C v HM Treasury

A designation under the Terrorist Asset-Freezing etc. Act 2010 requires three elements: reasonable belief that the person is or has been involved in terrorist activity; consideration that financial restrictions are necessary to protect the public from terrorism; and a discretionary decision to designate. On an appeal under section 26, the Treasury must justify its decision, and the court may consider whether the statutory conditions existed both when the designation was made and when the appeal was heard. Reasonable belief does not require proof on the balance of probabilities. Necessity requires a proportionality assessment, with close attention to the impact of the restrictions and possible alternatives. The court dismissed the challenge to the original designation but allowed the challenge to its renewal because the evidence no longer established continuing necessity.

The appellant challenged, under section 26 of the Terrorist Asset-Freezing etc. Act 2010, his designation by HM Treasury in February 2015 and its renewal in February 2016. The designation restricted dealings with his funds and economic resources because the Treasury considered that he had provided financial and logistical support to Al-Muhajiroun and its members.

The court considered whether the Treasury reasonably believed that the appellant had been involved in terrorist activity, whether financial restrictions were necessary for public protection, the burden of justification on the appeal, and the effect of changed circumstances by the time of the hearing.

1. Statutory structure. Section 2 of the Terrorist Asset-Freezing etc. Act 2010 contains two threshold conditions and a discretionary power. The Treasury must reasonably believe that the person is or has been involved in terrorist activity and consider financial restrictions necessary for public protection. Even if both conditions are met, designation remains discretionary.
2. Scope of the appeal. An appeal under section 26 is directed to a Treasury decision made without prior judicial involvement. The burden lies on the Treasury to justify the order. The court may consider whether the statutory conditions existed both at the date of designation and at the appeal hearing, having regard to the court’s broad order-making power and the parties’ ability to adduce further evidence.
3. Reasonable belief. The statutory standard does not require proof of underlying facts on the balance of probabilities or proof of involvement in a specific terrorist act to a higher standard. The evidence may establish involvement through conduct facilitating terrorist activity or through support or assistance to persons known or believed to be involved in it.
4. Application to the original designation. The combined evidence of substantial cross-subsidisation, employment of persons regarded as ALM members, use of 32 New Road, the appellant’s relationship with his brother and attendance at demonstrations established a firm foundation for reasonable belief. The appellant was at least wilfully blind to the fact that his support assisted ALM and its members.
5. Necessity and proportionality. The asset freeze was a targeted and proportionate means of preventing funds reaching ALM and its members. Less intrusive measures, including surveillance or restrictions directed at recipients, would not have addressed the financial support at source. The impact on the appellant and his family was significant, but the qualified Convention rights were outweighed by the public interest in preventing ALM’s terrorist and radicalising activities.
6. Renewal. By February 2016 the appellant no longer held the lease at 32 New Road, his new tuition business had closed, and the remaining financial evidence did not establish a continuing risk requiring designation. The appeal against the original designation was dismissed. The appeal against the renewed designation was allowed.

The judgment records no prior judicial decision in the same proceedings. The two section 26 appeals were heard together.