpretation. The presumption has also been applied in so many cases that it is difficult to know which to pick, so let me choose one case—about the meaning of the word ““debtor”” in the Bankruptcy Act of 1869—that I think illustrates the point. The case concerns two Chilean subjects who carried on business in Liverpool. They had assets here within the jurisdiction and they incurred debts within the jurisdiction but they were not resident here. An English creditor wished to start bankruptcy proceedings against the Chileans. It was argued that the general word ““debtor”” in the 1869 Act should be given a wide meaning so that it included debtors all over the world, just as it has been argued that ““person”” in Clause 2 covers persons everywhere. That argument was, however, decisively rejected by the Court of Appeal. It was held that ““debtor”” covered only British nationals or foreigners within the jurisdiction, which of course the Chileans were not. That case—I refer to ex parte Blain, decided in 1879, volume 12, Chancery Division, at page 522—has been followed on innumerable occasions ever since. There is no doubt that the presumption to which I refer exists and is applied as a matter of course. What is the reason for the presumption? The answer was given by Lord Justice James in the same case when he said that it rests on the broad general principle of comity, the comity which should exist between independent states. Applying that to the facts here, I ask whether, if the French authorities were to designate a British subject resident in England and freeze his assets because they believed him to be a terrorist, we would regard that as a friendly act. Clearly, we would not. The same must also apply the other way round. If the noble Lord, Lord Sassoon, is right and Clause 2 has the extra-territorial effect that he suggests, the Treasury could designate a French subject, freeze his assets here in London and require him to come to London in order to appeal against the designation under Clause 26. If a Treasury Minister did that, how would it play in France? It may be argued that in the real world we would never dream of designating a French subject. That might be right—I hope it is—but it is the power to designate contained in Clause 2, if the noble Lord’s construction is right, that is repugnant to comity. There is no doubt that the presumption exists and it is based on a sound principle of international law. The presumption is reinforced on the facts of this particular case by what is contained in other provision of the Bill. Clause 33 gives extra-territorial effect to offences committed under Clauses 11 to 15 but not to Clause 2. That is a strong indication that Clause 2 was not intended to have extra-territorial effect. Clause 3 provides for notification and it works well in the case of foreigners within the jurisdiction, but how does it work in relation to foreigners in Afghanistan? How does Clause 17, ““Licences””, work in relation to foreigners resident abroad? Quite apart from the presumption, which is what my argument rests on, all the indications in the Bill are that it was not intended to have extra-territorial effect. How does the noble Lord, Lord Sassoon, put his case? He cannot say that the presumption is excluded by clear language because there is no such language in the Bill. Instead, he says that the presumption is excluded by necessary implication as it is incompatible with our international obligations under Security Council regulation 1373 of 2001. With respect, that is where the basic error lies. The presumption is not incompatible with regulation 1373—quite the contrary—as one can see from what the regulation says. Regulation 1373 imposes an obligation on all states individually to criminalise the provision of funds by their nationals or in their territories—that must mean foreigners in their territories as you cannot criminalise a fund. Exactly the same applies to the freezing of assets. Each state is responsible for designating its own subjects and freezing their assets. Each state is responsible for designating foreigners within its jurisdiction and freezing their assets. Nowhere is it provided that states should designate foreigners outside their territorial jurisdiction. Indeed, there is nothing to suggest that that was ever the intention. I accept that an increasing number of international conventions confer what is called ““universal jurisdiction””, but no one suggests that regulation 1373 has that effect. If the Treasury has reason to believe that a fund in London is held by a French terrorist who is not resident here, it must simply inform the French authorities who, if they agree, will take the necessary action by designating the individual and freezing his assets. It is as simple as that. I accept that some countries are unwilling to designate their subjects as terrorists, but that cannot affect the meaning of the word ““person”” in Clause 2. I beg to move.