08-07-2019

Part 3: General

Section 52: Crown application

This section provides that sanctions regulations and regulations under section 49 may make provision binding the Crown, although they may not make the Crown criminally liable. Nothing in this Act affects Her Majesty in Her private capacity.

Section 53: Saving for prerogative powers

This section ensures that the provisions of the Act do not abrogate or modify any prerogative power to exclude individuals from the UK. It also ensures that powers in the Act which may be exercised in relation to ships, including those in sections 19 and 20, would not limit powers which may be exercised in relation to ships by virtue of the Royal prerogative.

Section 54: Regulations: general

This section sets out the types of provision which may be made by regulations made under the powers provided by this Act. It enables the appropriate Minister to make consequential provision such as repealing, revoking or otherwise amending existing legislation. It also provides that regulations made under section 1 may only amend the definition of "terrorist financing" in the Act to add a reference to an offence where the purpose of the regulations containing the offence is compliance with a UN or other international obligation or a purpose related to the prevention of terrorism.

Section 55: Parliamentary procedure for regulations

This section lays out the Parliamentary procedures to be used for regulations made under the Act. Regulations would be made using three types of procedure.

Sanctions regulations made under section 1 which do not deal with the implementation of UN Security Council resolutions, and which are not mentioned in paragraph 136 below, will use the made-affirmative procedure. This procedure ensures that the regulations are able to come into force immediately, to prevent asset flight, but still requires Parliament to approve the regulations. The regulations will cease to have effect if both Houses of Parliament have not voted to approve them within 28 days of them being laid. The made-affirmative procedure also applies to money-laundering regulations (made under section 49) that make new provision about high-risk countries.

Regulations which repeal, revoke or amend any provision of primary legislation, or which authorise sanctions not covered by Chapter 1 (under section 47), or which set out procedures to deal with immigration decisions (under section 48), and money laundering regulations not mentioned in paragraph 135 above, will be subject to the draft-affirmative procedure. This procedure requires the approval of both Houses before the regulations can come into force.

Other regulations, except those dealing with commencement, will be subject to the negative procedure. Such regulations will remain in force unless either of the Houses annuls the regulations by passing a resolution against them.

Section 56: Regulations under section 1: transitory provision

This section allows Ministers to make regulations subject to slightly different procedures than those set out in section 55 if they consider it appropriate to do so as a result of or in connection with the withdrawal of the United Kingdom from the EU, for example in the case when a UK regime replaces an EU regime.

In those circumstances, sanctions regulations may provide that they will be brought into force on the day that Ministers specify in further regulations. This will allow flexibility for the sanctions regulations to be brought into force at the appropriate time.

Where this mechanism is used for any regulations subject to the made-affirmative procedure, the period for each House to vote to approve them (without which they will cease to have effect) will be 60 days rather than 28. The 60 day period specified by the made-affirmative procedure will start to run from the appointed date rather than the date of making.

Section 57: Duties to lay certain reports before parliament: further provision

This section enables certain reports relating to the regulations to be combined in one document, requires a written statement to be made by the Minister if reporting requirements are not complied with, and clarifies how those requirements apply.

Section 58: Retained EU rights

This section is consequential on provisions in the European Union (Withdrawal) Act 2018. It makes clear that any restrictions in that Act on the modification of retained EU law do not prevent powers under this Act (for example, powers to impose an asset-freeze or immigration sanction) from being exercised in cases where their exercise would interfere with a retained right that a person would otherwise have under section 4 of the European Union (Withdrawal) Act 2018.

Section 59: Consequential amendments and repeals

This section repeals most of Part 1 of the Terrorist Asset Freezing etc. Act 2010. It also makes various consequential amendments and repeals, as set out in Schedule 3.

Section 60: Meaning of "funds", "economic resources" and "freeze"

Subsection (1) defines "funds" as financial assets and benefits of any kind. It sets out a list of examples; this list is not exhaustive, and any form of financial assets which do not appear on the list will still be subject to sanctions if they are a financial asset or benefit to the designated person. By targeting "funds" as defined here, sanctions can effectively cut off a designated person’s revenue stream or access to assets.

Subsection (2) defines "economic resources", and provides the government with the ability to restrict access to any type of asset which would not be covered under "funds". Economic resources means assets of every kind – tangible or intangible, movable or immovable – which are not funds, but may be used to obtain funds, goods or services.

Subsection (3) defines the meaning of "freezing" of funds. Freezing funds prevents the designated person from dealing with funds in any way, including for example moving funds (for example from one account to another), changing their worth or ownership, or any use whatsoever.

Subsection (4) explains the application of "freezing" to economic resources which fall outside of the definition of funds, such as property or other assets. It prevents these goods from being "dealt with". Regulations made under the Act will define what is meant by ‘making available’ funds and economic resources.

Section 61: Meaning of "financial services" and "financial products"

Subsection (1) defines "financial services" as any service of a financial nature. It sets out a non-exhaustive list of examples; any forms of financial service which do not appear on the list will still be subject to sanctions if they are utilised to move funds which are subject to sanctions or to move, transfer or increase the wealth of the designated person or associated entities. "Financial products" are defined by reference to a number of different types of financial product, including transferable securities and money market instruments.

Section 62: Interpretation

This section sets out the meanings of various terms used in the Act and is self-explanatory.

Section 63: Extent

This section provides that, with some minor exceptions, the Act extends to England and Wales, Scotland, and Northern Ireland (subsection (2) sets out those provisions which do not extend to Scotland or Northern Ireland). It also allows for Her Majesty, by Order in Council, to extend the provisions of Part 1 and Part 3 of the Act, or any regulations made under Part 1 of the Act, with or without modifications, to any of the Channel Islands, the Isle of Man, or any of the British Overseas Territories.

Section 64: Commencement

This section sets out when the provisions in the Act come into force. Sections 32, 50, 52 to 56, and 60 and 65 came into force on the day on which the Act became an Act of Parliament. The remaining sections come into force on a day appointed by the Secretary of State.

Section 65: Short title

This section is self-explanatory.