Terrorist Asset-Freezing in 2013/14 (March 2015)

My annual report on the operation of the Terrorist Asset-Freezing &c. Act 2010 was published on 12 March 2015.

It records that there were eight new Treasury designations in the year to September 2014 under the Terrorist Asset-Freezing &c Act 2010 Рmore than the total for the previous three years.  There has been an attempt to use asset-freezing legislation to respond to the threat posed by UK residents  who travel to and from Syria and Iraq for the purposes of terrorism.   But bearing in mind that over 600 Britons have travelled out there, the small number of designations indicates that asset-freezing has played only a marginal role in combating the most serious terrorist threat of the present time.

This aspect of the report received considerable media attention (Times (£), Telegraph, Daily Mail, Washington Times).

12 long-term prisoners were delisted over the same period, demonstrating that the annual review system works well.

For designated persons at liberty in the United Kingdom (of whom there were three in September 2014), the effect of an asset freeze can be “oppressive and disheartening”.¬† Managing the licensing &c¬†is also labour-intensive on both sides.¬† Further improvements to the operation of the system, some of them prompted by previous recommendations, are¬†under way.¬† ¬†But it remains important that consideration continues to be given by all concerned to the greater use of TAFA 2010 as a way of disrupting persons who cannot be prosecuted but in respect of whom financial restrictions are needed in order to protect the public from terrorism.¬† A collaborative effort is called for between, in particular, police and intelligence agencies, the CPS, Treasury and OSCT.¬† More could also be done to ensure the highest possible quality of consideration at the meetings that consider new designations, so increasing the probability that decisions will be fully defensible in legal proceedings.

Two problems of a more general nature are:

  • so-called “de-banking” or “de-risking”,¬† when banking facilities are withdrawn from persons or organisations falling outside a bank’s risk appetite.¬† The consequences are negative not only for those who lose banking facilities, but for the authorities who lose any possibility of monitoring their financial transactions.
  • the impact of terrorist financing laws on organisations which seek to distribute aid in regions of the world under the effective control of terrorist organisations.

I set out some pointers towards a possible solution in my report (echoing, in part, the recommendations of Parliament’s Draft Protection of Charities Bill Committee which reported recently under the chairmanship of Lord Hope of Craighead), and urge the Government, financial institutions and NGOs to work towards a resolution of these difficult issues.

Update 16 July 2015: The Government has responded positively to my recommendation that a “devil’s advocate” or “challenge champion” be appointed to mitigate the risk of groupthink in Asset Freeze Review Group meetings.¬† See¬†today’s post.

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