Chapter 4 – Supplementary Provisions
Supervision of exercise of powers
Section 26 – Appeal to the court in relation to designations
67.Section 26 provides that a designated person may appeal to the High Court or the Court of Session against a Treasury decision to make or vary, or not to vary or revoke, an interim or final designation, or a Treasury decision to renew a final designation. In determining the appeal the Court may quash the Treasury decision, require the Treasury to revoke the decision or make such an order as to the validity of the Treasury decision as it thinks appropriate. Subsection (4) provides that where a designated person appeals against a decision relating to a designation this does not suspend the effect of the decision.
Section 27 – Review of other decisions by the court
68.Section 27 provides for the review and setting aside of decisions made by the Treasury in connection with their functions under Part 1 of the Act, other than those decisions set out in section 26(1). Under subsection (2), any person affected by such a decision may apply to the High Court or, in Scotland, the Court of Session, for the decision to be set aside.
69.Subsection (3) specifies that in determining whether a decision should be set aside, the court shall apply the principles applicable on an application for judicial review. If the court decides that a decision should be set aside, the court may make any order, or grant any relief, that may be made or given in judicial review proceedings (subsection (4)).
Section 28 – Appeals and reviews: supplementary
70.This section makes additional provision about proceedings in the High Court or the Court of Session (a) on an appeal under section 26 or an application under section 27 or (b) on a claim arising from any matter to which such an appeal or application relates (“appeal and review proceedings”).
71.Subsection (1) inserts paragraph 2(bc) of Schedule 1 to the Senior Courts Act 1981. This ensures that appeal and review proceedings will be allocated to the Queen’s Bench Division.
72.Subsection (2) inserts section 18(1)(dc) of the Regulation of Investigatory Powers Act 2000 (“RIPA”). Section 17 of RIPA contains a general prohibition on the use of intercepted communications in legal proceedings. Section 18 of RIPA lists certain exceptions to that general prohibition and paragraph (1)(dc) will enable the disclosure of intercepted communications in appeal and review proceedings.
73.Subsection (3) inserts reference to section 18(1)(dc) of RIPA into section 18(2)(zb) of that Act. This provides that the exception created by subsection (2) does not extend to disclosure to parties to proceedings, other than the Treasury or persons appointed as special advocates.
74.Subsection (4) applies sections 66 to 68 of the Counter-Terrorism Act 2008 in relation to appeal and review proceedings as they apply in relation to financial restrictions proceedings within the meaning of section 65 of that Act. These sections were introduced to make provision about the rules of court for applications to set aside decisions under the 2006 Order and similar Orders. They require the maker of the rules of court to have regard to both the need for a proper review of the decision subject to challenge, and the need to ensure that disclosures are not made where this would be contrary to the public interest. They also contain provisions requiring rules of court to include rules in relation to applications by the Treasury to withhold material from disclosure and provisions relating to the appointment of a special advocate in financial restrictions proceedings. A special advocate is a qualified lawyer who has passed through the Government’s security vetting process, whose role is to represent the interests of a party to the proceedings (including any appeal) in circumstances where that party and his own legal representative are excluded from the proceedings. This would be necessary in appeal and review proceedings where, for example, closed source evidence is adduced. The special advocate is appointed by the appropriate law officer. Rules made under sections 66 and 67 of the Counter-Terrorism Act form Part 79 of the Civil Procedure Rules.
Section 29 – Initial exercise of powers to make rules of court
75.Section 29 allows the Lord Chancellor, the first time the power under section 28(4) is used, to exercise it to make rules of court in relation to England and Wales and Northern Ireland for proceedings on an appeal under section 26. The Lord Chancellor must consult the Lord Chief Justice of England and Wales or, where appropriate, the Lord Chief Justice of Northern Ireland, before making such rules, but this requirement may be satisfied by consultation that takes place before commencement (subsection (5)). These rules will come into effect when laid but will cease to have effect 40 days after being laid unless they have been approved by a resolution of each House of Parliament during that period. Subsection (9) disapplies some of the usual procedures for the making of rules in England and Wales and in Northern Ireland, in relation to the rules made by the Lord Chancellor. Subsection (10) provides that section 4(1) of the Statutory Instruments Act 1946 applies to court rules made for Northern Ireland by the Lord Chancellor.
Section 30 –Treasury report on operation of Part 1
76.Section 30 requires the Treasury to prepare and lay before Parliament a report about the exercise of the powers conferred on them by Part 1 of the Act on the next 31 March after Part 1 comes into force and every three months thereafter.
Section 31 – Independent review of operation of Part 1
77.This section requires the Treasury to appoint a person to review the operation of Part 1 of the Act and for that person to carry out such a review after a period of 9 months after Part 1 of the Act is passed and every subsequent 12 month period (subsections (1) and (2)). The reviewer must send the Treasury a report as soon as practicable after completion of the review (subsection (3)) and the Treasury must lay such report before Parliament (subsection (4)). The Treasury may pay the expenses and allowances of the reviewer (subsection (5)).
Offences
Section 32 – Penalties
78.Section 32 provides for penalties in relation to breaches of the prohibitions in Part 1 of the Act. Subsection (1) provides that a person guilty of any of the offences under section 11, 12, 13, 14, 15 or 18 is, on conviction on indictment, liable to a maximum of 7 years’ imprisonment or to a fine or to both or, on summary conviction, to imprisonment for a term not exceeding the “relevant maximum” (this term is defined in subsection (3)) or to a fine not exceeding the statutory maximum (which is currently set at £5,000) or to both.
79.Subsection (2) provides that a person guilty of an offence under section 10 (confidential information) or section 17 (licences) is liable, on conviction on indictment, to not more than 2 years’ imprisonment or to a fine or to both or, on summary conviction, to imprisonment not exceeding the “relevant maximum” or to a fine not exceeding the statutory maximum or to both.
80.Subsection (3) defines “the relevant maximum” for the purposes of subsections (1) and (2) as being 12 months in England and Wales (or 6 months if the offence was committed before the commencement of section 154(1) of the Criminal Justice Act 2003), 12 months in Scotland and 6 months in Northern Ireland.
81.Subsection (4) provides that a person guilty of an offence under section 19(5) (failure by relevant institutions to comply with reporting obligations) or 22 (failure to comply with request for information) is liable on summary conviction to imprisonment for a term not exceeding the “relevant maximum” or to a fine not exceeding level 5 on the standard scale (£5,000) or both. For the purposes of subsection (4), the “relevant maximum” is, in England and Wales, 51 weeks (or 6 months if the offence was committed before the commencement of section 281(4) and (5) of the Criminal Justice Act 2003) and, in Scotland or Northern Ireland, 6 months (subsection (5)).
Section 33 – Extra-territorial application of offences
82.This section provides that an offence under Part 1 of the Act may be committed by a UK national or UK incorporated body even where the conduct in question (which may include acts or omissions) is wholly or partly outside the UK. Subsection (2) defines “UK national” as a British citizen, a British overseas territories citizen, a British National (Overseas), a British Overseas citizen, a person who under the British Nationality Act 1981 is a British subject or a British protected person within the meaning of that Act. Subsection (3) further provides that the application of section 33 can be extended by way of Order in Council to bodies incorporated or constituted under the law of any of the Channel Islands, the Isle of Man or any British overseas territory. Subsection (6) specifies that nothing in section 33 affects any criminal liability arising otherwise than under section 33.
Section 34 – Liability of officers of body corporate etc.
83.Section 34 provides that if an offence under Part 1 of the Act is committed by a person other than a natural person, such as a body corporate, partnership or other unincorporated body, with the consent or connivance of any officer of that body or partnership, that officer as well as the body or partnership is guilty of the offence and is liable to be proceeded against and punished accordingly.
Section 35 – Jurisdiction to try offences
84.Section 35 provides that proceedings against a person in relation to offences under Part 1 of the Act committed outside the UK may be taken at any place in the UK and the offence shall, for all incidental purposes, be treated as having been committed there (subsection (1)). Subsection (2) specifies that in the application of subsection (1) to Scotland, any such proceedings may be taken in any sheriff court district in which the person is apprehended or in custody or in such sheriff court district as the Lord Advocate may determine. Subsection (3) defines “sheriff court district” by reference to the definition in section 307(1) of the Criminal Procedure (Scotland) Act 1995.
85.Subsection (4) inserts into section 28(2) of the Counter-Terrorism Act 2008 (jurisdiction to try offences committed in another part of the UK: offences to which the section applies) reference to offences under this Part of the Act, which has the effect of ensuring that proceedings in relation to offences under this Part of the Act committed in the UK may be taken at any place in the UK and the offence shall, for all incidental purposes, be treated as having been committed there.
Section 36 – Time limit for proceedings for summary offences
86.This section specifies that in England and Wales, Scotland and Northern Ireland summary proceedings in relation to an offence under section 19(5) or 22 may be brought within three years from the time the offence was committed and within 12 months from the date on which evidence sufficient in the opinion of the prosecutor (or, in Scotland, the Lord Advocate) to justify the proceedings came to such person’s knowledge.
Section 37 – Consent to prosecution
87.Section 37 provides that proceedings for an offence under Part 1 other than for an offence under section 19(5) or 22 may not be instituted except by or with the consent of, in England and Wales, the Attorney General and, in Northern Ireland, the Advocate General (subsection (1)). Subsection (2) provides that nothing in section 37 prevents the arrest or remanding in custody or on bail of a person charged with an offence under that Part.
Section 38 – Procedure for offences by unincorporated bodies
88.Section 38 deals with proceedings in relation to offences committed under Part 1 of the Act by a body which is not a body corporate. Subsection (1) specifies that a fine imposed on an unincorporated body on its conviction of an offence under that Part must be paid out of the funds of the body. Subsection (3) specifies that in England, Wales and Northern Ireland proceedings for an offence alleged to have been committed by such a body must be brought in the name of the body rather than in that of any of its members. Subsection (4) makes provision for unincorporated bodies to be treated in the same way as bodies corporate in such proceedings, including in relation to rules of court governing the service of documents and in relation to various legislative provisions in England and Wales and Northern Ireland which relate to procedures in legal proceedings against corporations (for example, the appointment of a representative to enter a plea on behalf of such body). Subsection (5) applies similar provisions in Scotland to the provisions on service of documents set out in subsection (4)(a) and applies section 70 of the Criminal Procedure (Scotland) Act 1995 (which contains provisions on the service of documents to bodies corporate) to unincorporated bodies. Section 70 is amended by section 66 of the Criminal Justice and Licensing (Scotland) Act 2010 to extend the provisions to unincorporated bodies, although section 66 is not yet in force. Subsection (6) anticipates that this provision will come into force and render subsection 5(b) unnecessary.
Interpretation
Section 39 – Meaning of “funds” and “economic resources”
89.This section defines what is meant for the purposes of Part 1 of the Act by “funds” and “economic resources”, such terms being integral to the prohibitions in sections 11 to 15 of the Act.
Section 40 – Meaning of “financial services”
90.This section defines what is meant for the purposes of Part 1 by “financial services”. This is a key term for the purposes of the prohibitions in sections 12 and 13 of the Act.
Section 41 – Meaning of “relevant institution”
91.This section defines what is meant for the purposes of Part 1 by “relevant institution”. This is a key term for the provisions in section 19 (reporting obligations of relevant institutions). The definition of relevant institutions includes those authorised under the Financial Services and Markets Act 2000 to carry on a regulated activity (as defined under section 22 of that Act), and Money Exchange bureaux.
Section 42 – Interpretation: general
92.This section contains definitions for the purposes of Part 1 of the Act, including a definition of “the relevant Security Council resolutions” (subsection (2)). Subsection (3) gives the Treasury the power, exercisable by Order, to amend the list of relevant Security Council resolutions in that definition.
Miscellaneous
Section 43– Service of notices
93.Section 43 sets out the steps the Treasury must take in order to serve notice on a person in relation to the making, issuing, variation and revocation of a designation or a licence.
Section 44 – Crown application
94.Section 44 provides that the Crown is bound by the provisions of Part 1 of the Act (subsection (1)) but will not be held criminally liable if it contravenes any such provision (subsection (2)). A person may, if it appears to the court that he or she has an interest, apply to the court to declare unlawful any act or omission of the Crown that constitutes a contravention of a provision of Part 1 of the Act (subsection (3)). Subsection (4) ensures that nothing in section 44 affects Her Majesty in her private capacity (subsection (5) defines “her private capacity” by reference to section 38(3) of the Crown Proceedings Act 1947).
Section 45 - Consequential amendments, repeals and revocations
95.Section 45 introduces Part 1 of Schedule 1 which contains amendments consequential on Part 1 of the Act. Paragraphs 1 to 4 make consequential changes to the Rules of the Court of Judicature (Northern Ireland) 1980 to apply Order 116B of those Rules to applications made under section 27(2) to set aside Treasury decisions. Paragraph 5 makes similar consequential changes to Part 79 of the Civil Procedure Rules to apply Part 79 to applications made under section 27(2). The three Regulations referred to in paragraphs 6-8 of Part 1 of Schedule 1 each refer to offences under the 2009 Order. These consequential amendments replace references to offences under the 2009 Order with references to the equivalent offences under Part 1 of this Act.
96.Section 45 also introduces Part 1 of Schedule 2 which contains repeals and revocations consequential on Part 1 of this Act. The repeals include the repeal of the 2001 Order, the 2006 Order and the 2009 Order, and the repeal of ancillary provisions in other Orders and Regulations. The Temporary Provisions Act is also repealed (although section 54(2) provides that certain provisions which have effect as part of the law of Guernsey, Jersey, the Isle of Man and the overseas territories shall remain in force until 31 March 2011).
97.Section 46 – Transitional provisions and savings.
98.Subsection (1) provides that the Temporary Provisions Act no longer has effect when Part 1 of this Act comes into force. Section 2 of that Act provided that certain acts or omissions by persons other than the Treasury in the period 4 February 2010 to 10 February 2010 are to be treated as lawful. Subsection (2) makes clear that even when section 2 of that Act ceases to have effect such acts or omissions will continue to be treated as lawful. Subsection (3) ensures that subsection (2) is to be read alongside section 16(1) of the Interpretation Act 1978, which provides that the repeal of an Act does not affect the operation of the Act while it was in force. Section 1 of the Temporary Provisions Act deems certain Orders validly made under section 1 of the United Nations Act 1946 and decisions made under those Orders to have effect. Subsection (4) applies section 16 of the Interpretation Act to those Orders so that notwithstanding the repeal of section 1 of the Temporary Provisions Act, decisions under the Orders will continue to have had effect while section 1 was in force. Subsection (5) provides that after the coming into force of Part 1 of the Act, any act or omission by the Treasury under the 2009 Order will be deemed to be an act or omission under the corresponding provision in the Act. Subsection (6) makes it clear that subsection (5) includes any directions made, licences granted or requests for information made under the 2009 Order which remain in force immediately before Part 1 of the Act comes into force. Subsection (7) states that the deeming provisions in subsections (5) and (6) have effect notwithstanding that the 2009 Order was not validly made under the United Nations Act 1946. Subsection (8) provides that any such ‘deemed’ designation ceases to have effect three months after Part 1 of the Act comes into force unless renewed or revoked before then. Subsection (9) provides that the references in the Regulations in Part 1 of Schedule 1 to sections 11, 12, 13, 14, 15 or 18 of Part 1 of this Act are to be read as including references to the corresponding provisions under the 2006 Order and the 2009 Order for the period the Temporary Provisions Act was in force. Subsection (10) provides that the repeal of section 64(1)(e) of the Counter-Terrorism Act 2008 does not affect any proceedings commenced before this Part of the Act comes into force.
99.Section 47 – Power to repeal Part.
100.This section provides that the Treasury must lay before Parliament a statutory instrument to repeal part or all of Part 1 of the Act (as appropriate) if the UN Security Council takes any decision that has the effect of terminating (permanently and without replacement), in whole or in part, the operation of the relevant Security Council Resolutions that require the maintenance of an asset-freezing regime.
