Considered in Grand Committee
That the Grand Committee do consider the Criminal Justice (Electronic Commerce) (Amendment) (EU Exit) Regulations 2021.
My Lords, this is a technical instrument concerning EU jurisdictional rules. I make it clear at the outset that these regulations do not create new policy nor change the nature of the related offences; they are merely measures to fix failures of retained EU law arising from the withdrawal of the UK from the European Union. If time had allowed, the Government would have brought forward this regulation before the end of the transition period. However, as we are not aware that the rules in question have ever been relevant to a prosecution for the offences that this instrument relates to, we prioritised other, more urgent, legislation. Now that such other more important legislation is in force, it is necessary that we address any remaining deficiencies in retained EU law.
This instrument concerns an internal market measure contained in article 3 of the EU’s e-commerce directive. Although that directive is largely being retained in UK law, a key aspect of the directive is the country of origin principle, which establishes jurisdictional rules that operate across the EEA. Following the end of the transition period, these rules, which rely on reciprocal application between the EEA states, no longer operate as intended. The removal of the country of origin principle from legislation under the responsibility of my department is, therefore, the objective of this draft instrument.
The rules contained in the country of origin principle here apply to online activities which meet the definition of information society services, known as ISS, which can be understood as a service offered for payment, at a distance, by electronic means, and at the request of the recipient of that service. ISS could provide services such as online retailers, video sharing sites, search tools, social media platforms and internet service providers. Because of their reciprocal nature, these rules aimed to make it easier for organisations to operate online across borders. They did this by making ISS operating in more than one European Economic Area state subject only to the law of their home country unless certain conditions were met. This meant that, for relevant offences, ISS needed to comply with only one set of laws, those of the home state, rather than those of each state they operate in, thereby reducing the regulatory burden.
The implementation of these rules in connection with this statutory instrument has two strands. First, it creates a procedural bar, restricting prosecutions of ISS based in the EEA for their conduct in another EEA country; the procedural bar is based on the proposition that the ISS could have been prosecuted by the state in which they were established—that is, the home state. Secondly, it makes ISS based in one EEA state subject to the law of that state for their conduct across the EEA. This instrument fully removes the UK’s implementation of both aspects of the retained rules from legislation for which the Ministry of Justice has responsibility. As a consequence, UK ISS operating in the EEA will be subject to UK law only to the same extent as they would be when operating in other foreign countries. There will be no distinction between operating in an EEA state and operating in any other foreign state. It also means there will no longer be a procedural bar restricting prosecutions of EEA-based ISS operating in the UK, meaning that proceedings against an ISS based in an EEA state would operate in the same way as proceedings against an ISS based in any other foreign state or a domestic ISS.
The key points here are three, and those I made when I first rose—using that term somewhat loosely in this Room. First, we are unaware of any prosecutions of ISS for the offences this instrument amends, let alone any cases to which these jurisdictional rules have applied, so the direct impact of this instrument is low. Secondly, these exit-related deficiencies need to be resolved, because the rules were based on reciprocity which no longer exists and, if left unresolved they could, in future, place UK businesses at a disadvantage. Thirdly, the approach taken in this instrument is not only a suitable method of dealing with this issue but, I suggest, the only method of addressing these deficiencies. For those reasons, I urge the Committee to join me in supporting this instrument and beg to move.
My Lords, I heartily support the Motion. Information society services that operated from within the EEA were subject only to the law in their place of origin, as the Minister has explained. When we left the EEA, this could no longer apply, and the provisions for implementation of this system inserted into our law could no longer apply. This seems simple to deal with, and this statutory instrument just deletes them from our law. If a society has its origin in a devolved Administration, it is the law there that requires the deletion.
This was originally put forward as a statutory instrument with no need for approval, but the committee raised some questions that seemed to suggest it should be altered. Therefore, we have this before us today with rather a short consideration, I believe.
It has been suggested that a new provision is required to make services established here subject to remote control here, but I cannot see that that is appropriate. While the previous system operated, it did not affect non-EEA countries. This instrument leaves that as it was and puts EEA countries in the same position as those leaving the EEA, which makes our relationship with EEA countries the same as with others. Therefore, all we have to do is leave it alone. I can see there is room to consider harmonising policies on these matters across the world, but this statutory instrument—or statutory instruments generally under this power—are not appropriate for that.
My Lords, I thank the noble Lord, Lord Wolfson of Tredegar, for his introduction. The Explanatory Memorandum could have done with illustrative examples to clarify the new position following the implementation of these regulations. I support the committee in insisting that this instrument had a hearing.
As I understand it, the e-commerce directive applied to companies engaged in internet trading, search tools, social media platforms and the like. A trader based in this country trading online in the EEA could be criminally liable under the laws of this country only, and would not have to comply with the criminal law of any EEA state in which he was trading. The strength of the country of origin principle, “the CoOP”, was that it was reciprocal; other countries dealt with traders operating within their jurisdiction similarly.
However, since the end of the transition, UK internet traders or social media platforms have had to adhere to the laws of each EEA country in which they operate. Equally, EEA traders can be prosecuted if they do not comply, when operating in the UK, with our criminal law. Perhaps the Minister can confirm that a UK trader now must have regard to the criminal law in each EEA country in which he operates, but will not be liable in this country for offences committed abroad, because the courts of this country will have no extraterritorial jurisdiction to prosecute here for such offences. If, therefore, a trader wishes to advertise his wares on the internet in, say, Belgium, Denmark or Germany, he will have to ensure that his advertisements or the products he is selling comply with the criminal laws of each country.
Take pornographic material, for example. If a trader in London publishes obscene material in EEA countries, he can be prosecuted there but no longer in the UK. He can be prosecuted by the appropriate prosecuting authorities in those countries but, unless the material is published in the UK as well, no prosecution is possible here.
Does it then follow that such a trader can sit in London and purvey his material in EU or EEA countries, safe in the knowledge that, in the absence of the European arrest warrant, it would be extremely difficult to extradite him to Belgium, Denmark or Germany, where the offence is committed? The converse is that, if a European trader publishes obscene material in this country, he can be prosecuted in UK courts if we can get hold of him. Absent the European arrest warrant, that is likely to be difficult.
The Explanatory Memorandum says:
“Removal of the CoOp”—
the reciprocal arrangements—
“will only bring regulation of UK ISS operating in the EEA in line with their operation in other foreign countries, and does not affect our ability to prosecute UK nationals or residents who commit offences outside the UK”—
this final section is underlined—
“where our courts have jurisdiction to do so.”
The Minister will know how limited extraterritorial jurisdiction is in this country: for murder, manslaughter in certain circumstances, sexual offences against persons under the age of 18, forced marriage and female genital mutilation—a short list. We are about to consider legislation which implements the Istanbul convention—ironically, the convention promoted by more Europeans than the Council of Europe—on preventing and combating violence against women and domestic violence. The fact sheet published by the Home Office last month indicates the extent of the proposed extension of extraterritorial jurisdiction. It does not include publicly publishing obscene materials or fraud.
Personally, I am sick to death of scams from abroad, sometimes from west African countries, which force every one of us to set up barriers on the internet, email and telephones. I hate the idea that persons could set up in this country to defraud people on the continent or flood their markets with pornography. Would it not be simpler if, rather than drawing up our skirts to avoid contamination by the EU or the EEA on every occasion, we now negotiated to enter into a new reciprocal agreement? As I see it, these regulations are a necessary consequence of Brexit, but creating a platform for criminals to defraud European citizens is in no way desirable. I await to see whether I have misunderstood the whole purpose of these regulations.
My Lords, we in the Labour Party accept that this instrument is necessary to address the current lopsided arrangements following the end of the transition period of the UK leaving the EU. The Explanatory Memorandum states:
“Its purpose is to address failures in retained EU law to operate effectively and other deficiencies arising from the withdrawal of the UK from the EU by amending the domestic legislation which implements a reciprocal arrangement known as the ‘Country of Origin principle’”.
The instrument amends primary legislation, and the changes made to each Act have substantially the same effect. In respect of domestic information society service providers, they remove liability under UK law for offences committed in EEA states, as well as the ability to prosecute those offences in the UK. In respect of EEA-based information society service providers, they remove the restriction on bringing prosecutions in the UK for offences committed in the UK.
The European Statutory Instruments Committee has expressed concern that
“the effect of this instrument could be to dilute regulation of the international effect of publication of certain kinds of material (particularly online material with global reach) as it is not clear whether equivalent offences exist across the EEA. We therefore requested further information from the Department on this question. The Department’s response … states that it has not carried out a thorough review and is therefore not in a position to explain the extent of any dilution of international regulation. Given the serious nature of the offences covered by the instrument, and the ambiguity surrounding parallel offences in other EEA countries, the Committee believes that this issue is of sufficient political importance to justify the scrutiny and debate afforded by affirmative resolution.”
I have read the response to the points raised by the committee in certain paragraphs of the Government’s Explanatory Memorandum and listened to Minister Chalk’s response to my honourable friend Alex Cunningham when he raised these points in yesterday’s debate in the House of Commons, so I will not ask the Minister to repeat the points made yesterday.
However, given the sensitivity of the various acts to which this instrument applies and the wider context of the substantial legislation we are expecting, in the form of the online harms Bill, for example, can the Minister say something about how he sees international legislative co-operation developing to combat international crime and exploitation? I note that the noble Lord, Lord Thomas, essentially asked the same question about future reciprocal agreements, and I also note that the noble and learned Lord, Lord Mackay of Clashfern, asked about harmonisation of policies. It is a much wider question than the narrow but important remit of this SI, but I think that all Members participating in this debate would be interested in the answer to it.
My Lords, sometimes a debate is short but it sets up some interesting points, and this is one of them.
First, I thank my noble and learned friend Lord Mackay of Clashfern for his comments. He makes an important point that this instrument essentially means that an ISS will be treated the same way under our law, irrespective of where they are based, for their conduct here. Now that we have left the EU, maintaining different and indeed preferential treatment for EEA-based ISS would be inappropriate. That theme runs through a number of the points which we have debated this afternoon.
Given the time limits I have, I will not say anything more about the sifting committee recommending that we have an affirmative procedure this afternoon; we have set that position out in writing.
I can confirm that the noble Lord, Lord Thomas of Gresford, has not, as he put it, misunderstood the whole purpose of the SI. I take his point that an Explanatory Note might sometimes be more useful if it has worked examples. However, the problem with a worked example is that, if you do not cover every example, the danger is that the Explanatory Note could prove to be more misleading. The noble Lord highlighted that, since the end of the transition period, ISS have been liable to the laws of each country in which they operate. These changes mean that they will no longer also be liable in the UK, thus removing dual liability.
The noble Lord described a theoretical scenario, but I have to say that his concerns about bringing foreign offenders to justice in the context of cross-border offences was really the focus of his comment. This instrument specifically addresses reciprocal jurisdictional rules. On the wider point he makes, it is fair to say that those rules were never intended to contribute to the wider regulation of the publication of illicit materials internationally. They apply only to organisations meeting the definition of ISS, which is a limited definition, and only to activity in the EEA. The purpose was a much narrower one, simply to make it easier for such organisations to operate in multiple countries by simplifying the legal and regulatory framework which applied to them. Therefore, while in theory the co-operation agreement made it possible to prosecute UK-based ISS, and in some cases individuals, for conduct that occurs in EEA states, in practice, as I said in opening, we are not aware of any such prosecutions.
Generally, to meet the noble Lord’s point head on, the Government’s view is that criminal offending is best dealt with by the criminal justice system of the state where the offence took place. In any event, leaving in place rules that flow from EU reciprocal arrangements that no longer apply to the UK, and which are limited to UK ISS operating in EEA states, would not be an effective approach to address the concerns the noble Lord identified. Where we have extraterritorial jurisdiction, that is always on the basis that we look at all countries in the world on the same basis, and we do not distinguish between EEA states and other foreign states. Ultimately, therefore, this instrument means that we will treat EEA countries in the same way as any other foreign country. Now that we have left the EU, I suggest that that is entirely appropriate.
Towards the end of his comments, the noble Lord, Lord Thomas, said that he was
“sick to death of scams from abroad”.
For the briefest of moments, I thought the noble Lord had converted to the hardest of hard Brexiteers, but then he referred to west Africa and I realised he was making a different point. But that point underlines the philosophy that underpins this statutory instrument. Whether the scam comes—so to speak—from west Africa, from an ISS in the EEA or from anywhere else, we have left the EU and will therefore treat all foreign countries in the same way. That is generally consistent with the way we approach extraterritorial criminal jurisdiction in this country.
I turn last to the noble Lord, Lord Ponsonby of Shulbrede, who referred to the “current lopsided arrangements”. If I may say, with respect, that is absolutely right. That is why we need this statutory instrument, as we have a lopsided position without it now that we have left the EU. I am grateful that he did not ask me to repeat the answers given in another place yesterday, but I will turn to the particular question he asked me on how I see international legislative co-operation developing to combat international crime and exploitation.
The noble Lord raised the important issue of protecting the vulnerable from exploitation online, which is something that the Government fully agree and sympathise with. This is a challenging problem, not least because the underlying technology is constantly changing. It therefore needs to be tackled both by working with our international partners and through updating our domestic legislation. We have previously indicated that we intend to bring forward a draft Bill to address online harms and make the UK the safest place in the world to be online, setting the global standard for safety online, with the most comprehensive approach yet to online regulation.
I said a few words about this when I opened the relevant day of the debate on the humble Address to Her Majesty the Queen. The draft Bill will include placing a duty of care on companies to improve the safety of their users online. It will require major platforms to set out clearly, in their terms and conditions, what legal content is unacceptable on their platform and to enforce those conditions, consistently and transparently. It will require platforms to have effective and accessible user-reporting and redress mechanisms. I know that people often complain about that: when you see something online that you want to complain about or refer to the online platform, it is often very difficult to do so. It will designate Ofcom as the independent online safety regulator and give it the power to levy very large fines indeed. It will also boost public resilience to disinformation through media literacy and supporting research on misinformation and disinformation. The last is something that, in our modern society, is becoming increasingly important.
I hope the Committee will forgive me if I do not say too much more about that prospective legislation, because I would be straying a little too far from the direct subject of the SI. Coming back to that, it is of limited but focused application, as I have said, and I commend it to the Committee.
That completes the business of the Grand Committee this afternoon. I remind Members to sanitise their desks and chairs before leaving the Room.
Committee adjourned at 4.39 pm.