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Excerpts from Thematic Report on counter-terrorism of the EU Network of Independent Experts in Fundamental Rights

Legal analysis

Thematic Report on counter-terrorism of the EU Network of Independent Experts in Fundamental Rights (March 2003)

Opinion of EU Network of Independent Experts in Fundamental Rights

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(Pages 9-10) From introduction

In the European Union, the risk to fundamental rights posed by the adoption of measures to fight terrorism are all the greater since democratic and juridical controls are still very inadequate in the current institutional balance, particularly in the context of headings V and VI of the Treaty on European Union. The deliberate choice by Member States to base an important part of the Union's response on the second pillar of the Treaty in particular the adoption of common positions as a tool for the measures as specific the drawing up of lists of terrorist organisations or the exchange of information, in addition to a growing number of "anti-terrorist" clauses in agreements with non-Member States, deprives parliamentary institution of all sources of information and possibility of Action[7]. The lack of democratic legitimacy of these measures is all the greater, since a large part of the
fight against terrorism takes place in the context of implementing international commitments and positions decided within the United Nations Organisation, reducing further the option of parliamentary control over inter-governmental options. Several of the measures adopted by Member States in response to the terrorist threat were implemented in execution of Resolution 1373 (2001) adopted on 28 September 2001 by the United Nations Security Council determining the strategies for fighting terrorism by every available means, including its financing. Common Position 2001/930/CESP on the fight against terrorism [8], Common Position 2001/931/CESP on the application of specific measures to combat terrorism [9] and in respect of the freezing of assets, Council Regulation 2580/2001 of 27 December 2001; specific restrictive measures directed against certain persons and bodies with a view to fighting terrorism [10] were adopted within the European Union on the basis of this resolution. Decision 2001/927/EC of 27 December 2001, establishing the lists stipulated in this regulation, was made on the basis of Article 2 § 3 of the Regulation. Point VI of this Comment will analyse this problem in greater detail…

(Pages 40-46) VI. Elimination of the finance of terrorism

VI.1. Freezing of assets upstream of notification of offences

Article 8, par. 1 and 2 of the United Nations Convention on the suppression of the financing of terrorism requests contracting States to criminalize acts of financing terrorism and to adopt measures needed to identify, detect, freeze or seize any funds used or intended to be used to commit terrorist offences, and the proceeds of such offences, for possible confiscation. The process of ratification of this important instrument accelerated sharply after the attacks on 11 September 2001. In addition, United Nations Security Council Resolution 1373 on the freezing of terrorist assets and the finance of
terrorism recommends making a crime "criminalize the wilful provision or collection, by any means, directly or indirectly, of funds by their nationals or in their territories with the intention that the funds should be used, or in the knowledge that they are to be used, in order to carry out terrorist acts" (Article 1a). This resolution also specifies that the funds, financial assets or economic resources of persons who "commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts" shall be frozen along with those of persons or bodies associated with them (Article 1b).

Following the adoption of United Nations Security Council Resolution 1373, the European Union assumed two common positions on 27 December 2001164. Member States also decided to criminalize the finance of terrorism, freezing assets of certain persons or bodies identified in an appendix to the Common Position 2001/931/EPSC as assisting terrorism (a). At the same time, police and judicial cooperation have been strengthened in respect of groups, organizations and individuals listed in the
Appendix (b). The list which contains names which are updated twice a year, has been drawn up on the "the basis of precise information or material in the relevant file which indicates that a decision as been taken by a competent authority in respect of the persons, groups and entities concerned, irrespective of whether it concerns the instigation of investigations or prosecution for a terrorist act an attempt to perpetrate, participate in or facilitate such an act based on serious and credible evidence or clues, or condemnation for such deeds." (Article 1 § 4 of Common Position 2001/931/CFSP). The compilation and modification of the list are carried out by the Council on the basis of confidential
criteria which have not been defined in advance.

(a) On 27 December 2001, the Council also adopted Regulation 2580/2001165 since Community intervention was needed to implement the asset-freezing provisions of the Common Position 2001/631/CFSP and a ruling was necessary to draw up the list stipulated by Article 2 § 3 of the Regulation.166 The concepts of "…funds and other financial assets or economic resources" are defined in a wide sense, and including "…including funds of any kind, tangible or intangible, movable or immovable, how ever acquired, legal documents or instruments of any kind, including electronic or digital, evidencing title to or interest in, such assets, including but not limited to bank credits,
travellers' cheques, bank cheques, money orders, shares, securities, bonds, drafts and letters of credit".167 The Common Position 2001/931/CFS was later updated several times168 and also guided the actions of the Union against the Al Qaida movement169. This body of standards gave rise to a series of annulment actions, some of which in particular question the grounds of the measure, namely, the right of the persons in question to engage in an armed struggle170, whilst others prefer to adopt the formal framework of the adoption of these texts or the breaching of their political activities171. The provisions in question here are particularly Article 1 of the Additional Protocol to the European Convention Human Rights on property rights and Article 6 of the European Convention of Human Rights laying down the right to a fair trial. These measures affect the presumption of innocence172 because the freezing of assets prejudges the guilt of persons who have not been convicted of a crime.

(b) The persons, groups or entities concerned exclusively by Article 4 of the Common Position 2001/631/CFSP on specific measures for police and judicial cooperation to prevent and fight terrorist acts173. At this time, in fact, there is no judicial control of the measures adopted in the context of Title V of the Treaty on European Union in the legal order of the European Union.174 This situation cannot be reconciled with Articles 6 and 13 of the European Convention of Human Rights nor, a fortiori, with Article 47 of the Charter of Fundamental Rights. No doubt in the decision of inadmissibility given on
23 May 2002 on the joint applications SEGI and others and Gestoras Pro-Amnistia and others vs. the European Union, the European Court of Human Rights ruled that the plaintiffs cannot be considered "victims" of an infringement of their rights, in the meaning of Article 34 of the European Convention of Human Rights, as a result of the adoption of the two common positions in question on 27 December 2001 in the framework of CFSP (common position 2001/930/CFSP on combating terrorism and
common position 2001/931/CFSP on the implementation of specific measures for police and judicial cooperation to combat terrorism)175. The Court considered in fact that recognising the plaintiffs as "victims" in this situation would be equivalent to accepting that the individual's right to lodge complaints under the European Convention of Human Rights could be used to prevent an infringement of the Convention, and would thus extend the concept of "a potential victim" to a violation beyond which this concept had been used in the past. It based its opinion on the observation that the "common
positions" adopted in the context of CFSP are not, as such, directly applicable in the Member States and the implementation requires the adoption of concrete provisions in national law in the appropriate legal form in each Member State.

However, it would be a mistake to conclude from the Segi and others judgment that the absence of any judicial control in the context of Title V of the Treaty of European Union is an acceptable principle. The fundamental rights of the persons include the right to be protected against damage to his/her honour and reputation and the right to be presumed innocent until guilt is established. But these two rights may be threatened, or violated, by the positions of the Council adopted in the context of the CFSP that identifies certain individuals or organizations in order to attribute certain responsibilities to them, and asks the Member States to adopt measures against them, or that simply designates these
individuals or organisations by certain terms that could jeopardise their reputation. This is the reason, moreover, that the European Court of Human Rights considered that the circumstance that two of the plaintiffs were listed in the annex to the Common position 2001/91/CFSP was troublesome, but it refused to draw the consequent conclusions from this observation. If the Court of First Incidence of the European Communities, before which a complaint has been lodged by the organisations in question!, should consider that it is not competent to investigate these complaints, it will be difficult not to conclude that the legal protection of the individual is insufficient with regard to the potential consequences of common positions or actions adopted under Title V of the Treaty of European Union.

do not however have the right of equal recourse to the Courts, since their inclusion on this list does not at first sight, jeopardize personally and individually their rights and freedoms, but tends to affirm that priority should be given to inquiries concerning them176. It does however appear that the disreputable stigmatisation incurred by a body or individual in the list must not be neglected, and that the absence of any satisfactory remedy for the protection of their fundamental rights must be seen as regrettable177.
Aside from questions of the confidentiality of the collection of information, which must not result in a complete absence of control, an important question remains, that of the veracity and reliability of information which results in inclusion in the list, the danger of abuse of asset freezing increasing with a lack of a definition of a terrorist offence. Undeniably, the means of drawing up this list do not appear to be satisfactory in their present form, since the choice of an administrative procedure (inclusion in a list by a governmental body) concerns a field which should fall strictly within the authority of the
judiciary. In addition, inclusion in the list, which can result simply from an investigation launched in a Member State, will require the other Member States to freeze the assets of the persons listed, although no control by the judicial authorities of those States is envisaged178.

The initiatives taken by the Member States are strongly convergent, since they were taken under the United Nations Convention on the suppression of the financing of terrorism, United Nations Security Council Resolution 1373, and Regulation 2580/2001 on the implementation of the freezing of assets. The last of these instruments is directly applicable in the Member States, only sanctions for breaches of the Regulation having to be adopted by the States.179

Thus, Belgium has enacted Royal Decree of 2 May 2002 on restrictive measures against certain persons and bodies in the context of the fight against terrorism180. Under Article 2, persons convicted of a breach of Regulation 2580/2001 are liable to a prison sentence of from eight days to five years and a fine from € 25 to 25,000181. This Decree is retroactive in respect of situations prior to the date of its publication, since it comes into force from 28 December 2001. It appeared necessary, however, for the legislative chambers to deal with this problem by means of a proposal for a law "…on the implementation of restrictive measures adopted by the Council of the European Union against States, certain persons and bodies" voted by the House of Representatives on 27 February 2003182. This proposal nevertheless contains other questionable aspects in that it allows the implementation of Common Positions (which are not binding, however) by Royal Decree, ipso facto circumventing Parliament.

On 9 April 2002, Spain ratified the international convention on the suppression of the financing of terrorism183. In addition, in 2002 it submitted a draft law on the prevention and seizure of financing of terrorism, which is yet to be approved by the Senate. The purpose of this legislation is to block transactions and movements of capital belonging to terrorist entities and to prevent opening of financial accounts where one of the parties to the transaction is associated with terrorist groups or organizations. A Monitoring Committee will direct and control these activities.

In Ireland, Sections 12-44 of the Criminal Justice (Terrorist Offences) Bill, 2002184 deal with the suppression of financing of terrorism by making provision for the measures necessary to enable ratification by Ireland of the UN Convention for the Suppression of the Financing of Terrorism, 1999. The definition of financing terrorism in Section 13 is quite broad and provides that a person is guilty of the offence if s/he, inside or outside the State, directly or indirectly, unlawfully and wilfully, provides, collects or receives funds intending that they be used or knowing that they will be used to carry out an act that is an offence under Irish law and within the scope of a treaty annexed to the abovementioned 1999 Convention185. Attempts to commit such an offence are also covered. A scheme
for freezing and confiscating funds used or allocated for use in connection with the offence of financing terrorism is inserted into the Criminal Justice Act, 1994 by Sections 21-43.186 A procedure (based on the Proceeds of Crime Act, 1996) for the freezing, restraint or confiscation of funds, by means of a court order, in the possession or control of a person that are being used or may be intended for use in committing, or facilitating the commission of, a terrorist offence or an offence of financing terrorism is provided for by Sections 14-20. Une répartition de la charge de la preuve est prévue: Section 18 (based on Section 8 of the 1996 Act) makes provision for the use of opinion evidence by a
member of An Garda Siochana (Irish Police) not below the rank of Chief Superintendent with the proviso that the High Court must be satisfied that there are reasonable grounds for that opinion. The section also stipulates that the standard of proof to be applied is that applicable to civil proceedings, i.e. the balance of probabilities.

In the United Kingdom, the UN Convention for the Suppression of the Financing of Terrorism has been ratified, entering into force on 10 April 2002. The offences created by this will be added to the list of extraditable offences. Par ailleurs, on constate que unlike the power of forfeiture (ss 1-3 of the Anti-terrorism, Crime and Secutity Act 2001), that relating to the freezing of assets is not restricted to use in connection with terrorism (ss 4-14). In particular it covers their use in respect of action detrimental to the United Kingdom economy. Not only could this apply to economic activity that is entirely legitimate where it takes place but also fails to give any criteria by which detriment to the
economy is to be assessed so that the potential exercise of the power might not be anticipated. The lack of criteria will also handicap judicial scrutiny of any exercise of this power. These provisions are thus not entirely consistent with the controls permitted over the peaceful enjoyment of possessions.

Italy has ratified the Convention of New York of 9 December 1999 on the suppression of the financing of terrorism187. In view of the contents of Resolution 1373 of United Nations Security Council, the Government has also formed a financial security Committee responsible to the Minister of Economy and Finance188. The prevention of Mafia type activities (law of 19 March 1990 n° 55) is thus strengthened for the offences listed in Article 270b which includes the finance of terrorism (decree 374/2001, supra, concerning the definition of terrorism), by stipulating disciplinary sanctions, the suspension or revocation of the authorisation to exercise banking activities, already provided in respect of the harbouring of stolen goods, money laundering, use of money, goods or other assets of illicit origin189. The main problem raised by the new standards concerns the punishment of conduct which contributed only occasionally to the achievement of the association's aims, the option of criminalising support given to an association which has not involved the effective membership of a person in that association, entails the risk of breaching the principle of lawfulness by the creation of
new repressive schemes not sanctioned by law.

For its part, Sweden has engaged in discussions on decision (SC/7206) concerning three Swedish citizens (originally from Somalia) who were accused of being associated with a terrorist organization and whose assets were frozen on this basis within just a few days despite their strong denial of any connections with Al-Qaida. Several Swedish NGOs have expressed criticism with regard to withholding information within the UN Security Council about the case in question and thereby not giving any opportunity to the accused to dispute the decision.190 It is of utmost importance that those under suspicion of having committed a crime are not penalised until their guilt has been proven in a fair trial by an independent court. According to the Swedish Red Cross this fundamental legal
principle has obviously not been taken into consideration in the case of the three Swedes.191 They were sentenced without a hearing and without a chance to defend themselves. Initially, they were denied legal aid despite the fact that they had no resources whatsoever at their disposal. In other words, the Swedish Government has been criticised for the way in which it has enforced the UN resolutions and EU regulations.192 The issue is currently subject of proceedings in Luxemburg (at the ECJ), focusing primarily on the actions by EU and Sweden in the matter. The three Swedes as well as the organization Al Barakaat initiated an action for annulment before the Court of first instance of the EC on 10 December 2001 challenging, inter alia, the EU decision to freeze their assets (Annex I to Regulation No (EEC) 881/2002).193 The Court of first instance pronounced on 7 May 2002 its decision on the part of the application dealing with a claim for provisional measures in the case T-306/01R, Abdirisak Aden, Abdulaziz Ali, Ahmed Yusuf, Al Barakaat International Foundation v. EU and the European
Commission. The claim was rejected.194 Meanwhile the names of the three Swedish citizens have been struck from the sanctions list as the result of an agreement between them and the US.195 In preparation for the ratification of the UN Convention for the Suppression of the Financing of Terrorism from 1999196 a new act (Lag om straff för finansiering av särskilt allvarlig brottslighet i vissa fall, m.m; (SFS 2002:444)) (Act on Punishment for the Financing of Especially Serious Crimes in Certain Circumstances (2002:444) and a new regulation (Förordning om åtgärder mot penningtvätt och finansiering av särskilt allvarlig brottslighet i vissa fall, (SFS 2002:552)) were approved and entered into force on 1 July 2002. The new act criminalises the financing of terrorist crimes in accordance with Article 2 of the UN Convention. It also comprises explicit rules concerning jurisdiction, forfeiture of funds, used or allocated for the purpose of committing the offences set forth in Article 2. In addition, the Act requires companies covered by the Act on Measures against Money Laundering (SFS 1993:768) to examine any transaction, which can be assumed on reasonable grounds to be intended for the financing of the crimes covered by the law (i.e., the terrorist crimes enumerated in the Convention and its annex). The companies shall report any circumstances that may be indicative of such transactions to the Swedish FIU.

Lastly, it should be remembered that Austria, Finland, Greece and France have ratified the International Convention on the suppression of the financing of terrorism197. In Luxembourg, a proposal for a law No. 4954, submitted on 16 May 2002, on the suppression of terrorism and its finance and approving the International Convention on the suppression of the financing of terrorism of 10 January 2000, has not yet been adopted198.

Page 52, under the heading: General conclusions
6. The EU "terrorist lists" and freezing of assets of suspected terrorists
The lot of persons, groups or bodies targeted by Article 4 of the Council common position 2001/91/CFSP of 27 December 2001 on the implementation of special measures in the fight against terrorism - subsequently confirmed by common position 2002/340/CFSP of 2 May 2002 and 2002/940/CFSP of 17 June 2002 - clearly illustrate the risk for the guarantee of the right to effective remedy before a judge, of the absence of any judicial control in the context of Title V of the Treaty of European Union. Independently of the quality of the information on basis of which these persons were identified, it must be observed that these persons, groups or bodies undergo a serious violation of their right to presumption of innocence, and their right to preservation of their reputation. Even if it should appear possible for them to obtain compensation of the damage incurred as a result of these violations, the situation remains unsatisfactory: infringement of fundamental rights must be avoided, insofar as possible, and not simply compensated once been committed.

EU Network of Independent Experts in Fundamental Rights (March 2003), compiled by Statewatch. See also full Thematic Report (pdf).