Sanctions

Caroline Nokes Excerpts

Wednesday 14th May 2025 Commons Chamber

[Stephen Doughty]

The right hon. Gentleman asks an important question. We take up all possible avenues of limiting Putin’s war machine and the energy revenues that go towards it. We keep all options under consideration, and we look at them carefully. As he knows, I will not comment on any future actions or designations for obvious reasons, but I can tell him that this action on the shadow fleet has had a significant real-time impact on Putin’s ability to wage war. I have given this figure on a number of occasions, but our sanctions programme overall has denied Russia $450 billion, which would have been enough to keep this war going for many more years. The action has had a tangible impact. Action taken under the last Government, and the action taken by this Government, which has been accelerated, is having a real impact on Putin’s war machine. Again, I thank the right hon. Gentleman for his consistent support for Ukraine, and his support for these measures.

We are absolutely committed to securing a just and lasting peace in Ukraine. Maximising economic pressure on Russia is key to that, which is why we are continuing to introduce sanctions. We have now sanctioned more than 2,400 entities and individuals under the Russia regime. UK sanctions have also frustrated Russian trade: Russian imports to the UK have fallen by more than 98% since the invasion, and UK exports to Russia are down by more than 80%. We will maintain the relentless pressure on Putin, alongside our allies, to force him to the table and ensure that he engages seriously in negotiations. We reiterate our call on Russia to accept a full, unconditional ceasefire in Ukraine in order to create the space for talks on a just and lasting peace, and we commend President Zelensky for making his own commitment to peace by expressing his openness to engaging in direct talks with Putin. On Monday, the Foreign Secretary hosted Foreign Ministers from the Weimar+ group of key European allies to discuss our joint efforts to strengthen European security and secure a just and lasting peace in Ukraine. The House can be assured that these conversations form part of all our engagement with partners and allies across the world; indeed, I had such conversations today.

Now is the time for Putin to come to the table, and for Russia to show that it is serious about ending this war or else face the consequences. The UK stands ready to ratchet up the pressure on Russia, so that it ends its brutal war of aggression. As I have said, we will continue to explore all measures through which we can ratchet up economic pressure. The statutory instrument allows us to go even further in our efforts to target Russia’s revenue streams and prevent the Kremlin building its military and industrial capabilities. It introduces a package of more than 150 new trade sanctions, including new, innovative measures that will prevent UK expertise from being used in Russia’s defence and energy sectors. It will deny Russia sophisticated UK technology and software, and will expand our prohibitions, with the aim of further constraining Russia’s economic growth and ability to fuel its war machine.

Let me deal with each of the measures in the instrument. First, it introduces new export prohibitions that apply to a wide range of goods, including chemicals, plastics, metals, machinery and electronics. These prohibitions will deny Russia the means of procuring products that have military and industrial uses. Secondly, we are extending our prohibitions on the transfer of technology, applying them to a broader set of technologies relating to goods that are important for Russia’s military-industrial sectors, and for its economic development. Through these measures, we are removing UK expertise—whether in intellectual property, blueprints or industrial know-how—from Putin’s critical supply chains.

Thirdly, the instrument will ban the transfer of software relating to business enterprise, industrial design, and oil and gas exploration and production. As has been said, Putin relies on energy production and exports to fuel his war economy, so the aim of these sanctions is to make key sectors of the Russian economy less productive and therefore less able to fuel this illegal and barbarous war against Ukraine. Fourthly, we are banning the import of Russian synthetic diamonds that have been processed in third countries, and helium. This targets future funding sources that Russia is developing, as well as potential circumvention routes. Finally, the instrument clarifies the enforcement responsibilities for a small number of trade sanctions on Russia. This will enable the office of trade sanctions implementation in the Department for Business and Trade to enforce certain trade sanctions offences, and to refer serious offences to His Majesty’s Revenue and Customs for criminal enforcement consideration.

This Government remain committed to European security, and to our steadfast support for Ukraine. We are committed to standing up for the values of democracy and the rule of law, values that continue to be attacked so brutally by Russia. Sanctions, including this important package, are a key part of our efforts, and I commend the regulations to the House.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.

[Wendy Morton (Aldridge-Brownhills) (Con)]

We on the Opposition Benches support this statutory instrument and all measures that bear down on Putin’s regime and undermine his ability to prosecute the barbaric, illegal invasion of Ukraine. We support the further measures on technology transfers and software, and on diamonds and chemicals, and the other measures to tighten the import and export regimes. Of course, all of those are built on the critical mass of sanctions introduced by the Conservative Government. Working with allies, we imposed the largest and most severe set of sanctions that Russia had ever seen, in order to cripple Putin’s war machine. We sanctioned around 2,000 individuals, companies and groups.

All of us should be in no doubt that the economic pressure that we and our allies have been exerting means that Russia cannot afford to sustain the cost of this illegal invasion. Indeed, Russian interest rates are at levels not seen for decades, and welfare payments are being cut. The international community’s sanctions have deprived Putin of $400 billion since February 2022—money that Russia could otherwise have spent on the war in Ukraine.

On that note, I want to push the Government on four points, because we must strive ceaselessly to constrain Putin’s war machine and never see our actions as an end state. First, we recognise that some measures in today’s SI will deal with specific issues relating to third countries, but can the Minister confirm whether his Department is currently looking into wider secondary sanctions? If so, what is the scope? What kind of diplomatic engagement is he having with countries whose economies are being used to circumnavigate the international sanctions response, and what measures is he considering on the big-ticket issues that are well understood in this House?

Secondly, when is the Minister’s internal deadline for getting the proceeds from the sale of Chelsea football club out the door, and how exactly does he envisage the money being spent? Can he update us on the Foreign Secretary’s engagement with the trustees, the Government of Portugal and the European Commission on this issue? We need to act with urgency, because we are talking about more than £2 billion. It goes without saying that this money could be a huge boost to the humanitarian effort supporting those affected by the invasion.

Thirdly, can the Minister explain why the £2.26 billion loan to Ukraine, backed by the profits of sanctioned Russian assets, will be paid by the Treasury over three years rather than in one immediate instalment, especially given that it is earmarked for military equipment? Can he confirm, with a simple yes or no, whether work is actively ongoing in the FCDO and the Treasury to find additional legal solutions to allow for the mobilisation of sanctioned assets?

Finally, there has been much commentary in recent weeks about initiatives to secure peace, but we urge the Government—in the strongest terms—to leverage Britain’s influence in every way that they can to help ensure that peace is secured on Ukraine’s terms. As has been the case from the outset, it remains ultimately for Ukraine, as a proud and sovereign nation that has sacrificed so much to defend itself and the fundamental freedoms that we all hold dear, to decide its own future.

Of course, we want this terrible war to be brought to an end. Like President Zelensky, we hope for a lasting, reliable peace, but the Euro-Atlantic community must continue to be robust in the face of Putin’s aggression. The lesson of the past 20 years is clear: he only comes back for more. Today we have the added threat that the axis of authoritarian states is collaborating to wreak destruction on our continent, with Iran providing weapons and North Korea providing troops to support Putin. We even understand that a number of Chinese civilians are supporting Russia’s campaign. The stakes could not be higher, but there remains nothing inevitable about a victory for Russia, which thought it could capture Kyiv and subjugate Ukraine within days. Three years on, the cost to Russia has been enormous and unsustainable.

We acknowledge that the UK Government are now proactively seeking to end the war through negotiations and that this takes UK policy on Ukraine in a new direction, but we must also remember that we and our NATO allies have a collective GDP that is 20 times greater than Russia’s, and a collective defence inventory that is many times larger than Putin’s. The Ukrainians are fighting valiantly, and we must ensure that they have the capabilities they need in their hands and the diplomatic support they require. The Government need to bring allies with us in supporting Ukraine to achieve a just and fair peace on its terms.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Stephen Doughty]

The hon. Gentleman might have missed it earlier on, but I outlined the significant work that we have done on that, including targeting hundreds of vessels, which is having a real impact. I will come to that impact in a moment.

The shadow Minister, the right hon. Member for Aldridge-Brownhills (Wendy Morton), asked a number of specific questions. She asked about third-country circumvention and the measures we are taking diplomatically—

[Madam Deputy Speaker (Caroline Nokes)]

Order. We must now take the motion relating to deferred Divisions.

DEFERRED DIVISIONS

Motion made, and Question put forthwith (Standing Order No. 41A(3)),That, at this day’s sitting, Standing Order No. 41A (Deferred divisions) shall not apply to the Motionin the name of Stephen Doughty relating to Sanctions.—(Kate Dearden.)

Question agreed to.

[Stephen Doughty]

Thank you, Madam Deputy Speaker. I had forgotten about that particular procedural aspect of talking past 7 o’clock. Thank you for giving me the eye to remind me that that was coming; I appreciate it.

As I was saying, on third-country circumvention, the shadow Minister asked me what measures we are taking. I can assure her and the House that this has been an extremely high priority for me and the Foreign Secretary. I regularly raise issues and we have a number of countries that we are particularly focused on. We have the common high priority list of items that are of most value to Russia’s military industrial complex. I assure her that we have also taken robust action against entities and individuals who have been involved in those matters. We have set out a number of those measures in past sanctions packages. I raise them on an almost weekly basis to try to bear down on that.

The right hon. Lady asked about the proceeds from Chelsea football club. We are determined for the proceeds to reach humanitarian causes in Ukraine as soon as possible, and we are doing everything we can to bring that about quickly. The shadow Minister will understand that this is a complex legal issue, but we are working with our international partners. We have engaged with Abramovich’s team and we are exploring all options to ensure that the proceeds reach vulnerable people in Ukraine who are most in need.

The right hon. Lady asked about the tranches of the ERA funding. I can assure her that two of the tranches, over two thirds of that funding, is already out the door. I spoke to Ukrainian Ministers about that and its availability, and they confirmed that they had access to it. She asked a detailed question about why it is being done in three tranches. I have just written to the shadow Foreign Secretary to set that out in more detail. We can make sure that she gets a copy of that letter. There are technical and other reasons for that, but we are ensuring that Ukraine gets what it needs right now, and is able to plan and deliver in its own defence.

The right hon. Lady asked, as others did—it was raised by the Liberal Democrat spokesperson, the hon. Member for Lewes (James MacCleary)—about Russian sovereign assets. I repeat what I said to my friend the hon. Member for Strangford (Jim Shannon), which is that we are working at pace on that with others. We are exploring all lawful options to ensure that Russia pays. We have been leading; we have not been lagging. Indeed, the ERA loan is very much a testament to our leadership on this issue and I can assure the Liberal Democrat spokesperson that we are engaging very closely with international partners on that, as the Foreign Secretary said yesterday.

The right hon. Member for Aldridge-Brownhills (Wendy Morton) rightly talked about the importance of continued and absolute support for Ukraine. I can assure her that that is the case, particularly at this time. The leadership shown by President Zelensky, President Trump and others in seeking an unconditional ceasefire and a just and lasting peace is crucial. We will continue to work with them on that and we will continue to support Ukraine in its endeavours. She rightly drew attention to the activities of others—North Korea, Iran and others—in supporting Russia’s barbarous actions. We have taken action on many of those things.

The hon. Member for Lewes raised a couple of other points. On enforcement, I hope to have more news imminently and to be able to update the House on those matters. I promised that we would undertake an important review on the enforcement of sanctions across Government. It has been a crucial piece of work, which was rightly raised by many people. I hope we will have more to say on that very soon. I would also point him to the illicit finance and kleptocracy campaign led by the Foreign Secretary and me. We are taking a series of measures, working with Departments across Government, to ensure that London, our country and our wider British family are not used to support kleptocrats and those contrary to our national interests, or indeed Ukraine’s interests in this specific case.

The hon. Gentleman raised the important role of the Council of Europe. I completely agree with him. My ministerial colleague the noble Lord Collins is currently attending a meeting of the Council of Europe’s Committee of Ministers. We have taken important work there—not only on the register of loss and damage, but on crucial issues such as the special tribunal against Russian aggression, as the Foreign Secretary spoke about yesterday.

There were, rightly, a number of questions about the impact that these sanctions are having. The impact is substantial: the Russian Government have been forced to take their first major tax hike in more than 20 years, and, following a loss of $7.6 billion in 2023—its first loss in 25 years—Gazprom, one of Putin’s main sources of incomes, lost $12.9 billion in 2024. Russian oil delivery now takes significantly longer due to sanctions, showing how they and the work on the shadow fleet have disrupted and impeded Russian trade.