Russia (Sanctions) (EU Exit) (Amendment) Regulations 2025

Lord Callanan Excerpts

Monday 12th May 2025 Grand Committee

Overall, we support these measures. This is a critical time for Ukraine, given the diplomatic efforts—a time when we do not let up but send very clear signals that we understand that the Russian regime responds to clarity and strength, and will continue to test resolve and unity. We need to show that there is resolve and unity, and these measures, with cross-party support in the UK, are one element of that.

[Lord Callanan (Con)]

My Lords, it will come as no surprise to the Minister to know that we on these Benches continue to support strong, targeted sanctions in response to Russia’s illegal and brutal invasion of Ukraine. Since 2022, the UK, alongside our allies, has imposed an unprecedented range of sanctions to weaken Russia’s war machine. There are clearly some concerns; we would like to see further action taken, with regard to enforcement and the shadow fleet, et cetera—I agree with the previous speaker.

Despite these efforts, Russia has continued its aggression, often working through third countries and illicit networks to bypass existing sanctions. The persistence of these efforts underlines the importance of closing loopholes, keeping sanctions up to date and aligning with our international partners.

As the Minister set out, these provisions aim to tighten and expand the existing sanctions framework. One key element is the expansion of export-related goods, including chemicals, plastics, metals, machinery and electronics. It is clear that these have potential military applications, and we support their inclusion. Notably, even items such as video game controllers are now being restricted, due to their reported use in piloting drones. I suspect Russia probably will not have difficulty in obtaining those from other sources, but nevertheless it is important to make the effort. Can the Minister clarify how these additions were identified? How often is the department reviewing product categories to ensure that sanctions keep pace with technological adaptation?

The instrument also brings in new restrictions on the transfer of software and technology, not only physically, but through intangible means such as downloads and cloud access. This is an important evolution of the regime, particularly as cloud-based platforms become more central to global business and infrastructure. However, it does again prompt the question of how we are going to enforce such sanctions when there is no physical movement of goods. Does the Minister have confidence that our enforcement bodies have the technical capacity to monitor compliance with these intangible software restrictions? Are businesses being given clear guidance on what is now prohibited?

On import bans, we note the Government’s decision to sanction synthetic diamonds processed in third countries, building on the ban already in place for natural stones. While I suspect that Russia is not a major producer of synthetic diamonds, this appears aimed at closing a circumvention route. What evidence does the Government have that synthetic diamonds are being used to sidestep the existing sanctions on natural stones? How are we working with allies to enforce traceability and verification?

We also note the inclusion of helium and helium-3 in the list of banned imports. This, too, is framed as a pre-emptive step, anticipating the growth of helium as a potential revenue stream for Russia in future. Will the Minister please confirm whether there is current evidence of Russia scaling up helium exports, or is this purely a precautionary measure?

There are also some important technical clarifications in the SI, including the correction of omitted offences and clearer enforcement responsibilities across government departments. Although these may seem fairly minor, such details are vital to effective enforcement. Will the Minister please confirm whether further regulatory gaps are under review, particularly given the pace at which circumvention technology is evolving?

With those few questions, we support the intent behind these measures. They reflect an ongoing commitment to tightening the UK’s sanctions regime and maintaining pressure on the Russian Government. But sanctions can be only as effective as the enforcement and adaptation measures. As Russia continues to develop complex workarounds—from third-country trade to its unregulated shadow fleet—we, the sanctioning countries, have to be equally agile. That includes reviewing measures regularly, ensuring that departments have the capacity to act and strengthening international co-operation. In that spirit, will the Minister please say more about how the Government are assessing the real-world impact of sanctions—not just in terms of goods restricted but in terms of their broader economic and strategic effect on Russia’s capacity to wage war? We believe that these regulations are a step in the right direction, but they must be part of a broader, joined-up and rigorously enforced sanctions strategy.

[Baroness Chapman of Darlington (Lab)]

My Lords, I thank both noble Lords for their contributions and broad support for these measures. The measures introduced by this instrument show how the UK continues to use its powers to apply further pressure on Putin, to help secure an enduring peace and to show that we remain fully behind Ukraine.

This instrument is one part of a broader cross-government effort on sanctions. We are leading the way on sanctioning Russia’s shadow fleet and continue to target Russia’s military suppliers and kleptocrats. We are going after those who support Russia in circumventing UK and partner sanctions, using all the tools in our arsenal to stop the supply of critical military equipment to Russia. This has included designating bad actors re-exporting sanctioned Western goods to Russia and working with our allies to crack down on the illicit trade of advanced machine tools.

We will continue to engage with our financial institutions and businesses so that they have the information they need to comply with our sanctions. The Government are committed to ensuring robust sanctions enforcement. To this end, with the support of ministerial colleagues, we launched a cross-government review of sanctions at the first small ministerial group on enforcement in October. The review concluded in April and—I think this will be of interest to noble Lords opposite—Parliament will shortly be updated on the review conclusions, alongside publication. I think that will involve a Statement to Parliament; I am not completely sure but, if it does, perhaps we could get into those issues a bit more at that point.

On the issue of the OTSI and HMRC, and how that operates in practice, I am very happy to organise another briefing for any noble Lords who are interested; that is a really good suggestion. I expect that it will be quite in-depth and technical; I know the noble Lord would like nothing better than that, so we will make sure that it happens as soon as we can arrange it.

We work very closely with partners on the shadow fleet. The noble Lord alluded to diplomatic efforts. We raise these issues constantly; I myself have raised them with partners who have had vessels involved in this, and they have taken action as a consequence of that. Sanctions are an important tool that we have, but they are far from the only tool.

Both noble Lords were quite right to remind us how important enforcement is. Although we do not comment on future designations, clearly, we keep all of this under review. We are looking at any regulatory gaps that there may be, and we will continue to take further measures as and when we need to; I do not anticipate that this is the last time we will stand here introducing these sorts of measures. I thank both noble Lords for their consistent support on these issues. I agree with what the noble Lord, Lord Purvis, said on the issues of the ceasefire and the behaviour of Putin. I thought that his remarks about Zelensky were well made, and I agree with them.

The UK has transformed its use of sanctions. The Government are committed to continuing to strengthen the effectiveness of our sanctions regimes, their implementation and enforcement; and to reviewing their ongoing appropriateness in changing foreign policy contexts. We will continue to put pressure on Russia, as it is now time for Putin to come to the table and for Russia to show that it is serious about ending the war—or face the consequences. Once again, I thank noble Lords for their contributions and for the continued cross-party support for the sanctions regimes.