Page last updated at 13:16 GMT, Thursday, 4 February 2010

Terror asset freezing orders lifted by Supreme Court

By Dominic Casciani
BBC News

Mohammed al-Ghabra
Mohammed al-Ghabra is one of those who had their assets frozen

A ruling by the UK's top judges to quash asset-freezing orders against suspected terrorists has come into effect, despite ministers' pleas.

The Supreme Court said it could not delay its judgement just to allow the government time to introduce a new law.

Ministers had asked for a delay, saying they did not want suspects to get cash before Parliament has a chance to act.

The Treasury says emergency legislation to create a new asset-freezing system will be debated by MPs next week.

In January, the Supreme Court ruled that the government had exceeded its powers by controlling the assets of five suspects.

It said that if the government wanted to create a system to seize or freeze the assets of suspected terrorists, then it was for Parliament to decide how to do it, rather than for ministers to simply create the regime without a vote.

Immediate effect

The court initially suspended its judgement after the government asked for time to change the law. But now the justices have said that their ruling will come into immediate effect to avoid any suggestion that the old system was lawful in any way.

The Treasury has immediately contacted banks to say it is taking steps to make the system lawful.

This is a clear example of an attempt to adversely affect the basic rights of the citizen without the clear authority of Parliamen
Lord Hope, Supreme Court Justice

In practical terms, this means it is exceptionally unlikely that any of the five men in the case will be able to retrieve assets because of the time they would need to legally challenge any decision to turn them away.

The men, all named in court, had been denied access to funds, other than a limited amount to live on. Each had been usually only allowed £10 a week in cash and they needed special permission for other expenses.

Approximately 150 suspects are covered by the UK regime and 40 have bank accounts or are based in the UK.

Emergency law

Exchequer Secretary to the Treasury Sarah McCarthy-Fry said: "The government is determined to maintain the important safeguards to national security, provided by our terrorist asset-freezing regime.

"That's why we are introducing primary legislation that will restore the validity of the Terrorism Orders and the designations made under them.

"This legislation includes a provision backdated to today's judgement, providing legal authority to banks and those covered by the existing orders to ensure asset freezes can be maintained without a gap."

A second longer bill will also be introduced to create permanent asset-freezing powers before the emergency legislation expires at the end of 2010.

But shadow chancellor George Osborne said the mistake had all been Prime Minister's Gordon Brown's making when he still at the Treasury.

"This is massive incompetence by the Government," he said. "The law they used to stop terrorism suspects having access to money has been ruled illegal, and they are desperately searching for a plan B.

"I spoke to the Chancellor this morning and we will help the Government pass emergency legislation, but as we speak there is no law in place to prevent terror suspects from accessing frozen assets.

"That is not a risk Britain should be running, and the blame lies with Gordon Brown, who was warned six years ago about this and refused to listen."

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