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Lord Goodhart moved Amendment No. 99:


The noble Lord said: My Lords, this is an amendment to Schedule 4, the new schedule introduced by the government amendment in Grand Committee. It introduces new provisions in Schedule 4 to the Terrorism Act 2000. They provide for the making of freezing orders relating to certain property which may be terrorist property.

Paragraph 11B of Schedule 4 to the 2000 Act contains provisions in relation to England and Wales for a domestic freezing order; that is, an order made by the English court to freeze property in a participating country. Similar provisions have been put forward for Scotland and Northern Ireland in Amendment No. 108, which has been spoken to but not yet agreed.

The procedure involves the making of a certificate by the High Court. It may make a certificate under paragraph 11B(2) of Schedule 4 if,


    "it is satisfied that there is a good arguable case that the property is likely to be used for the purposes of a listed offence".

As we know, a "listed offence" means a terrorist offence. Paragraph 11D covers overseas freezing orders; that is, an order made by the court in a participating country in relation to property in the

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United Kingdom. Paragraph 11D(3)—it is about to be amended in Amendment No. 100—makes it a condition of the overseas freezing order that it has been made because the appropriate authority considers that,


    "the property is likely to be used for the purposes of a listed offence".

Here, that is a terrorist offence.

It is apparent that the tests for a domestic and an overseas freezing order differ. The test for the domestic freezing order is that there is a good arguable case that the property is likely to be used for a terrorist offence. No lawyer would regard the court believing that there is a good arguable case that the property is likely to be used for a terrorist offence as having the same meaning as the court considering that the property is likely to be used for a terrorist offence.

The test for the overseas freezing order is therefore more strict. It is not enough to show,


    "that there is a good arguable case",

but that the court considers that,


    "the property is likely to be used"

for terrorist purposes. I therefore believe that the tests for domestic and overseas freezing orders are significantly different. That is curious and needs an explanation.

The difference is more important than that, however. The amendment to Schedule 4 to the Terrorism Act 2000 is intended to give partial effect to the EU framework decision of 2002 on orders freezing property or evidence. That framework decision provides for the mutual recognition of freezing orders if they satisfy certain tests.

To paraphrase Article 2 of the framework decision, one of the grounds on which a domestic or overseas freezing order can be made is that the property to be frozen is property which the competent judicial authority in the issuing state—which would be the UK in the case of a domestic freezing order and a participating country in the case of an overseas freezing order—considers to be a means of an "instrumentality"; the means of carrying out a terrorist offence. The framework decision appears to require the test to be the same both ways.

The test is now directly in line with the formula that is used as a result of the recent amendment for overseas freezing orders. That is plainly a stronger test than that there should be a good arguable case, and the real danger is that if the test for a domestic freezing order is weaker than the test in the framework decision, courts in other participating countries may refuse to enforce domestic freezing orders on the grounds that they may be made in circumstances going beyond those covered by the framework decision and that those decisions are therefore not appropriate for mutual recognition.

That would be a legitimate conclusion for a foreign court to reach and in those circumstances the results would clearly be thoroughly undesirable and contrary to the intention of the framework decision. In my view,

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the formula which has been adopted by Amendments Nos. 100 and 108 for overseas freezing orders should be applied in the same language to domestic freezing orders. I beg to move.

Lord Bassam of Brighton: My Lords, this is an interesting amendment, and I am grateful to the noble Lord for tabling it. We have had the debate in part previously. The noble Lord has explained the issue as clearly as he can, although it is complicated. The amendment would require the court to be satisfied that the property to be frozen was likely to be used for the purposes of a listed offence before it would be able to sign a certificate allowing a freezing order to be transmitted abroad. On the current drafting, the court must only be "satisfied" that there is a good arguable case that the property will be so used, which is a slightly lower balance of proof.

The noble Lord, in proposing the amendment, has argued that it will result in a more accurate transposition of the requirement in Article 2(d) of the framework decision that the issuing court "considers" the property in question to be the proceeds or "instrumentalities" of an offence.

We need to interpret "considers" in the context of the framework decision that is intended to allow freezing orders to be made and transmitted at a relatively early stage of the judicial process. Many EU states, including the UK, freeze assets from the start of a terrorist investigation, and the intention is that these orders should be able to be transmitted abroad.

However, at this early stage of the investigation, it is unlikely that the court will ever have sufficient information of value to be able to say absolutely that the assets are likely to be used for an offence. That is why the test for making a freezing order in this country allows an order to be made at the beginning of an investigation or proceedings provided it appears to the court that the frozen property may be forfeited later in the proceedings.

If "considers" is construed as requiring a "likely" test, this could limit the framework decision to freezing assets at what we would see as a late stage of the judicial process at which forfeiture orders are made. That is because this is the only stage at which such a standard of proof is likely to be met—where all the evidence has perhaps been gathered and all the required information is in place. Such a restriction would detract considerably from the effectiveness of the instrument. I am confident that the noble Lord would not want to do that.

The Government believe, in this context, that the requirement that there be a "good arguable case" that the property in question is likely to be used for a listed offence is a legitimate interpretation of the word "considers". It will allow the framework decision to have its intended effect. This amendment would make it much harder to send freezing orders out of the UK to be enforced, and for that reason we must resist it.

Lord Goodhart: My Lords, I find the noble Lord's answer somewhat peculiar. The framework decision

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plainly uses the word "considers". Therefore, what the noble Lord appears to be saying is that the domestic freezing order—in order to move matters on quickly—will be made in a way that is not authorised by the framework decision, because the court has not got so far as being able to consider whether it is or is not likely that the property will be used for terrorist purposes.

It also means—I have made this point previously but it has not been answered—that the Terrorism Act 2000, as amended by the Bill, will authorise the making of domestic freezing orders on a standard of evidence that is lower than the standard that the Government appear to require for overseas freezing orders. I find both those aspects very strange.

Having considered the position, I now think that what is required is not a provision in the terms of Amendment No. 99, but one which, instead of using the word "satisfied", uses the word "considers"—which would bring the test for domestic freezing orders entirely into line with those for overseas freezing orders.

In the circumstances, I shall not press the amendment. However, I am strongly inclined to come back at Third Reading with a variation on this proposal which would bring the tests for the two different freezing orders into line with each other. I hope that the Government will use the interval to consider the matter. It seems to me that the arguments in favour of bringing the two tests into line are overwhelming. In the light of the government amendments, I believe that the tests for the overseas freezing order are now correct. The same provision should apply to domestic freezing orders. For the reasons I have expressed, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bassam of Brighton moved Amendments Nos. 100 and 101:


    Page 68, line 16, leave out from "Kingdom" to end of line 21 and insert—


"(b) which the appropriate court or authority considers is likely to be used for the purposes of a listed offence or is the proceeds of the commission of such an offence, and
(c) in respect of which an order has been or may be made by a court exercising criminal jurisdiction in the participating country for the forfeiture of the property,"
Page 68, leave out lines 24 to 28 and insert—


"(3) The action which the appropriate court or authority considered would constitute or, as the case may be, constituted the listed offence is action done as an act of terrorism or for the purposes of terrorism."

On Question, amendments agreed to.

7.45 p.m.

Lord Bassam of Brighton moved Amendment No. 102:


    Page 69, leave out lines 14 to 19 and insert "send a copy of the overseas freezing order to the High Court and to the Director of Public Prosecutions."

The noble Lord said: My Lords, these amendments will require incoming freezing orders to be dealt with in the High Court, and not, as the schedule currently

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provides, in any "nominated court". We indicated in Grand Committee that we would bring these amendments forward. I am sure that they will find favour universally in this House.

It is our desire that incoming orders should be dealt with in the High Court, as that body is currently responsible for issuing freezing orders under Schedule 4 to the Terrorism Act and is the only body that will be able to certify a freezing order for transmission abroad under paragraph 11B. These amendments are being introduced to fulfil and satisfy the wishes of your Lordships and to ensure consistency. I beg to move.

On Question, amendment agreed to.


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