New Clause 9 - Customer information orders

National Security Bill – in a Public Bill Committee am 9:45 am ar 18 Hydref 2022.

Danfonwch hysbysiad imi am ddadleuon fel hyn

“Schedule (

This new clause introduces the new Schedule inserted by NS2.

Brought up, and read the First time.

Photo of James Gray James Gray Ceidwadwyr, North Wiltshire

With this it will be convenient to consider Government new schedule 2—Customer information orders.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

I beg to move, That the clause be read a Second time.

New clause 9 and schedule 2 seek to insert customer information orders into the Bill as part of the suite of investigatory measures. Those who engage in state threats activity are highly trained individuals who have knowledge of tradecraft that can obfuscate their identity and real intentions.

For example, the tradecraft could be used to conceal transactions by creating secret bank accounts under false identities, or accounts registered to different addresses, in order to send or receive money for conducting activity. The operational objective of a customer information order is to enable an investigator to identify accounts and other account information in relation to state threats investigations. For example, this could be where a foreign agent is paying others to conduct state threats activity in the United Kingdom and police need to identify where the agent’s account is held, or it could be where a suspect is using a covert account under a false identity to receive funds to use for the purposes of state threats activity.

The customer information order is therefore intended for use as a tool of discovery during an investigation, often in the early stages. Once accounts have been identified through a customer information order, they could, where appropriate, be subject to further monitoring or investigation through a schedule 2 production order or an account monitoring order. Without customer information orders, accounts used by those conducting state threats activity may go unidentified, reducing investigative opportunities and, in turn, the ability for law enforcement to disrupt harmful activity and bring offenders to justice. We recognise that such orders could potentially require any financial institution to provide information about relevant customers. As such, senior authorisation is required within law enforcement before an application can be made to the courts.

We expect that, in practice, the powers will be used by police and NCA officers who have received relevant financial investigator training, and we are continuing to work with the police and NCA on creating the relevant guidance. Again, we have modelled the provisions on the terrorism equivalent and the measures used in the Proceeds of Crime Act 2002, and the consistency of these processes will ensure that law enforcement officers can make the most effective use of the powers. As I have set out, the customer information orders are another important investigative tool, opening new lines of inquiry and ensuring that law enforcement can run effective state threats investigations.

Photo of Holly Lynch Holly Lynch Shadow Minister (Home Office)

New clause 9 and new schedule 2 establish customer information orders, which authorise the police and NCA officers to obtain customer information from financial institutions. In its written submission to the Committee, for which we are all grateful, Counter Terrorism Policing has welcomed the provision, stating that it will

“enable investigators to identify accounts in relation to state threat investigations, or where an individual is using a covert account under a false identity to receive funds to use for the purposes of state threats.”

As the Minister outlined, the tool has been available to law enforcement for terrorism investigations thanks to schedule 6 to the Terrorism Act 2000, and it has been available for criminal investigations through the Proceeds of Crime Act. However, according to Counter Terrorism Policing, it has not been possible to use either Act in relation to state threats investigations, so we welcome the provision. It prompts the question of why we have not addressed this issue sooner.

Subsection (2) states that the judge may grant the order if they are satisfied that

“the order is sought for the purposes of an investigation into foreign power activity”,

and that

“the order will enhance the effectiveness of the investigation.”

We have spoken a lot about the value of an independent reviewer, and I welcome the substance of the Minister’s comments. It is worth keeping under review the threshold of a judge being satisfied that the order is sought for the purposes of investigation into foreign power activity. We cannot use these orders without good cause, but if we need them to be able to find evidence of foreign power activity, will investigators be able to satisfy a judge prior to that? It will be interesting to see how many applications are granted and rejected once we start to work with the orders. Aside from those points, I am happy with new schedule 2.

Photo of Stuart McDonald Stuart McDonald Shadow SNP Spokesperson (Home Affairs)

I will make a couple of brief points. The broad thrust of the new schedule and the intention behind it seem absolutely fine, but I am interested in the tests that must be satisfied before an order is made. Under the previous schedule on disclosure orders, the judge has to be satisfied that there are reasonable grounds for suspicion, that there is substantial value in the information gained under the order and that the order would be in the public interest.

In contrast, here in new schedule 2, the judge has to be satisfied only that the order is sought for the purposes of an investigation and that it will enhance the effectiveness of that investigation. That seems a pretty low bar to allowing this pretty invasive procedure to be gone through. Why that choice of language? I guess it is modelled on the provisions that have been mentioned. I have probably not been as diligent as the shadow Minister has in doing my homework and tracking through the previous bits of legislation, and I will now do that. The information gained under these orders could be pretty intrusive, so we need to ensure we are not giving carte blanche to all sorts of intrusive investigations. I am a little bit concerned about the low level of test, compared with the test for disclosure orders.

My second, brief point is that paragraph 4 of the new schedule suggests that the person whose records are about to be trawled through can seek to vary or discharge the order. It is not clear to me how they would go about doing that, given that I suspect most orders will be made without any notice, and they can even be made by a judge in chambers. What assurance can we have that people will be able to challenge this potentially intrusive investigation?

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

The question as to why we have not addressed this sooner is a fair one. The UK’s investigation legislation is complex, as the hon. Member for Halifax knows only too well from the homework she has obviously done for our sittings. For example, in the Proceeds of Crime Act there are more than seven investigatory orders used in criminal and civil investigations. The consideration that has gone into this has naturally been complex, and it has required a lot of time and input. This Bill, as she knows very well, has been some years—and, indeed, some Ministers—in the making.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

Let us see. The fact that there are no recorded uses of the information orders in TACT demonstrates how sparing the use of these provisions will be.

Question put and agreed to.

New clause 9 accordingly read a Second time, and added to the Bill.