One of the most corrosive effects on political freedom during the “war on terrorism” has been that caused by material support legislation. Such legislation exists in the US and EU (both at national and EU level) and has differing scope in each jurisdiction. In summary, it criminalises the provision of a wide range of support to individuals and groups that are considered as ‘terrorists’ according to various authorities. Thus, it can be illegal to provide funds, training, personnel, services or political support to a listed group or individual. In recent months there have been judgments on such legislation on both sides of the Atlantic. M (FC) & Others v HM Treasury is a judgment from the European Court of Justice on foot of a preliminary reference from the House of Lords. Holder v Humanitarian Law Project is a decision (6-3) of the US Supreme Court on the validity of US material support legislation. Today I’ll examine M & Others while tomorrow I’ll move on to Holder.
The Kadi case on EU implementation of UN sanctions against individuals linked to the Taleban, al-Qaeda and bin Laden has resulted in every EU law scholar (and many international law scholars) getting out their pens and scribbling an opinion. However, while Kadi has been the headline case, there has been a growing volume of litigation surrounding the sanctions regime. The case of M & Others v HM Treasury has recently been before the Court of Justice on a reference from the House of Lords. The case concerns several spouses of individuals listed by the EU. The applicants are entitled to various forms of social security payments for themselves and their children under UK national law. However, HM Treasury argued that such payments are caught by the sanctions regime as the indirect provision of resources to listed individuals. As such the payments were subject to a draconian licensing regime that required the applicants to comply with an invasive regime of financial surveillance including a strict limit on cash transactions and the reporting of all household finances to HM Treasury. The dispute did not centre on the provision of benefits per se, but rather on whether the benefits were caught by the sanctions regime and thus whether the licensing system was necessary.
Following domestic litigation, the decision was taken by the (then) House of Lords to refer the matter to the European Court of Justice. In making the references, the Lords expressed their own opinion that the social security payments fell outside the scope of the Regulation. Their conclusion was based on the purpose of the law – the prevention of funds being made available to listed persons who might use those funds for terrorism. As the social security payments could not be used in this way the House of Lords believed that they fell outside the scope of the sanctions regime. However, in light of its grounding in EU law, the matter was referred to the ECJ.
The European Court largely agreed with the referring Court. The ECJ rejected HM Treasury’s argument (which had been upheld in both the High Court and Court of Appeal) that the strict terms of the Regulation caught the social security payments and therefore necessitated the licensing system. The Court noted that different language versions of the Regulation pointed to different interpretations and therefore a strict textual approach was not appropriate. Instead the Court took a purposive approach akin to that of the House of Lords and held that the payments fell outside the scope of the Regulation. In doing so it rejected the argument that by providing for their spouses’ basic needs, the applicants would free those spouses to use other funds for terrorism (any such other funds would, of course, be subject to the sanctions regime). The judgment represents a welcome continuation of the European Courts’ efforts to curtail the worst effects of a sanctions regime that can best be described as an affront to the rule of law.
UPDATE 13 July: See Part 2 here.