Under the Terrorist Asset-Freezing etc. Act 2010 (the Act), the Treasury is required to report quarterly to Parliament on the operation of the UK’s asset-freezing regime mandated by UN Security Council Resolution 1373.
This is the second report under the Act and it covers the period from 1 April 2011 to 30 June 20111.
This report also covers the operation of the UN al-Qaeda and Taliban asset-freezing regime.
As of 30 June 2011, a total of just under £230,0002 of funds were held frozen in the UK. This covers funds frozen under the UK’s domestic terrorist asset-freezing regime, mandated by UN Security Council Resolution 1373, and also funds frozen under the UN al-Qaeda and Taliban asset-freezing regime, mandated by UN Security Council Resolution 1267.
(1) UK’s domestic terrorist asset freezing regime under the Terrorist Asset-Freezing etc. Act 2010
As of 30 June 2011, a total of 85 accounts containing just over £120,000 were frozen in the UK under the domestic terrorist asset-freezing regime. No new accounts were frozen during the quarter.
Operation of the Terrorist Asset-Freezing etc. Act 2010
Asset-freezing designations and reviews
In the period 1 April 2011 to 30 June 2011, the Treasury made no new designations under the Act and did not conduct any reviews of existing designations.
Licensing
Maintaining a fair and effective licensing system is crucial to ensuring the overall proportionality of the asset-freezing regime, whether the individuals concerned are subject to an asset-freeze in accordance with a UN or EU listing, or domestic designation. A licensing framework is put in place for each person in the UK on a case-by-case basis. The key objective of the licensing system is to strike an appropriate balance between minimising the risk of diversion of funds to terrorism and implementing asset-freezes in a proportionate way. Licences contain appropriate controls to protect against the risk of the diversion of funds for terrorist finance.
A total of four licences were issued this quarter under the Act in relation to three persons subject to an asset-freeze.
In addition to issuing licences relating to a specific person, the Treasury may also issue general licences, which apply to all persons designated under a particular regime or regimes. Licences are granted where there is a legitimate need for such transactions to proceed and where they can proceed without giving rise to any risk of terrorist finance.
No general licences were issued this quarter under the Act.
Legal Challenges
Two legal challenges against designations made under both the Terrorism (United Nations Measures) Order 2009 and the Act were ongoing in the quarter under review.
(2) UN al-Qaeda and Taliban asset-freezing regime
The UN al-Qaeda and Taliban asset-freezing regime, established under UNSCR 1267, is implemented in the UK by Council Regulation (EC) No 881/2002. Enforcement measures are provided for in the UK’s al-Qaeda and Taliban (Asset-Freezing) Regulations 2010.
In June, the UN adopted resolutions 1988 and 1989 which split the UNSCR 1267 al-Qaeda and Taliban regime into two separate regimes. The UN also introduced welcome new due process reforms including strengthening the role of the ombudsperson and enhancing arrangements for reviewing designations.
This quarterly report covers the combined al-Qaeda and Taliban 1267 regime. Future reports will cover the operation in the UK of the 1989 al-Qaeda regime and the 1373 regime only, as the Taliban regime will be taken forward on a basis similar to other country sanctions.
As of 30 June 2011, a total of 84 accounts containing just under £110,0003 were frozen in the UK under the al-Qaeda and Taliban asset-freezing regime.
Designations
During this quarter, the EU added three people to the list in annex I to Council Regulation (EC) No 881/2002.
Six people were delisted during the quarter, none of whom had UK connections.
Licences
Seven individual licences were issued in this quarter in relation to three persons subject to an asset-freeze under the al-Qaeda and Taliban asset-freezing regime. One of these licences was revoked.
(3) Proceedings
In the quarter to 30 June 2011, no proceedings were initiated in respect of breaches of the prohibitions of the Act or the al-Qaeda and Taliban (Asset-Freezing) Regulations.
1The detail that can be provided to the House on a quarterly basis is subject to the need to avoid the identification, directly or indirectly, of personal or operationally sensitive information.
2This figure reflects the most updated account balances available and includes approximately $64,000 of suspected terrorist funds frozen in the UK. This has been converted using exchange rates as of 05/07/11.
3Includes approximately $64,000 of suspected terrorist funds in the UK.