Policy paper

Protected material definition under Schedule 3 to the Counter-Terrorism and Border Security Act 2019: National Security Bill factsheet

Updated 19 August 2024

Summary/key points

• An amendment is required to strengthen the hostile state activity ports examination power, Schedule 3 to the Counter-Terrorism and Border Security Act 2019, that will allow counter-terrorism police and MI5 to progress operations and investigations at the required pace to detect, disrupt and deter states who are engaging in hostile activity against the UK.
• The change will replace the requirement for the Investigatory Powers Commissioner to authorise the retention of confidential business material with a new Counter-Terrorism Police authorisation procedure, which will require an officer of at least the rank of superintendent to authorise access to such material.

Background

• The Government is amending the primary legislation for the retention powers under Schedule 3 to the Counter-Terrorism and Border Security Act 2019 by changing the definition of “protected material” to no longer include confidential business material. Under Schedule 3 the definition of confidential business material falls within the definition of “protected material” and includes material that has been acquired in the course of a trade and is held in confidence.
• Under Schedule 3 authorisation is required from the Investigatory Powers Commissioner (the Commissioner) to retain and use copies of protected material. It can take Counter-Terrorism Police up to 6 weeks to apply for authorisation and to receive a direction from the Commissioner as to whether the copy should be destroyed or can be retained and used. This can obstruct the ability of Counter-Terrorism Police to move forward with investigations relating to National Security at the required pace.
• The change will bring Schedule 3 into line with Schedule 7 to the Terrorism Act 2000, by removing the requirement for the Commissioner to authorise the retention of copies of confidential business material.  That requirement will be replaced by a new authorisation procedure in the Code of Practice, which will require a police officer of at least the rank of superintendent to authorise access to such material.
• This new superintendent authorisation model has proven to be an effective safeguard under Schedule 7 which avoids undue bureaucratic burdens on the system. Applying the superintendent authorisation model to Schedule 3 will bring significant efficiencies while still providing a highly effective safeguard.

Definition of protected material and confidential business material

The definition of “protected material” under Schedule 3 includes confidential business material (material that has been acquired in the course of a trade and is held in confidence), and legally privileged material under the Police and Criminal Evidence Act (PACE) 1984. It also includes confidential journalistic material as defined under the Investigatory Powers Act (IPA) 2016. The amendment to Schedule 3 will only affect the treatment of confidential business material under the power.

What does the new superintendent authorisation process achieve?

• Applying the superintendent authorisation model to Schedule 3 will bring significant efficiencies to the use of the retention power while still providing a highly effective safeguard.
• The current authorisation process prevents a broad category of business documents from being considered as part of a counter-hostile state activity examination in the required timeframes.
• This change will allow Counter-Terrorism police to expedite investigations relating to hostile state actors involved in activities such as espionage, who may be concerned with the acquisition and collection of information that is generally unavailable to the public, such as business contracts.

How will the new Superintendent Authorisation process work?

• During an examination, if an examining officer has reasonable grounds for believing that the article or copy consists of or includes confidential business material the examining officer must obtain authorisation from at least the rank of superintendent in order to copy it.
• The examining officer will only be able to retain a copy of confidential business material if the superintendent is satisfied that the material can be retained securely, and it will only be used for as long as it is necessary for a relevant purpose.

Will there be any other changes to the safeguards for confidential business material?

• Under this amendment, to authorise the retention of a copy of confidential business material an examining officer must obtain authorisation from an officer at least the rank of superintendent.
• To authorise the retention of a copies of confidential material they will need to be satisfied that there are sufficient arrangements in place for copies of the material to be retained securely and that material will only be used so far as necessary and proportionate.
• Where authorisation is not given, but the examining officers believes it necessary to consider any non-confidential material within the copy, the material must be separated by using the independent sift and review process, which is set out in the Code of Practice.

What material will be subject to the new superintendent authorisation safeguard?

• Only copies of confidential business material, material that has been acquired in the course of a trade and is held in confidence, will be subject to the new superintendent authorisation safeguard.
• Authorisation from the Investigatory Powers Commissioner will still be required for confidential business material where a physical item needs to be retained, or where a copy includes personal business records. Authorisation via the Investigatory Powers Commissioner will also remain the requirement for legally privileged and confidential journalistic material, whether articles or copies.

Case study

The type of individual that may be stopped under Schedule 3 could be:

• An individual who is aware of particulars relating to the imminent planned acquisition of a sensitive UK materials company by a foreign state. Confidential business information obtained would provide Counter-Terrorism Police with tactical information to intervene in this sale and prevent the transfer of sensitive information.
• An individual in possession of commercial documents outlining a state-backed disinformation campaign to discredit a UK-manufactured vaccine and details of those involved. The information obtained would enable HMG to counter this proposed plan

In each of these cases the information is time-critical to be able to act to counter potentially damaging activity. The requirement to wait up to 6 weeks could severely impact the ability to identify the risks posed, and to plan and execute an appropriate response.