Britain's financial Guantanamo



By Ben Hayes

This Thursday [24 April 2008], Mr Justice Collins of the High Court will deliver his judgment the case of 'G', 'K', 'A', 'M', and 'Q' v. H.M. Treasury. In the words of Rabinder Singh QC, "the facts of the case are reminiscent of an Austro-Hungarian novel". * At issue are two 'Orders in Council' adopted under the 1946 United Nations Act. This Act allows the government to introduce domestic law to implement UN agreements - in this case a series of Security Council Resolutions dealing with the financial sponsors of terrorism - without consulting parliament.

Since '9/11' the UN has maintained a list of 'individuals and entities associated with al-Qaida or the Taliban' whose assets must be frozen by member states, a list that now stands at 482 entries. The EU also maintains a 'terrorist' list. Senator Dick Marty, who headed the Council of Europe's investigations into 'extraordinary rendition', recently described the lack of legal safeguards for those affected by these regimes as a 'scandalous abuse of human rights'. The EU Courts have concurred (see Statewatch 'terrorist list' site).

In addition to the UN and EU 'terrorist' lists, the UK government, via the Treasury, also 'designates' persons suspected of involvement in terrorist-related activity. This regime, the terms of which have not been debated by MPs, provides for the freezing of funds of anyone suspected of involvement in terrorism, however tenuously and regardless of whether they have been named by the UN or EU sanctions committees.

'G', 'K', 'A', 'M' and 'Q' are among those 'designated' by the Treasury pursuant to the Terrorism Order 2006. They received identical letters informing them that: 'The Treasury has reasonable grounds to suspect that you are, or may be, a person who facilitates the commission of acts of terrorism' [emphasis added]. But, 'in the light of the sensitive nature of the information on which this decision was taken we are unable to give you further details'.

'G' then received another letter saying he had been designated by the UN Sanctions Committee. This letter said that he could petition the UK government to seek his removal from the UN list, but it failed to mention that it was actually the UK government that had secured his inclusion in the first place. For those designated by the UN Sanctions Committee there is no independent appeals procedure, nor right to know the reasoning behind the decision. The Al Qaida and Taliban Order 2006 gives effect to UN designations in the UK.

Once informed of your 'designation', you have 14 days to provide the Treasury with full details of all your assets - properties, rental income, bank accounts, employment status, the employment status of your wife, any benefits either of you receive, and any other 'economic resources' held by you or on your behalf. Failure to provide this information is a criminal offence. All of your assets are then frozen by the Treasury. After this, you and your family can apply to the Treasury for a licence to permit access to your assets or income for 'basic expenses' only.

It is now a criminal offence, punishable by up to seven years in prison, for anyone who knows of your designation to provide you with any funds or economic resources outside the terms of a Treasury licence. The details of around 40 people designated by the Treasury have been published, whilst an unknown number of designations remain entirely secret. These designations are known only to those affected, to financial institutions with access to a password controlled Treasury website, and to other individuals and organisations who the Treasury decides to notify in writing - typically family members, friends, associates, employers and social services. If you have the misfortune to have been personally notified of a designation, it is a criminal offence to disclose the details to anyone else, even your partner. In cases where designations have been publicised via the Treasury website, anyone providing funds or economic resources to a designated individual will be presumed to know of the designation, and therefore liable to prosecution.

Following designation, there is no immediate provision for the now obviously destitute designees, or their families, to access any funds at all. Entitlement to welfare benefit suddenly stops. Unless a designated individual understands what are extremely complex procedures, only a solicitor can lawfully prevent them starving, by petitioning the Treasury for a licence. These licences typically permit designated individuals who are married to receive a maximum of £10 per week in cash. The remainder of their benefit entitlement is paid, under licence, to their spouses. The spouse may only spend this money on basic expenses for the family. Unmarried designees are permitted basic expenses for themselves.

At the end of every month the licensee has seven days to submit accounts to the Treasury's Asset Freezing Unit, detailing each and every penny spent. Receipts must be provided for all items of any value, however small. Failure to comply, or failure to fully disclose expenditure, is a criminal offence. In a related case recently before the Judicial Committee of the House of Lords, Lord Hoffman expressed incredulity at the "meanness and squalor" of a regime that "monitored who had what for lunch".

Any other expenditure, or the procurement of any other 'economic advantage' that does not constitute a 'basic expense' requires a separate licence. But what is a basic expense? If 'A' wants an 'Oystercard', or 'K' needs a new pair of shoes, is this permitted? How much can one spend on shoes before they cease to be basic? Buying shoes which are not considered to be 'basic expenses' is a criminal offence. One of the designees sought clarification from the Treasury on whether he could buy three new pairs of shoes: smart shoes, trainers and hiking boots. To date, the Treasury has yet to answer this question, deeming it so complex as to require advice from a minister.

It gets worse. If 'Q' wants to borrow his wife's car to take the kids to school, his wife needs a licence to lend it to him. If 'M' wants to borrow his neighbour's lawnmower, the Treasury has stated that in certain circumstances the neighbour needs a licence to lend it to him. Since it is a criminal offence to provide any economic good to a designated person, is making a designated person a cup of coffee a criminal offence? Were these matters not so seriously affecting the mental health of those concerned, the facts before the High Court would be laughable.

Mr Justice Collins has before him a number of fundamental questions concerning the rule of law in Britain. Primarily, it is argued that the government's Terrorism and Al Qaida Orders of 2006 are ultra vires the UK's United Nations Act of 1946. In other words, could the drafters of this Act ever have envisaged or intended to legitimise such an extraordinary regime? Similarly, does the Terrorism Order go beyond what the UN Security Council Resolutions reasonably intended of the member states? Lawyers for the applicants argue that for a regime of this nature - like the 'Control Orders' regime - there is a clear constitutional requirement for an Act of Parliament.

It is also argued that the Terrorism Order contravenes the principle of 'legal certainty', criminalising in such bizarre circumstances not just those designated, but potentially an endless circle of families, friends and associates. It seems even clearer, as also submitted, that the Order interferes disproportionately with the fundamental rights to private and family life, to property, and to a fair hearing in accordance with the European Convention on Human Rights (not least because designation is open-ended with no provision for even periodic review).

Finally, is it really acceptable for the UK government to introduce, in a manner which has excluded all parliamentary scrutiny, such draconian sanctions on the basis that it merely suspects that there may be grounds to suggest that someone may be involved with terrorism? Anyone who knows anything about the standards and burden of proof required by UK law must harbour serious reservations. That the police have not even bothered to interview 'K', 'A', 'M', 'Q' or 'G' about their alleged involvement in financing acts of terrorism also speaks volumes. Over to you, Mr Justice Collins.

UPDATE 24 APRIL 2004: Justice Collins rules that Government measures introduced to freeze terrorist assets were unlawful and should be struck down as they had not been authorised or sanctioned by Parliament. See:

'G', 'K', 'A', 'M', and 'Q' v. H.M. Treasury: Judgment - full-text (24 April 2004)

Press release: Birnberg Peirce, Tuckers & Public Law Solicitors (24 April 2004)

See also Mean and squalid measures, Victoria Brittain (Guardian, 24 April 2004) and Anti-terror asset-freezing order improperly made (Times law report, 5 May 2008)



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