Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2022 Russia (Sanctions) (EU Exit) (Amendment) (No. 5) Regulations 2022 Russia (Sanctions) (EU Exit) (Amendment) (No. 6) Regulations 2022

Stephen Doughty Excerpts

Monday 21st March 2022 General Committees

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

It is a pleasure to serve under your chairpersonship, Mr Twigg. I thank the Minister for the points that he has set out; indeed, I thank the whole team at the Foreign, Commonwealth and Development Office, and those in other Departments who are working on bringing in these sanctions measures. I do not intend to detain the Committee long; in line with the approach that we have taken on these matters to date, we wholeheartedly support the Government’s efforts to target the Putin regime in response to its unjustifiable, unprovoked attack on Ukraine, and the heinous aggression and atrocities that we see almost daily.

I have a number of questions for the Minister, which I hope he can answer. Let me begin by reiterating that we Labour Members stand in utter condemnation of President Putin’s invasion, and in complete solidarity with the people of Ukraine, who are showing extraordinary courage and resilience, and are making extraordinary sacrifices, in resisting this onslaught. I am sure that the Minister met, as I did, the four Members of the Ukrainian Parliament who came here. They are remarkable women who are speaking up, and who undertook the journey here at great risk to themselves. They had powerful messages for all of us in this House about what is needed. I hope he has taken on board many of the issues that they raised with him and others on all sides of the House.

We have pledged to work with the Government at speed to ensure the House can pass the necessary legislative measures. We urge the Government to continue to go faster, further, broader and deeper, not least because as Russian forces encounter the courageous Ukrainian defence, the fighting has got bloodier and increasingly indiscriminate. We have seen absolutely appalling scenes in Mariupol in the last few days—utterly horrific attacks on civilians and the attack on the shopping centre in Kyiv overnight. Let us remember that we are here passing these sanctions because of the Russian regime’s unprovoked and indiscriminate aggression against the people of Ukraine.

We cannot afford to have a sanctions gap. At some points during this process, we have been critical of the speed with which the Government have introduced measures. The Minister gave some details of the number of measures that have been brought in, but they were all lumped together in one group. It would be helpful if the Minister set out the exact number of measures that have been introduced and the exact number of individuals and entities that have been targeted, perhaps with a breakdown by date. He mentioned that things had sped up since the introduction of the Economic Crime (Transparency and Enforcement) Act, which we supported, but I am keen to see details on how quickly that has happened. The reason we made those changes in the first place was to give the Foreign, Commonwealth and Development Office more legal ability to sanction individuals without challenges such as it has experienced.

I want to ask the Minister about the resourcing of that unit and the other implementing units. Passing the sanctions is one thing, but we must inform all the relevant sectors, some of which are complex, and enforce the sanctions across all those sectors. They will affect many companies and individuals who may have had interactions with individuals or companies linked to the regime. What is being done to staff up the FCDO and, crucially, the Office of Financial Sanctions Implementation? I understand that it has only 37 full-time equivalent staff. What are the Government’s plans to increase that number urgently and ensure we have the maximum amount of resources for drafting and, crucially, implementing these measures?

Will the Minister update us on the situation in the overseas territories and Crown dependencies? I draw attention to my declaration of my recent visit to Gibraltar, where I asked questions about implementation in the overseas territories. They are crucial to ensuring that we tackle the individuals who have sought to hide their money and move their assets around. Is it his understanding that all the OTs and CDs have implemented these measures all in their different legislative and constitutional ways? That is critical, not least when it comes to measures on financial services and shipping, given the role that OTs and CDs play in those things.

On shipping, I welcome the measures that are being taken. This issue has been raised repeatedly by MPs in Ukraine and others—a number of Members have received briefings on it in recent days. Could the Minister clarify what is being done about maritime insurance for cargoes? I understand that nine out of 10 of the main shipping firms operating in and out of Russia are now not undertaking operations there, although the Chinese shipping firm COSCO is still doing so. Given the role of the UK, and particularly Lloyd’s of London, in maritime insurance, can the Minister explain whether insurance companies are providing insurance for Russian cargoes? Without those crucial insurance and reinsurance services, it will not be possible to transport those cargoes. It would be helpful for the Committee to understand that.

The Minister mentioned the measures relating to aerospace and space activities. Could he provide an update on the reports over the weekend of an aircraft that was allegedly seized at Biggin Hill airport? I know the Transport Secretary was dealing with that, but has there been any resolution? Have there been other examples of aircraft or air transport trying to use UK airspace, particularly at general aviation airports and others away from the main cargo hubs, or of oligarchs attempting to flee from the measures we have introduced? What implementation has there been? Implementation is critical.

We will have all seen the remarkable scenes of the cosmonauts boarding the international space station, and we have all raised concerns about the company OneWeb and the proposed launch of its satellites from the Russian facilities. I understand that there have been updates in recent hours about plans to move that launch. Does the Minister have any information about that? Given our role in space activities, and in satellite technology in particular, it is crucial that we are not subtly funding Russian space activities through our own commercial ventures. Of course, we have co-operation with the European Space Agency, with its spaceport in Guiana. It is crucial that we are using that, and other American launch facilities. We should not be using an agency that may have had some incredibly proud cosmonauts, but whose own head has said some frankly appalling things in recent days.

The Minister mentioned a range of companies affected by the sanctions. While a number of the big name companies—especially those with UK links—have stopped operating in Russia, which is welcome, we are aware of a substantial list of major brands located elsewhere in Europe. I will not name individuals; I am sure that the Minister is aware of whom I am referring to. What discussions is he having with our allies in European Union member states, and indeed non-European Union member states that are allies none the less, about what pressure is being put on some of those big brand names to cease their operations in Russia? Quite rightly, many Ukrainians have been raising the matter with Members of this House, and asking how some of those organisations are still operating and bankrolling the Russian regime by the back door.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I am grateful to my hon. Friend for giving way. The Treasury Committee recently received evidence from a number of experts about sanctions. One of the issues that has come up is that some of the companies need further guidance and advice. They are self-sanctioning, which is welcome, but they could do with more advice, guidance and support from the Government. It would be great if the Minister could pick that up, in terms of next steps.

[Stephen Doughty]

I thank my hon. Friend for making an important point, which relates to the questions I raised about enforcement and implementation bodies, and particularly the Office of Financial Sanctions Implementation. They have got to be resourced to engage not only in enforcement, but in the provision of education and information to companies that want to do the right thing. These are incredibly complex matters that are moving at speed.

On countries that are not currently sanctioning, some of which we have alliances and relationships with, can the Minister provide an update about what diplomatic efforts we are making to bring them into the global coalition against the Putin regime? The Minister will be aware—we raised the matter in Westminster Hall the other day—of threats to a number of the countries that are sanctioning, including in the western Balkans. What steps are we taking to reassure and reinforce them?

I have two final questions. The Government have previously referred to an intention to limit the deposits that can be made by Russian nationals. I raised the matter with the Minister on 1 March. Is that now included in these measures, or is it a further measure to come? There is also a constant question, which other Members may raise, about Scottish limited partnerships. Can the Minister provide an update on how that issue is being dealt with?

The Opposition’s broad intent is to support the Government on these measures and to support them in acting in the toughest way possible against the Putin regime. We will not seek to divide the Committee, but I hope that the Minister will be able to provide some important clarifications.

--- Later in debate ---

[James Cleverly]

I am very glad to put on record the Government’s recognition of the constructive tone that has been taken by both Her Majesty’s Opposition and the SNP, not just in today’s statutory instrument debate but throughout this process. I recognise that there is a duty on Opposition parties to push the Government and to hold the Government to account, and in this instance, it has been done in a genuinely constructive way that is designed to reinforce what we are all hoping to achieve, which is to put meaningful pressure on the right bits of the Russian system, so that we close down the financial freedom of those individuals who are propping up Putin and his regime and helping to fund his war effort. I recognise that sometimes in opposition it is easier to be completely focused on opposing for the sake of opposition, and that sometimes supportive opposition is harder to execute, but the tone that the Opposition parties have taken has been noticed and recognised.

In relation to specific details—times, dates, locations and so on—if the hon. Member for Cardiff South and Penarth, my shadow, does not mind, I will write to him on that. Actually, I will rephrase that: I will either write to him or ensure that the information is deposited in such a way that the whole House can see it, because that is important. On his point about enforcement, which was brought up on the Floor of the House, there are institutions, businesses and individuals who want to do the right thing, but we are indeed in uncharted waters and unprecedented times; they want to ensure that they do not inadvertently fall foul of our sanctions system, and we want to help them with that.

Ultimately, enforcement of the sanctions will be done by different bits of Government. The hon. Gentleman referred to the Office of Financial Sanctions Implementation; I will return to the staffing numbers, and whether they are secondments or permanent posts. It is part of the enforcement regime, as are HM Treasury and the Home Office. Obviously, the Department for Transport has a big role to play in relation to both aviation and ports. We will continue to liaise closely with ports and airports to ensure that they understand exactly what they need to do. The hon. Gentleman mentioned a specific instance about small airfields. We are conscious that elite air travellers tend not to use Luton, Gatwick or Heathrow so much. We are very focused on smaller airfields, and will be working with them to ensure that people do not use them to slip through the net. I will not go into the details of that incident, but we are absolutely aware of what he is talking about, and we are seeking to take effective action.

Both hon. Gentlemen asked in various ways about overseas territories and Crown dependencies. The sanctions regime applies in all UK Crown dependencies and overseas territories, either by Orders in Council or through the jurisdictions’ own legislative processes. We are working with them to ensure that the regime is put in place quickly, and that there are no loopholes or opportunities to move between regimes.

[Stephen Doughty]

Will the Minister tell us, or perhaps write to us about, where that has got to? I understand that for some jurisdictions, the changes were effectively automatic—in fact, some of them were ahead of us—but for some, the changes took longer. Obviously, we cannot allow loopholes in this process, particularly within our British family.

[James Cleverly]

As the hon. Gentleman says, there are different processes in different parts of the Crown dependencies and overseas territories. I assure him that they all have a genuine desire to get things done quickly. As he says, in some instances, they moved ahead of the UK. I have no doubt that the process will be quick enough to prevent any leakage of the kind that he suggested.

The hon. Member for Bethnal Green and Bow (Rushanara Ali) spoke about working with the financial and business sectors to help implementation. I have covered that, and we will continue to work with those sectors.

[James Cleverly]

We are looking to make sure that the implementation is effective, because we have seen that in most instances, sanctions have a deterrent effect. People do not attempt to breach the sanctions, because they know that we are keeping a close eye on them. We need an effective enforcement regime, and we will make sure that it is as effective for these sanctions as for the initial sanctions regime.

The hon. Member for Stirling spoke about close co-ordination with our international friends and allies. I am glad he raised the point that our various legal jurisdictions and processes are not identical, so the initial responses were necessarily slightly different. At all stages, we have worked very closely with our international partners. Indeed, at the meeting of G7 Foreign Ministers in Liverpool in December last year, we agreed what our collective sanctions response would be in the event of an invasion; it feels like a lifetime ago, even though it was only a few weeks ago. However, the initial action, and vote in the Duma, fell short of the threshold that had been discussed.

Internationally, we all responded in our respective ways, but there was absolute unanimity of purpose. Since then, we have relatively quickly, and with the help of the Opposition parties, taken Acts through Parliament. We can now co-ordinate even more tightly. We can take our allies’ preparatory work on sanctions and use it to bring forward our own, which massively speeds up the process and increases co-ordination. My right hon. colleagues at various levels of Government will be working once again with their G7 counterparts later this week, examining what pan-G7 sanctions packages would look like.

The hon. Member for Stirling raised the question of how we de-escalate from this, which is a legitimate point. At the moment, we are not speaking much about what a de-escalation process would look like—understandably, I think. Our message is very clear: the sanctions will bite harder and get more painful the longer this continues, and if the Russian regime wants sanctions to ease, it has to cease its invasion and its attack against Ukraine and remove its troops. Then we will consider how we de-escalate. As for what protections will be in place in future, as the hon. Gentleman said, these sanctions powers are rightly powerful, and the House will of course want to make an assessment of what enduring level of power is appropriate for a Government. That is a very important argument, but it is an argument for a different point in time.

We will continue to apply more pressure to Putin’s regime, including through further sanctions.

[Stephen Doughty]

I sense the Minister may be coming towards the end of his remarks. Before he sits down, could he say something about the crucial question of maritime insurance of cargos? If he is less well equipped to respond to that question, perhaps he could come back to us in writing. It is a critical issue, particularly given the role of the UK in the maritime insurance market.

[James Cleverly]

The hon. Gentleman makes a very good point and, ever the gentleman, has allowed me the elegant “get out of jail free” card that is the option of writing to him on this important subject. Let me check very quickly—[Interruption.] No, that is not the right answer. I will write to the hon. Gentleman on this issue, because I do not want to get “nearly but not quite”; I want to absolutely nail it.

When it comes to applying sanctions, the unanimity of voice from those across UK politics, in every part of the UK, and in the international community should send a very clear message to Vladimir Putin: he cannot, and will not, be successful in his attack against Ukraine. He should now cease that attack and withdraw his troops, and I am glad that the UK’s sanctions will increase the pressure on him until he does so. I thank the Committee for its contributions, and for its support for the sanctions.