In the Media

Personal view: How the NatWest three were 'trumped' by the US and UK

PUBLISHED June 29, 2006

During the passage of the Extradition Act 2003 through Parliament, Home Office ministers emphasised an important safeguard. No person could be extradited if his removal would be incompatible with the European Convention on Human Rights. Extradition on demand? No, they said. We may have a lopsided treaty with the US, but do not fear, MPs and noble Lords were told. UK citizens have solid "human rights".

The most obvious right applying to David Bermingham, Giles Darby and Gary Mulgrew is Article 8. In practice it has meant nothing.

Article 8 declares that "everyone has the right to respect for his private and family life, his home and his correspondence". There shall be no interference with this right except where it is "necessary", for, among other things, "the prevention of disorder or crime?".

We can agree that if a person commits a crime in country A, flees and settles secretly in country B, his extradition will normally qualify as a "necessary" interference with the right. But the three NatWest bankers are accused by the US authorities of conspiring to defraud their London employer. The alleged loss, witnesses and documents are in London. The men have their homes, families and businesses here.

Why, then, should their extradition be thought to be a "necessary" interference with the right to private and family life? To the US and UK authorities the answer is simple. There is to be no trial of the allegation here. But that is because NatWest Bank has never claimed to be defrauded. Disengaging itself of various joint ventures with Enron in 2000, it sold a highly volatile financial asset for $1m to a company which the defendants had an option to buy, which they later exercised. The US authorities allege that the later disposal of the asset for $7m proves that NatWest Bank (now Royal Bank of Scotland) was defrauded of $6m.

However, after the three bankers reported the transaction themselves to the Financial Services Authority in November 2001, the FSA asked RBS to revalue the asset. It confirmed, on examination, that it had sold the asset for the appropriate price. It continues to extend the men and their businesses substantial financial services, though it refuses to give the men any information to use in their defence. They are on their way to a Texas court, their family lives and businesses shattered, because the "victim" says he has lost nothing. They were charged in the US, as is widely acknowledged, because it was thought they would in true American style plea bargain and implicate Enron suspects with whom NatWest had done other dealings. Instead, a senior Enron figure, Kopper, surrendered himself, and blamed everyone suspected by the investigators, including the three bankers, to save himself from decades in prison.

In the High Court extradition proceedings last year, the Home Secretary, the SFO and Attorney General argued, contrary to what Parliament was told, that extradition was an important weapon against crime and Article 8 could only be invoked in (undefined) "exceptional circumstances". The Attorney General went further. Through counsel he submitted that extradition arrangements had such prominence that the right to private and family life would always be "trumped".

After three months' deliberation, the High Court agreed that only exceptionally would a person be able to contest extradition by relying on Article 8. The judges referred to House of Lords decisions involving the deportation of illegal immigrants, applying this test. Those cases make occasional reference to the same principle in relation to extradition cases but only in the context of true fugitives, as does the solitary Strasbourg case on the point. No court in the UK or Europe has considered the application of Article 8 where a state seeks to extradite a foreign national for a crime against a victim in the state where he lives.

The UK is the only state in Europe which shows such astonishing tolerance to the aggressive US criminal justice system. Almost every state refuses to extradite its own nationals to the US, reserving to themselves the responsibility for prosecuting their own citizens for crimes wherever committed. Even the EU instrument setting up the European arrest warrant scheme permits a state to refuse extradition if it considers that the crime alleged was in substance committed in its own territory, or where it has decided not to prosecute.

The official UK attitude to US federal prosecutors is deferential, even obsequious. It is indifferent to the rights of its own citizens. At its heart lies a deeper problem: a refusal to countenance any set of principles for determining where a crime which could be tried in more than one country should be dealt with. Deals are done between investigators but according to no objective criteria. The EU, in fact, is in the process of formulating such open criteria, sensitive to Article 8, between members.

There is no sign that the UK will adopt such principles in the case of the US. We are sub-contracting an important part of our criminal justice system to the Americans. The City's activities are transnational. Any email or communication across a US boundary, as there was in this case, exposes a person to a US indictment, for a fraud said to have been committed anywhere in the world. Extradition of company directors and businessmen from the UK can now be procured without evidence, without Article 8 protection, even if no one outside the US thinks the matter is criminal.

An international financial concern wishing to settle in London should think again. Try Paris or Frankfurt. There, they believe in independence and legal sovereignty.

Alun Jones QC represented the three bankers