Terrorist Asset-Freezing etc. Bill [HL]

My Lords, there is an ever shifting frontier between the activity of terrorists and that of serious and organised criminals, as the example of Northern Ireland has shown us over the decades. To believe otherwise is to engage in delusional thinking on stilts. That said, it is impossible to be comprehensive all the time about every threat related to terrorism and serious crime. It is important from time to time to be highly targeted, as this welcome Bill introduced by my noble friend the Commercial Secretary seeks to be in concentrating on meeting our international obligations to freeze terrorist funds ever more effectively. Doing this will always be a challenge, however good the legislation, as the sad experience of the Serious Organised Crime Agency has shown us so starkly, with its £0.5 billion annual budget up to 2010 managing to deny access to only approximately £140 million of criminal funds. The Home Secretary, who had a hard-driving tutor when she was at Oxford, is therefore quite right, following her radical, root-and-branch review, to bring this expensive organisation to an end with the setting-up, as she proposes, of the national crime agency. I hope that it will rapidly learn the lessons of the Serious Organised Crime Agency, just as much as they will be pondered by others responsible under this legislation, whether in the Treasury or elsewhere, as they deal with the challenging practical problems of the efficient asset freezing of terrorist funds. It is vital that any strategy includes targeted intelligence gathering, law enforcement action at home, much smarter global regulatory scrutiny, capacity building for other Governments, the protection of charities from terrorist abuse and much more besides. There is an array of actions to be taken. They include, for example, the breaking of pipelines through which parties move money and manage to operate in mainstream financial sectors, or the exposing of terrorist-financing money trails that lead to hitherto unknown terrorist cells or terrorist financiers before any freezing can be contemplated. Success in these two strands may force terrorists to use more costly and much more dangerous informal means of terrorist financing such as illicit, trade-based commodity systems, ranging from the obvious, such as diamonds, precious metals, narcotics and cigarettes, through to the less obvious, such as trade in honey or even in rare plants. Fast coming down the track to join these are various forms of cyberterrorism, whose mirror image is cyberfundraising through recruiting of financial supporters. Just as cyberweapons are so much easier to procure—they are more like chemical weapons by comparison to other more general military hardware, let alone nuclear materials—so cyberfundraising is often much easier to achieve and harder to track than the smuggling of the goods and commodities to which I referred. When in opposition, Members on this side of the House again and again pressed noble Lords such as the noble Lord, Lord West of Spithead, who is not in his place today, to tackle issues such as the performance of the Serious Organised Crime Agency and the threat of cyberterrorism. It was all, alas, to scant avail, as we have seen. By comparison, I greatly applaud the work and effectiveness of the 31-nation Financial Action Task Force, an organisation to which I think my noble friend has made a considerable contribution in the past, together with other organisations whose names we do not often hear aired in your Lordships’ Chamber, such as the Egmont Group, representing about 70 financial intelligence units in the different countries that are members. Only a part of its activity may involve work to disturb channels along which terrorist funds may travel or to aid the seizure of assets, but it is vital among the rest of its work in respect of money-laundering generally. All that said, I have theoretical sympathy—if one can have theoretical sympathy; looking around the Chamber, I do not see any philosophical tendency on the part of your Lordships to help me with whether I can have theoretical sympathy—with the view of the Select Committee on the Constitution that we should always strive to ensure legal certainty, which is a pretty soundly based principle. The Constitution Committee favours all terrorist asset-freezing measures being in one statute because, if this Bill becomes law, as I hope it will, we shall have a dual regime between the new Act on the one hand and the al-Qaeda and Taliban asset-freezing regulations on the other. This aim to consolidate would be desirable in the longer term, exactly as the noble Lord, Lord Pannick, said in his speech a few moments ago, but we need to get on with tackling the issue as soon as possible through the Bill, as my noble friend Lord Sassoon pointed out. I end with three more detailed points that verge on questions, which I table now and on which I seek reassurances from my noble friend if he has time at the end of his winding-up speech. First, I assume that Part 1 of the Bill will be extended to the Channel Islands and the Isle of Man by Orders in Council at the earliest possible opportunity, for all the obvious reasons. If that is not the intention, I think that it should be and I wish to know why it is not. Secondly, Clause 20 lays a duty on the Treasury to co-operate with any investigation into these matters in the United Kingdom—with, I guess at the moment, organisations such as the Serious Organised Crime Agency or its successors—and internationally. However, I seek reassurance that the Treasury has the staffing capacity to co-operate effectively with the other agencies in asset freezing and, in so doing, to put living enforcement and investigatory flesh on the well drafted bones of this Bill. Thirdly and lastly, Part 2 of the Bill is intended, as I understand it, to deal with financial restrictions on persons connected with countries of concern, specifically in connection with the development or production of the nuclear, radiological, biological or chemical weapons specified in Schedule 7 to the Counter-Terrorism Act 2008. That Act, when it was just a little Bill and was being drafted, did not take any formal notice of cyberwarfare, cyberterrorism, cyberfundraising or whatever you want to call them—threats that, back in 2006 and 2007, were just gathering the momentum that they are now reaching. Perhaps that is why paragraph 1(4)(a) in Part 1 of Schedule 7 to the Counter-Terrorism Act 2008 specifies all the weapons that I have just listed but does not specify cyberweapons of any sort. It should have done so and I hope that this legislative opportunity will be taken, whether under the ““etc.”” cover or some other cover, to improve the legislation to embrace the cyberthreat specifically. There are a number of other questions that I would like to ask, but I sense around me a gathering wish and anticipation rather to hear the maiden speech of the noble Baroness, Lady Hughes of Stretford, which I share.