A consortium of reinsurers had tried, unsuccessfully, to trace funds owned by the Syrian state and its agents. The funds are frozen as a result of sanctions, and if the reinsurers could locate them, they would ask the Government to release an amount to satisfy a judgement in their favour, as is permitted by the relevant law.
The reinsurers believe Treasury knows where the funds are, but Treasury says it is not permitted to reveal this information to them. The reinsurers, having obtained judgment, believe the assets were frozen in the UK, and made an FOIA request to Treasury. Treasury refused the request. The relevant Regulations (in common with other sanctions legislation), state that information which would “facilitate compliance with this Regulation” must be provided to Treasury. Treasury said that the information it receives must be used only for the purposes for which it was provided or received, and that “facilitating compliance” with the Regulation does not include facilitating a request for release of funds to a judgement creditor.The claimants complained to the ICO, which dismissed the complaint, sharing Treasury’s view on the grounds for refusal. The claimants then brought a further request, offering confidentiality undertakings around the use of the information sought. Treasury refused the request.
The claimants then approached HSBC for help, believing HSBC may have had some information which would have been helpful, and obtained an order for require HSBC to help when it refused to do so. HSBC subsequently found nothing of help.
The reinsurers brought the matter to court. They made a number of claims, of which the relevant one was that Treasury had misconstrued the Regulation. The parties agreed that, because the relevant law is essentially an EU instrument, a purposive interpretation is appropriate. The claimants said that in passing on the information they requested, Treasury would be facilitating compliance with the Regulation, because this would help it to decide a request to release funds as permitted by the Regulation. They argued that the restriction cannot sensibly prevent any other use of the information as, for instance, information provided about a loan could not then be used to identify relevant bank accounts – and this would hamper compliance. They said that given Treasury accepted that it could use the relevant information to decide whether to release funds, it could surely provide that information to the claimants. Treasury’s contrary argument focussed on the need for privacy.
The Court held that the starting point should be to recognise the purpose of the Regulations is to make life difficult for those engaged in repressive practices; and that the Regulations comprise sharp edged punitive measures, tempered by exceptions and derogation to moderate their impact. The judge saw no good reason that the Regulations should not achieve a balance between the two. On a basic level, innocent people should not suffer unnecessarily – hence it could not be an appropriate interpretation to deny humanitarian reliefs. He went on to say that, while commercial reinsurers would appear to be an unlikely category of innocent civilian victim, they are not conceptually in a different position to civilians deprived of supplies, although of course suffer a lesser hardship.
On that basis, the Court did not accept Treasury’s view of the construction of the relevant provision. Nor did it find compelling Treasury’s arguments on the “purpose” of provision of the information. It found that rights to privacy, secrecy and data protection would be adequately safeguarded.
As a result, the Court found that Treasury has the power to provide the information the claimants requested and that the Regulation did not prevent it from doing so. The issue was remitted back to Treasury for reconsideration.