West Law Report

Anti-terror asset-freezing order improperly made

From The TimesMay 5, 2008

Anti-terror asset-freezing order improperly made
Queen’s Bench Division

Published May 5, 2008

A, K, M, Q and G v HM Treasury

Before Mr Justice Collins

Judgment April 24, 2008

Orders in Council, made purportedly to give effect to United Nations resolutions freezing the assets of terrorist organisations and their adherents, were to be quashed since, among other faults, they had been improperly made outside the parliamentary process and were bad as creating criminal law of insufficient certainty.

Mr Justice Collins so held in the Queen’s Bench Division in allowing applications by A, K, M and Q to have asset-freezing orders under the Terrorism (United Nations Measures) Order (SI 2006 No 2657) set aside by special process and in allowing a claim by G for judicial review of that and of a further order under the al-Qaeda and Taleban (United Nations Measures) Order (SI 2006 No 2952).

Those orders had been made under section 1 of the United Nations Act 1946. They purported to give effect to various United Nations Security Council resolutions:

  1. 1373/2001 (Threats to international peace and security caused by terrorist acts),
  2. 1452/2002 (Threats to international peace and security caused by terrorist acts),
  3. 1267/1999 (on the situation in Afghanistan),
  4. 1333/2000 (on the situation in Afghanistan),
  5. 1390/2002 (The situation in Afghanistan),
  6. 1526/2004 (Threats to international peace and security caused by terrorist acts),
  7. 1671/2005 (The situation concerning the Democratic Republic of the Congo), and
  8. 1735/2006 (Threats to international peace and security caused by terrorist acts)

which were intended to combat the financing of terrorism.

The claimants had all been designated under that antifinancing regime. As a result orders were made imposing draconian limitations on their lives by way of control of their use of finance and other economic resources.

Mr Tim Owen, QC and Mr Daniel Squires for A, K, M and Q; Mr Rabinder Singh, QC and Mr Richard Hermer for G; Mr Jonathan Crow, QC and Mr Andrew O’Connor for the Treasury.

MR JUSTICE COLLINS said that it was clear that such an order was extremely harsh on the designated person and because of the criminal liability of those, including particularly his family, who might provide him with economic resources, given the wide definition given to that expression. But harshness was not in itself a reason to interfere with it.

Counsel for the applicants submitted that the method used to apply the obligations imposed by the UN resolutions was unlawful.

Parliament had been bypassed by the use of Orders in Council. In deciding the appropriate way in which the obligations should be applied, and in particular in creating the criminal offences set out in the orders, it was necessary that parliamentary approval should be obtained. Those submissions were, in his Lordship’s judgment, entirely persuasive.

Resolution 1371/2001 required the freezing of assets of those who committed or facilitated the commission of terrorist acts. Order 2006/2657 coferred power to designate where the Treasury had reasonable grounds for suspecting a person was or might be committing such acts.

His Lordship said it was impossible to see how the test in the UK order could constitute a necessary means of applying the UN resolution.

It was accepted the court could consider whether the person affected was, on the facts, properly within the test to be applied. That meant all material had to be available to the court, whether closed or open.

In his Lordship’s experience, that included intercept material. Section 17 of the Regulation of Investigatory Powers Act 2000 excluded such evidence from any legal proceedings Fairness worked for the Crown as it did for the applicants. Thus the Treasury was unable to rely on inculpatory intercept material just as the applicant was unable to rely on exculpatory intercept material.

That could not be in the interests of justice or indeed of ensuring that the right people were made subject to such orders. Thus, in his Lordship’s view, it was impossible to say that the use of an Order in Council was expedient in such circumstances.

It was submitted that the orders were unlawful in establishing criminal offences which went far beyond what was reasonably required and offended against the principle of legal certainty.

The very wide definition of “economic resources” made it impossible for members of the family of the designated person to know whether they were committing an offence or a licence from the Treasury was needed.

One of more than fifty queries to the Treasury, illustrating resultant absurdity, was whether a licence was needed to lend a car to the designated person to go to the supermarket for the family’s groceries. The Treasury, wrongly in his Lordship’s view, decided a licence was needed.

The principle of legal certainty in the context of criminal offences had been discussed by the House of Lords in Norris v USA ( The TimesMarch 14, 2008; [2008] 2 WLR 673), R v Rimmington (The Times October 28, 2005; [2006] 1 AC 459) and R v Jones (Margaret) (The Times March 30, 2006; [2007] 1 AC 136).

The purpose of asset-freezing was to ensure that funds were not made available for terrorist purposes. Thus any criminal liability which could fall on those who made any assets available to a designated person should depend on whether it was or ought to have been known to the supplier that the asset in question could result in funds being available for terrorist purposes.

That at the very least seemed to his Lordship to be an appropriate limitation on criminal liability.

How the requirements should be put into law was a matter for parliamentary consideration. Neither Order in Council represented a necessary or expedient means of giving effect to the obligations imposed.

The result would be that both the orders had to be quashed. That was not to say that freezing orders could not be made to comply with UN resolutions.

Solicitors: Birnberg Peirce & Partners and Public Law Solicitors, Birmingham; Tuckers, Marylebone; Treasury Solicitor.