Asset Freezing (Compensation) Bill [HL]: Briefing for Lords Stages

This House of Lords Library briefing has been prepared in advance of the second reading in the House of Lords of the Asset Freezing (Compensation) Bill [HL] on 27 October 2017.

The Asset Freezing (Compensation) Bill [HL] is a private member’s bill introduced by Lord Empey (Ulster Unionist). The Bill received its first reading in the House of Lords on 26 June 2017 and is scheduled to have its second reading on 27 October 2017.

Between the early 1970s and the 1990s, Colonel Gaddafi’s regime in Libya provided support to the Provisional IRA in the form of arms, ammunition, financing, military training and explosives, such as semtex. For a number of years, the victims of IRA attacks carried out using such materials have been seeking compensation from the Libyan authorities. Campaigners have sought to fund such compensation using the former Gaddafi regime’s assets frozen in the UK following the 2011 uprising. Currently, it is estimated that almost £9.5 billion of assets from the Gaddafi regime are frozen within the UK’s jurisdiction.

The Bill seeks to use these frozen assets held in the UK to compensate the victims of IRA attacks carried out using materials supplied by the former Gaddafi regime. Specifically, the Bill seeks to impose restrictions on assets owned by persons involved in giving support and assistance to terrorist organisations in the UK, in order to secure compensation for UK citizens who are victims of those organisations. Lord Empey introduced a similar bill in the 2016–17 session, which did not receive royal assent as it ran out of parliamentary time in the Commons.

The Government has raised a number of objections to using the frozen assets to compensate victims. It has argued that the UN Security Council Resolution and EU regulations freezing these assets do not allow their ownership to be transferred to a third party. In addition, the assets can only be accessed under certain conditions, such as providing for the basic needs of the person sanctioned or for obligations arising under contract prior to the imposition of sanctions.

On 24 July 2015, the House of Commons Northern Ireland Affairs Committee launched an inquiry into the role of the UK Government in seeking compensation for the victims of IRA attacks that involved semtex and other weapons provided by the former Gaddafi regime. The Committee published its report on 2 May 2017 and is currently awaiting a response from the Government. This report argued that successive UK Governments had failed to “pursue compensation from Libya on behalf of the many victims of Gaddafi-sponsored terrorism” and suggested that they had missed a number of opportunities to pursue the matter.  It suggested that “time is running out for many of the victims” and urged the UK Government to begin direct negotiations with the Libyan authorities to agree a compensation package for the victims.