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Lord Kingsland: My Lords, I confirm the Minister's description of what he has said as Xnegative". I should like to say to noble Lords that I am a great supporter of the lay magistracy. Indeed, earlier this week I spent a considerable time supporting magistrates in a debate. Nevertheless, I believe that the complex financial issues that will be raised by the necessity to trace and subrogate will require a Chancery judge. If the Bill has a long life, the Government will need to reconsider the use of magistrates for this purpose. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 [Forfeiture of terrorist cash]:
Lord Kingsland moved Amendment No. 39:
- Page 75, line 11, at end insert Xwhether legal tender or not"
The noble Lord said: My Lords, Amendment No. 39 again raises issues connected with banknotes that are not regarded as legal tender, including counterfeit currency and, in particular, the question as to whether they come within the ambit of the Bill in relation to forfeiture, seizure and the detention of terrorist cash. The noble and learned Lord promised to return to these matters on Report.
I know that the noble Lord, Lord Williamson of Horton, is anxious to hear about the problems connected with German currency and that the noble Earl, Lord Mar and Kellie, wishes to address the matter of Scottish banknotes. I should also like to know whether the Minister has thought again about the wisdom of relying on the existing criminal law to deal with counterfeit money—does it really enjoy such expeditious and complete measures of control as the Government are proposing in the Bill?
As far Amendment No. 47 is concerned, I was puzzled by the Minister's response to this amendment at Committee stage. The amendment seeks to ensure that the civil procedure to forfeit cash cannot take place until,
- Xcriminal proceedings have been concluded".
Amendment No. 52 concerns exceptional loss. It inquires about the circumstances in which it would be appropriate for a court to award compensation. In our view, if under paragraph 10(4) of Schedule 1,
- Xthe applicant has suffered loss as a result of the detention of the cash",
The Minister said, by contrast, that the Bill was correct in stipulating that the circumstances should be exceptional. I was concerned by the way in which the Minister justified this provision. He said that authorised officers may be fearful of making seizure orders because they might be responsible for large pay-outs. As I said in Committee, I cannot accept that public officials would be influenced to behave in that way. I beg to move.
The Earl of Mar and Kellie: My Lords, I should like to add one or two comments in regard to Amendment No. 39, which has been prefaced as the XScottish banknotes amendment". I remind the House that not only do banks in Scotland issue notes, but so do banks in Northern Ireland, in the bailiwicks of Guernsey and Jersey and in the Isle of Man. It would be sensible to
clarify this issue now and avoid future arguments about the legitimacy of these currencies. They are acceptable tender but they are not legal tender, and it would be wrong for anyone to get the impression that they were safe homes for terrorist cash. The Minister promised to go away and think about the matter. I look forward to hearing what his thoughts came to.
Lord Rooker: My Lords, I am grateful for the opportunity to come back to these amendments. My answers in regard to Amendment No. 39 may sound the same, but they are a result of the consideration given—even in the time available—to some of the issues raised. This gives us an opportunity to have another think about the drafting of the Bill.
Amendment No. 39 takes into consideration the possibility of an authorised officer coming across counterfeit cash. The key objective is to take terrorist cash which is legal tender out of circulation. If the cash is not legal tender, there are other powers to deal with it. It probably is not much use to a terrorist anyway, so no particular purpose will be achieved by the amendment. If the cash was known to be counterfeit, it would be liable to seizure under the normal criminal law for the appropriate offence, whatever it may be.
Where the cash was not known to be counterfeit, it might be seized unwittingly in accordance with the Schedule 1 scheme, but, once it was discovered to be counterfeit, it would revert to being dealt with by other powers. We do not believe that there is any need for the cash seizure scheme to cover cash which is not legal tender because powers already exist to deal with such cash and to remove it from circulation. Scottish banknotes could be seized like any other currency and are covered by the definition of Xcash" in paragraph (a).
The issue was raised of the European currencies that are soon to be redundant. The definition catches notes and coins if they have value as a current medium of exchange. It follows that at a certain point currencies converting to the euro will lose their value and will become collector's items only—one has only to go to the Travel Office in the Commons and look at the box in which coins are collected for charity. As collector's items only, they will not be seizable. The issue, therefore, is about alerting authorised officers to the dates on which the currencies lose their value. The dates are not all the same, which complicates matters. That is the only issue at stake—namely, the point at which the cash ceases to be legal tender. After that, it is not much use either to ourselves or to the terrorists.
Amendment No. 47 seeks to link the seizure of terrorist cash with criminal proceedings. The key point to remember is that this is a procedure for the forfeiture of terrorist cash which stands alone from the criminal proceedings. It is quite separate from the main thrust. It is about forfeiture only.
We are aware of the arguments advanced in Committee about linking seizure to Clause 1(1), setting out the circumstances under which the cash may be seized. But we do not see why this should mean
that the procedures themselves should await the outcome of the criminal proceedings. The procedure for the seizure of cash stands on its own. We believe that that is by far the best way to operate it.As regards Amendment No. 52, I note what noble Lords have said. Examples were given in Committee. Those whose cash is detained but not ultimately made the subject of forfeiture will already have been paid interest, because the cash will have been put in an interest-bearing account after a few hours. If their cash has not been put in an interest-bearing account, the person may be paid compensation in lieu of interest in accordance with the relevant paragraph in the schedule.
The amendment is concerned with the circumstances in which the additional compensation may be paid. We believe that it should be paid where the circumstances are Xexceptional". In Committee, I gave the example of a business deal that could not be concluded, although the precise circumstances would be for the courts to determine.
I also indicated in Committee and prompted debate on the fact that a lower test for compensation may result in authorised officers being deterred from making seizures for fear of being responsible for large pay-outs. That is not an attack on public officials, nor does it seek to undermine them in their work. I suspect that police officers come across this kind of situation every day and have to decide whether to issue a caution. It depends on the circumstances.
In circumstances where the test may result in a larger claim—where the circumstances are on the margin—the officer may decide that it is not worth the risk for that reason if the test is lower. That might be an unwelcome side-effect of the amendment. I cannot give examples as I do not know whether records are kept on this matter; namely, on the decisions of Customs and other officers making inquiries and investigations on whether to use their statutory powers. They are all governed by the legislation. Much of it gives authorised officers a degree of discretion as to how to proceed. The officer is the person on the front line.
I cannot expand on the situation any more than I did in Committee. We have re-examined the issue, but we are satisfied that the provision in the Bill as drafted will operate efficiently.
Lord Kingsland: My Lords, I am deeply unsatisfied with the Minister's reply to all three amendments. I simply cannot understand why he is not delighted with Amendment No. 39 and with the expression,
- Xwhether legal tender or not".
It is clear that the provisions in the criminal law will not be as effective with respect to counterfeit money as they would be with the amendment that is proposed; and with great respect to the noble Lord, I do not think he answered the questions that were posed by the noble Lord, Lord Williamson, in Committee.
As far as the other two amendments are concerned, both of them are about the same issue—and that is making sure that innocent parties who find themselves in possession of funds that are connected with terrorism are properly compensated. In my respectful submission to the Minister, his arguments give no comfort to such persons. In the circumstances, however, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 40 to 52 not moved.]
10.15 p.m.
Lord Glentoran moved Amendment No. 53:
- After Clause 3, insert the following new clause—
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