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Terrorism: Finance

Volume 718: debated on Tuesday 6 April 2010

Statement

My honourable friend the Exchequer Secretary has made the following Written Ministerial Statement.

In a Written Ministerial Statement on 10 October 2006, the then Economic Secretary undertook to report to Parliament on a quarterly basis on the operation of the UK’s counterterrorism asset-freezing regime. This is the 14th of these reports and covers the period January to March 2010.1

Asset-freezing designations

In the quarter January to March 2010, the Treasury issued no directions designating persons under the Al-Qaida and Taliban (United Nations Measures) Order 2006. As a result of the quashing of this order, the one extant direction under the order has no effect.

During this quarter, the Treasury gave no new directions under the Terrorism (United Nations Measures) Order 2009.

There were no financial sanctions designations of persons with links to the UK made at the UN or at the EU in relation to the terrorism or Al-Qaeda and the Taliban asset-freezing regimes.

As of 31 March 2010, a total of 226 accounts containing just over £370,0002 of suspected terrorist funds were frozen in the UK.

Reviews under the Terrorism Order 2006

The Treasury keeps domestic asset-freezing cases under review and completed three reviews in this quarter. All three persons had their designation revoked.

Licensing

Maintaining an effective licensing system is important to ensure the overall proportionality and fairness of the asset-freezing regime, whether the individuals concerned are subject to an asset freeze in accordance with a UN or EC listing, or domestic terrorism legislation. A licensing framework is put in place for each individual 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 meeting the human rights and humanitarian needs of affected individuals and their families.

Twenty-four licences were issued this quarter in relation to 15 individuals and/or entities subject to an asset freeze under the Al-Qaeda and Taliban and terrorism regimes.

Proceedings

On 9 February 2010, during the debate on the Terrorist Asset-Freezing (Temporary Provisions) Bill, the Treasury committed to reporting on proceedings taken for any offences under the asset-freezing regime.

In the quarter January to March 2010, there have been no proceedings taken for breaches of the prohibitions of the Terrorism Orders or the Al-Qaida and Taliban Order.

Developments

The Supreme Court judgment and the Terrorist Asset-Freezing (Temporary Provisions) Act 2010: As referred to in the 13th quarterly report to Parliament for the period October to December 2009, on 4 February 2010 the Supreme Court quashed the Terrorism (United Nations Measures) Order 2006. The Government fast-tracked temporary legislation to prevent suspected terrorists’ assets from being unfrozen. The Terrorist Asset-Freezing (Temporary Provisions) Act 2010 came into force on 10 February 2010 and temporarily validates the Terrorism (United Nations Measures) Orders 2009, 2006 and 2001, ensuring that asset freezes under those orders remain in place. The Act expires on 31 December 2010. Before then, the Government intend to introduce more permanent legislation that will establish the terrorist asset-freezing regime in primary legislation. A draft of the legislation, the Terrorist Asset-Freezing Bill, was published on 5 February 2010. The Bill can be found at http://www.hm-treasury.gov.uk/fin_sanctions_terrorist_assetfreezingbill.htm.

On 11 March 2010, the Government published a public consultation document which sets out the Government’s approach to terrorist asset freezing and their proposals for more permanent terrorist asset-freezing legislation and seeks the views of the public and other interested parties on the proposals. The consultation document can be found at http://www.hm-treasury.gov.uk/consult_liveindex.htm.

Al Qaida and Taliban (Asset Freezing) Regulations 2010: On 4 February 2010, the Supreme Court also quashed the Al-Qaida and Taliban Order. Assets previously frozen under that order remain frozen under EC Regulation 881/2002. The EC regulation is directly applicable in UK law, but secondary legislation is required to provide for penalties for failing to comply with the prohibitions in the EC regulation and to establish a UK framework for the effective administration of asset freezes against persons listed by the EU as being associated with Al-Qaeda or the Taliban.

In order to put in place penalties and establish such a framework, the Government laid new regulations before Parliament: the Al-Qaida and Taliban (Asset Freezing) Regulations 2010.

The regulations were laid on 25 February 2010 and debated in the House of Lords on 25 March and in the House of Commons on 30 March. They came into effect at midnight on 31 March.

1 The 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.

2 This figure reflects account balances at time of freezing and includes approximately $58,000 of suspected terrorist funds frozen in the UK. This has been converted using exchange rates as of 30/03/10. Future fluctuations in the exchange rate may impact on the contribution this sum makes to future totals of suspected terrorist funds frozen.