Russia: Sanctions

Lord Purvis of Tweed Excerpts

Tuesday 1st February 2022 Lords Chamber

[Lord Collins of Highbury (Lab)]

My Lords, I welcome this Statement. I hope I can show a bit of unity with the Minister and he will not get so upset.

This House remains united in solidarity with the people of Ukraine, and we continue to support the principle of sovereignty in the face of aggression. Any sanctions must be targeted and extensive if they are to be the most effective. We must take aim at corrupt elites and comprehensively cover the most crucial sectors of the Russian economy. However, as much as it is welcome that the Government are preparing for these measures, I am concerned that they will not be paired with much broader measures needed to crack down on illicit Russian finance in the United Kingdom.

The noble Lord, Lord Ahmad, wrote to me on 9 December following my questions relating to the full implementation of the ISC Russia report. In that letter, the noble Lord refers to a “cross-government Russia unit” but gives very little detail. Of course, the ISC said that there appears to be a plethora of plans and strategies with direct relevance to the work on Russia by the organisations it oversees. The integrated review acknowledged the need to bring together elements of our work across the strategic framework at home and overseas, using all the instruments available to government in an integrated response. I hope that this afternoon the Minister will be able to tell us what has happened and where the details are on this strategic framework approach.

Six months ago, the Government said that they were finalising their report into how more than 700 Russian millionaires were fast-tracked for British residency via their so-called golden visa scheme, yet in response to Stephen Kinnock yesterday, the Foreign Secretary simply said:

“We are reviewing the tier 1 visas that were granted before 5 April.”—[Official Report, Commons, 31/1/22; col. 60.]


It is shocking that the Foreign Secretary did not have a proper answer to my honourable friend’s question. We have been giving out these visas to thousands of Russian oligarchs. Some £4 million has been donated to the Conservative Party by seven individuals who have deep and highly dubious links to the Kremlin. Can the noble Lord tell us what action the Government will take on the visas, and when they will do so? More importantly, when will we see the economic crime Bill, which will be so necessary to ensure a joined-up approach on these issues? When will the Government consider introducing a register of overseas entities Bill, foreign agent registration laws or new counterespionage legislation? We are still lacking detail on when we can expect Bills—which have previously been announced—to repair the gaping hole in our defence. Will the noble Lord tell the House when we can expect the promised computer misuse Bill and the counter-hostile state Bill to be brought to the House? Can the Minister say when the Government’s cyber co-ordination centre will be operational to help tackle these threats? These are all actions required to be taken urgently.

I believe that, to be successful, sanctions must form part of a unified and coherent response across our allies, and I understand that the noble Lord shares this aspiration. Can he say what steps we are taking to work with the G7, NATO and the OSCE to ensure that we act in unison with all our allies on these important matters?

Sanctions are always effective deterrents, but the Government must also pursue a diplomatic solution. I mentioned yesterday, in response to the Statement on the Sue Gray report, that I found it pretty shocking that the Prime Minister cancelled his phone call to President Putin at a time when such talks are vital to peace and security. Can the Minister say this afternoon when the Prime Minister will make sure that those discussions take place? Will that call be rearranged? It is vital that we have answers to all these questions.

[Lord Purvis of Tweed (LD)]

My Lords, I put on record my appreciation for the Minister telephoning yesterday and alerting me to the Statement. He is courteous and approachable, and it is very much appreciated. I hope that his overseas visit was a success. However, as the noble Lord indicated, a telephone meeting with President Putin was postponed and a maskless Foreign Secretary contracted Covid and was unable to travel. It is embarrassing to me, and perhaps others, that the whole world now follows what we see at home: failures in leadership and an increasingly grubby Government.

However, we support moves to shore up the ability to ensure that there is a severe economic response to unwarranted Russian aggression towards Ukraine. Two weeks before Christmas, the EU and the US reached an agreement on what expanded economic sanctions would be. Our announcement, which is welcome, is a consequence of this. But, as with most things, it has a little bit of overselling attached to it.

UK FDI stocks in Russia are currently £12.3 billion —an increase of 25% during Liz Truss’s tenure as International Trade Secretary. Since the unacceptable invasion of Crimea, UK FDI stock in Russia has gone up by 50%. What actions will the Government take to stem this flow? I previously asked what contingency arrangements are in place for guidance for UK businesses that are currently conducting legitimate business that will become illegitimate as a result of any actions. The European Central Bank has done a sensitivity study with banks on exposure to Russia. Has the Bank of England done the same? What guidance is being provided to global oil and energy trading and shipping insurance with trade with Russia, which is primarily done through the City of London and will be the target of US and other sanctions?

Can the Minister explain why economic crime has been downgraded in the UK over the last few years? When Ben Wallace was Minister of State for Security, he was Minister of State for Security and Economic Crime. Damian Hinds is Minister for Security and Borders. There is no Minister for economic crime. As my noble friend Lady Ludford said yesterday, although the Foreign Secretary has said that there will be “nowhere to hide” for Russian oligarchs and their money, they have been hiding in plain sight in Chelsea, Belgravia and Mayfair.

As a December report from Chatham House indicated, the grim details of London’s world centre of kleptocracy have created a wider malaise in England’s legal system. Given this Conservative Government’s inactivity, so clearly identified in Parliament’s Intelligence and Security Committee reports over many years, it is legitimate to ask whether the Government are crying wolf again.

Yesterday, the Business Minister was unable to give details of what will be in the economic crime Bill. The noble Lord, Lord Young of Norwood Green, asked the Home Office Minister, the noble Baroness, Lady Williams, why there have been

“few, if any, successful prosecutions”

on unexplained wealth orders. She replied:

“There have been some, and as I have explained to the House, it is quite complex and sometimes these things are very difficult to secure. There is more work to be done.”


Of course these are difficult and complex matters, but they will not be less so next week. Therefore, that is not an excuse for inaction.

Referring to President Putin, the noble Lord, Lord Austin of Dudley, asked:

“given that he has invaded Crimea, assassinated his opponents here in the UK and looted Russia’s economy, thereby impoverishing … Russian citizens, why have the Government not considered doing this anyway?”

Under the anti-corruption regulations, those that will be in scope under the new measures are currently in scope for sanctions. The Minister replied:

“The noble Lord is absolutely right. I am not party to some of the discussions going on in the FCDO and elsewhere, but he highlights the point that we have a major problem with regard to the influence here.”—[Official Report, 31/1/22; cols. 617-18.]


I think that the whole House welcomed that admission, after months of denials by the Government. We have a major problem, and if we are now being asked to put in place new measures, which may well be welcome, we have legitimate questions to ask about this Government’s motivation to properly clamp down on those who are doing us harm.

Will the Government finally accept the case for fast-tracking beneficial ownership legislation and the Bill that has been introduced in the Commons by Layla Moran MP? Will they urgently accept the amendments on golden visas proposed by my noble friend Lord Wallace of Saltaire? If the Government are serious about this, they have two key opportunities now—will they take them?

[The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, first, I thank both noble Lords for their support. I fully accept that it is right that we are challenged with questions as Ministers and on important issues such as the situation in Ukraine. It is important when we look towards Ukraine that the Government, together with all parties and voices across both Houses of Parliament, come together in calling out the challenging and ever-increasing presence of Russian troops, almost in a crescent shape, across Ukraine and Belarus; this is causing particular concern in the eastern part of the country. There is also the annexation of Crimea, of course.

Notwithstanding us having just done a Question on ministerial travel and where Ministers wish to work— as I said to the noble Lord, Lord Anderson, it is a requirement that we work beyond what we may be conducting in our business—I am grateful to both noble Lords. I also sought to call the noble and learned Lord, Lord Judge. I hope that he received the message I had to leave for him; I regret that I was unable to speak to him in advance.

The noble Lords, Lord Collins and Lord Purvis, rightly asked questions on various issues of illicit finance. I will certainly outline some of the steps that the Government have taken on the specific issue of the economic crime Bill, which was raised by both noble Lords. This also came up in the other place with my right honourable friend the Foreign Secretary, and my right honourable friend the Prime Minister reiterated, during the democracy summit, the Government’s commitment to seeking to introduce it this year. I assure noble Lords that I have also made sure, in terms of my own responsibilities at the Foreign, Commonwealth and Development Office, of the importance of this Bill.

In terms of what the noble Lord, Lord Purvis, raised about what will be in the Bill, the Government have already, as he will be aware, produced the national economic crime plan; there are various elements within that. We created the National Economic Crime Centre in 2018 and, including previous legislation, there was the ground-breaking Criminal Finances Act 2017. In addition, the recent UK spending review announced new investment of £18 million in 2022-23 and £12 million per year in 2023-25 for economic crime reforms, as well as £63 million to reform Companies House, which will go in part towards addressing some of the issues that noble Lords have raised, on beneficial ownership in particular.

I note the Bill that the noble Lord, Lord Purvis, pointed to. Of course, the Government are committed. I took through the legislation—with the noble Lord, Lord Collins, as I recall, on the Opposition Benches—of the SAMLA Bill. We gave a commitment and continue to work, for example, with our overseas territories. We have exchange of notes operational with key members of the overseas territories family, but they are all now committed to ensuring that operational public registers are fully functional by 2023.

Sanctions were mentioned, which I also want to bring into the context of the point that the noble Lord, Lord Collins, raised about Russia. When we introduced the global human rights sanctions regime, as noble Lords will be aware, we broadened the scope. The global anticorruption sanctions regime has been used specifically to target those individuals from Russia, sanctioning 14 individuals involved in the $230 million tax fraud in Russia uncovered by Sergei Magnitsky himself.

I know that my right honourable friend the Foreign Secretary alluded to the issue of tier 1 visas. Of course, while this is a Home Office lead, it also involves the National Crime Agency, and we will continue to bring the full weight of law enforcement to those who threaten the security of the UK and our allies. More broadly, the noble Lord, Lord Purvis, asked about the current changes we are bringing and the remit—that is, which individuals and organisations they would apply to. Just to be clear, under the current regime, the UK has been able to sanction only individuals linked to the destabilisation or undermining of the territorial integrity of Ukraine. This new approach, with the governance structures—I am not talking specifically about who or which organisation may be designated—will allow us to target any company that is linked to the Russian state, engages in business of economic significance to the Russian state or operates in a sector of strategic significance to the Russian state. The noble Lord, Lord Purvis, mentioned a number of those sectors.

Of course, I will work—as I have previously—with noble Lords across the House, but particularly with the Front Benches, to bring both greater detail through direct questions in your Lordships’ House and more detailed insights on the approach. The noble Lord, Lord Collins, will smile at this, but I am not going to speculate on the individuals or organisations that may be sanctioned under this broader regime. Of course, the noble Lord, Lord Purvis, is right that there are implications in certain key sectors. The issue of guidance and not just the implications for those who may be sanctioned but the wider impact on those sectors and industries is an important consideration. I assure the noble Lord that that is very much part of our thinking.

If I may, I have a final point, which picks up on some of the questions that the noble Lord, Lord Collins, asked about specific acts and specific points. I will, of course, follow up my letter to the noble Lord, Lord Collins, as well and copy in the noble Lord, Lord Purvis, and other noble Lords.

On the point that the noble Lord, Lord Purvis, raised about leadership, he may be aware—but he may not be—that my right honourable friend the Prime Minister is currently en route to Ukraine; he may well have arrived. He is having talks directly with President Zelensky. We are also announcing further support of £88 million, particularly looking more broadly at the economic and energy impacts of any steps that Russia may take. The noble Lord raised the issue of the call to President Putin. That is being prioritised, looked at and arranged. Certainly, we hope that it will happen very soon.

On the general point about my right honourable friend the Foreign Secretary, the noble Lord said that, again, it shows a lack of British leadership. I challenge him in this respect. Looking back over the last two months at the engagement of my right honourable friend the Foreign Secretary on the issue of Ukraine, on 1 December, she met the Ukrainian Foreign Minister, and on 2 December, she met the Russian Foreign Minister. I am sure I speak for all noble Lords around your Lordships’ House in wishing my right honourable friend the Foreign Secretary a speedy and full recovery. She is certainly looking to undertake her responsibilities in terms of engaging directly in Moscow. She announced yesterday that she is looking to travel to Moscow within the timeline of the next two weeks; subject to her recovery and ensuring that all processes are in place, we are looking to do exactly that.

My right honourable friend has also met with the G7, as the Prime Minister has already. On 13 December, he had a call with President Putin. He had a further call with the Ukrainian president, President Zelensky, whom he is visiting. The Foreign Secretary had a phone call with members of the OSCE. She had phone calls with UN Secretary Blinken on 23 December—to name just one of them—and with the EU policy chief, Josep Borrell. On 30 December, she had a phone call with Foreign Minister Le Drian, Secretary Blinken and German Foreign Minister Baerbock, and, most recently, she had a call with the German Foreign Minister. My colleague, Minister Heaton-Harris, spoke with Deputy Foreign Minister Titov on 26 January. The Foreign Secretary had a call with the Dutch Foreign Minister on 1 February, and, as I said, she intends to visit Moscow, health permitting.

I can provide a full list of engagements. I have not counted other Ministers; indeed, I hope to be in Estonia next week as part of our responsibilities on the Media Freedom Coalition. However, part of my engagement with the Estonian Foreign Minister, where our troops are based, will be on the situation of Ukraine.