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Terrorism Act 2000 (Code of Practice for Authorised Officers) Order 2024

Volume 837: debated on Monday 18 March 2024

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Terrorism Act 2000 (Code of Practice for Authorised Officers) Order 2024.

Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee

My Lords, in addition to the draft Terrorism Act 2000 (Code of Practice for Authorised Officers) Order 2024, I shall speak to the following three draft statutory instruments: the Proceeds of Crime Act 2002 (Search, Recovery of Cryptoassets and Investigations: Codes of Practice) Regulations 2024; the Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors: Code of Practice) Order 2024; and the Proceeds of Crime Act 2002 and Terrorism Act 2000 (Certain Information Orders: Code of Practice) Regulations 2024.

Before I address the contents of these SIs, I will give some background. The Government are firmly committed to tackling all forms of economic crime. We already undertook unprecedented action to prevent kleptocrats and organised criminals abusing our open economy when we expedited the passage of the economic crime Act through Parliament in 2022. The Home Office measures in that Act reformed the unexplained wealth orders regime to improve transparency of ownership structures and to allow more time for law enforcement to review material relating to unexplained wealth orders.

Building on that Act, the Economic Crime and Corporate Transparency Act 2023 contains a wide range of reforms both to the Proceeds of Crime Act 2002 and to terrorist financing legislation through the Anti-terrorism, Crime and Security Act 2001 and the Terrorism Act 2000. These reforms include: powers to allow the effective seizure of both criminal and terrorist crypto assets; reforms to enable targeted information sharing to tackle money laundering and remove reporting burdens on businesses; new intelligence gathering powers for law enforcement; and provisions to reform outdated criminal corporate liability laws.

The reforms to the unexplained wealth orders regime and corporate liability laws and reforms to enable targeted information sharing and reduce reporting burdens are already in force. The new offence of failure to prevent fraud will be brought into force once government guidance has been published and businesses have familiarised themselves with it. We intend to publish the guidance shortly. Most of the remaining Home Office measures will be commenced on 26 April 2024.

Today, we will debate the statutory instruments that underpin the codes of practice for those measures. Therefore, with respect, I do not intend to cover the powers themselves, as they were debated extensively in both Houses during the passage of the Act.

Four draft affirmative instruments, including one laid by the Attorney-General’s Office, are required to update six codes of practice. Four existing codes of practice are being revised and two new ones are being made. This includes a search, seizure and detention of property code, issued by the Home Secretary to guide the exercise of search and seizure powers in the context of criminal confiscation investigations for officers operating in England and Wales. It also includes two codes to guide the exercise of search and seizure powers. One is issued under the Proceeds of Crime Act 2002 and the other is issued under the Terrorism Act 2000, in relation to powers in the Anti-terrorism, Crime and Security Act 2001. These codes are to guide law enforcement in the use of these powers for civil forfeiture and counterterrorism investigations. These codes are also issued by the Home Secretary. It also includes two codes to guide the exercise of powers to investigate suspected criminal property. One code is issued by the Home Secretary and an equivalent code for prosecutors is issued by the Attorney-General for England and Wales and the Advocate-General for Northern Ireland. The final code being introduced by these draft instruments is a new code to guide National Crime Agency officers on the appropriate use of new information order powers. This code is issued by the Home Secretary under both the Proceeds of Crime Act 2002 and the Terrorism Act 2000.

The codes clarify the circumstances in which the powers may be exercised to ensure that they are applied consistently. This is of vital importance given the broad range of law enforcement agencies to which the powers apply. The use of the powers in these codes of practice may impact upon individuals’ rights and should therefore be proportionate to the outcome sought. Guidance on the exercise of the powers in these codes is required to safeguard against improper use.

The Proceeds of Crime Act 2002 and the Terrorism Act 2000 mandate that the Secretary of State must publish a draft code, consider any representations made and modify the draft in the light of such representations, prior to laying revised codes. The draft codes we are debating were therefore subject to separate public consultations. Information on the consultations can be found in the Explanatory Memoranda that accompany these statutory instruments.

In conclusion, these four draft instruments are required to deliver on the Government’s objective to complete commencement of the 2022 and 2023 Acts. This will ensure that all necessary legislation is in place and that there is legal certainty for the judiciary, respondents and the legal profession as to how cases will be dealt with before the courts. I beg to move.

My Lords, I thank the noble Lord for his helpful introduction to these detailed and important SIs. He is right to highlight the importance of tackling economic crime, which is something that we all believe we could and should be doing more about.

The four SIs that we are discussing this afternoon follow on from the Economic Crime and Corporate Transparency Act and the previous Act, the Economic Crime (Transparency and Enforcement) Act. As the noble Lord pointed out, there are six new or revised codes of practice on how various authorities use their powers when tackling money laundering and terrorist financing. Consultation on these changes took place last summer. I have a number of questions, which I hope the noble Lord can answer for us.

Given that the consultation on these changes took place last summer, why is it only now that the changes are being implemented, some nine months later? Given that, for some of these instruments, the consultation took place before the Economic Crime and Corporate Transparency Act was passed, will further changes be required?

The Economic Crime (Transparency and Enforcement) Act, which gained Royal Assent over two years ago, and the Economic Crime and Corporate Transparency Act left a significant number of changes to be made through secondary legislation. The noble Lord may have mentioned this, but what is the timetable for implementing all these various changes? There were many provisions in the primary legislation that referred to secondary legislation that would be forthcoming in due course, but what does that actually mean? When can we expect all of that, given—and the noble Lord talked about the importance of tackling economic crime—we need the supporting secondary legislation to be passed as soon as possible?

The Economic Crime and Corporate Transparency Act spans several departments. How is the Home Office working with other departments, such as the Department for Business and Trade, to bring about the effective implementation of these changes?

Can the noble Lord outline for us what assessment will be made of how the Government believe these two Acts are working in practice, and what further steps, if any, need to be taken to combat economic crime?

In reading the various codes of practice, I noticed that they refer to different law enforcement agencies. How is their activity to be co-ordinated? We have the National Crime Agency, the City of London Police as the lead for economic crime, and then we have the individual police forces. How will all that work be co-ordinated, so that it is as effective as we would all want it to be?

The Minister mentioned the impact that we hope to have on Russia-related economic crime, but what else needs to be done, given the impact that we hope economic sanctions have on Russia, particularly with respect to the conflict in Ukraine?

When I raised the issue of enforcement in respect of economic crime, I should have asked what the Government are doing to monitor the effectiveness of the Act. Have they ensured that the consultation outcomes are easily accessible from the consultation web page, as recommended by the Secondary Legislation Scrutiny Committee? I did not find it the easiest consultation response to access, and clearly the Secondary Legislation Scrutiny Committee also had some trouble, so can the Minister say anything more about that?

Is there any oversight of the use of these powers? I understand that, with respect to the terrorism codes of practice, it is presumably the Independent Reviewer of Terrorism Legislation. Can the Minister confirm that and say whether there is any other oversight of these particular powers?

Can the Minister explain the differences in the proceeds of crime statutory instruments and their different application to the nations of the UK? The Minister will know that that is a favourite topic of mine, but I am not trying to be awkward. Clearly, for the territorial extent of the terrorism codes of practice before us, that is relatively easy because the application of those powers is UK-wide. But, on the other territorial application, some parts of the statutory instrument related to England and Wales, while other parts related to England, Wales and Northern Ireland. Can the Minister give a general explanation for all that, particularly, as always, with respect to Scotland? If it is devolved and a matter for the Scottish Government—I suspect that will be the Minister’s answer—how will we ensure that the work that Scottish law enforcement does with the other law enforcement bodies across the rest of the UK has the co-ordinated effectiveness that we want?

We of course support the moves that the Government are making. We all believe that economic crime needs to be more effectively tackled, which is why we supported the various provisions contained in the primary legislation. I look forward to the Minister’s responses to my questions because, as I say, we want this to be effective and we want economic crime to be tackled in a better way than perhaps it is presently.

My Lords, I am grateful to the noble Lord, Lord Coaker, for his support. Although it is literally a debate between him and me, he obviously made a good, thoughtful and insightful contribution, as expected. I do not wish to go back through the points I made in my opening, but I will seek to address a number of the noble Lord’s questions. I am afraid I do not have answers to some of them at this moment, but I will answer as many as I can, although I will not be able to do justice to a number of them. I assure the noble Lord that I will write to him on those. I will address his questions in no particular order.

On the timing from when the Act received Royal Assent through to this stage, the noble Lord will know that, in this case, the consultation had to be carried out on the codes, and consideration had to be given before the codes could be finalised and laid before the House.

These statutory instruments are subject to the affirmative procedure, which obviously requires the relevant committees to go through them. If they are approved by Parliament, the intention is, as I think I said at the beginning, they will come into force on 26 April 2024.

On liaison with agencies, my understanding is that the department has consulted the agencies in this process. We have a very good working relationship, and we will continue to do all we can to work with them going forward.

On the devolved issues, the noble Lord has also asked about this on other unassociated matters. I will try to set out the interface between how these codes work and the devolved nations of the UK. First, the code relating to confiscation will apply to England and Wales only. Each UK jurisdiction has its own confiscation regime. Confiscation is linked to criminal justice and sentencing. Northern Ireland will bring its own confiscation reforms into force at a later date.

Secondly, the code for civil forfeiture applies to the whole of the UK. Scotland and Northern Ireland gave consent for the changes in the Act to apply in those nations. The independent Rules Council in Scotland is determining whether amended Scottish court rules will be required prior to those measures in the Act coming fully into force in Scotland. The UK Government will then commence those measures fully for Scotland.

Thirdly, the two codes relating to investigations will apply to England and Wales and Northern Ireland. Scotland has separate powers in the same Act.

Finally, the codes relating to terrorist crypto assets and to information orders will apply to the whole of the UK as, as the noble Lord will know, counterterrorism and anti-money laundering are matters of reserved competence for the UK. I appreciate that response is lengthy, but I hope it covers the different angles of how the regulations apply.

There was a question relating to Russia. While I do not have specifics about what we are doing in tackling that, obviously some of its origins come from what happened from the conflict in Ukraine. The noble Lord is absolutely right that we are acutely aware that many of these assets are internationally held and could be outside the UK.

I want to set out some of the other work that we are doing internationally. The Act contains measures to include and cover as many entities as possible where there is a link to the United Kingdom. That includes provisions about requests for assistance in relation to crypto assets. This allows law enforcement to detain crypto assets for a period while investigations are ongoing. In addition, the new information order powers will ensure that the capabilities of the UK Financial Intelligence Unit within the NCA are up to international standards and increase our ability to support requests from partners to prevent illicit funds entering our economy. We recognise the need always to be vigilant. That requires cross-border working, which is why we are firmly committed to working with many of our international partners, utilising our approach and sharing and co-ordinating learning as much as possible.

In terms of how it is working and whether it will be adequate, the noble Lord obviously infers that the crypto-asset technology is evolving quickly. There are specific powers in the regulations for the Secretary of State to amend definitions associated with crypto assets. We always remain vigilant and will always keep this under review, but we believe these powers strike the right balance in strengthening the legislative framework and promoting technical innovation. We believe that, compared with other countries, we are ahead of the curve in the global efforts to tackle economic crime and terrorist financing involving crypto assets.

The noble Lord made a point about the consultation response. I completely understand the point he is making, and I will take it back to the department.

One of the questions the noble Lord asked was about oversight. I assure the noble Lord that I will write to him about that and specifically about Russia and the impact it has had there.

That is very helpful. I am talking about the proceeds of crime oversight SI, as I assume that the terrorism SIs will have the normal oversight of the terrorism independent reviewer.

The point about Russia is also quite important, for obvious reasons; I would appreciate it if the noble Lord could look into that and see what impact the Government think this may have on the sanctions that we are trying to impose on Russia.

I thank the noble Lord and give him that undertaking.

I am very grateful for the noble Lord’s comments and thank the Committee for considering these instruments, which are necessary to deliver the Government’s objective to complete commencement of the Economic Crime (Transparency and Enforcement) Act 2022 and the Economic Crime and Corporate Transparency Act 2023. I beg to move.

Motion agreed.