Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022

Stephen Doughty Excerpts

Monday 23rd January 2023 General Committees

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

It is a pleasure to serve under your chairpersonship, Dame Caroline. I thank the Minister for setting out to the Committee the details of the latest expansion of our sanctions regime.

Last week, it was a pleasure to speak on behalf of the Opposition in support of Ukraine in the debate on Russian strategy and to hear comments that I am sure will be reflected by all Members in Committee about how we as a Parliament and a country continue to affirm our solidarity with Ukraine, and how we want to ensure that it wins the war and Putin, his cronies and all those who abet his illegal and barbarous war in Ukraine feel the walls closing in. Our sanctions regime is one of the most critical weapons in that arsenal. As with the other sanctions measures that we have debated over many weeks and months, the Opposition will not oppose the regulations or seek to divide the Committee, because we support them.

Before I come to specific questions on the detail set out by the Minister, I will ask a couple of related questions, particularly because she referred to the need to close loopholes in financial and money market instruments, investments and others, and to the potential evasion of sanctions regimes. These first questions are about cryptocurrencies, to which she did not refer. We have raised the matter in previous Committees that have discussed sanctions.

At the most recent such Committee sitting, my colleague, my hon. Friend the Member for Hornsey and Wood Green (Catherine West), stood in for me and, afterwards, a letter she received from the Minister said that

“the Government and UK authorities are actively monitoring the use of cryptoassets to detect potential instances of sanctions evasion and stand ready to act.”

I see no new measures on cryptocurrencies in the regulations, nor in the Economic Crime and Corporate Transparency Bill, which is also going through Parliament.

As I have relayed to other Ministers on many occasions, Tornado Cash and Blender—so-called cryptocurrency mixers—have both been sanctioned by the United States. The former has allegedly been used to launder more than $7 billion-worth of virtual currency since its creation, just in 2019. It has been used by a number of regimes around the world, including North Korea. It is believed that Russia is also using such measures to evade sanctions, particularly on financial transactions. Given that the US Treasury has imposed sanctions, that no new measure is in the statutory instrument today, and that both are still not on our sanctions list as of 17 January, why is that the case? It is really important—as we have heard in many debates on these issues—that the United States, the UK, the European Union and other allies supporting Ukraine make sure that there are no loopholes and gaps for Russian assets to escape the sanctions regime. I hope that the Minister will answer that.

Another issue that I have raised in every single one of these sanctions debates is the repurposing of frozen assets to support Ukraine. Last week, the Minister said in the Chamber that the Government would “look at all options”, and I had a similar comment in a letter that I received. Last week, I heard again and again at the Ukraine conference that I attended in Davos—I will draw attention to my declaration in due course on that visit—“Why are we not repurposing frozen assets?” Countries including the UK have done well at freezing, but we now have to turn that into support for Ukraine, given the huge costs of supporting its economy, of reconstruction and of continuing to defend itself against Russian aggression. Will the Minister set out where conversations on that are in Government and whether we might expect to hear announcements in due course?

The issue of Rosatom has also been raised with me, and whether individuals involved in Rosatom are covered by these regulations or by other existing sanctions. Perhaps the Minister can say a little about that or, if not, write to me, because although that is the Russian Atomic Energy Agency, individuals will, without doubt, have resources and assets in the UK and other countries across Europe.

Turning to the substance of what the Minister set out, Labour fully supports the steps being taken to limit further the access that designated persons have to key financial services. A prohibition on providing services related to trusts for the benefit of designated persons and closing loopholes pertaining to loans and money market instruments are prudent steps to take to sever every tether with which those designated under our regime might seek to exploit gaps to retain their wealth or obscure it.

The Opposition welcome the fact that the Government are closing further loopholes on oil production and mining equipment, as well as establishing further chemical restrictions. However, can the Minister set out the value of that kind of equipment that designated individuals have obtained since the invasion began, but prior to the loopholes being closed? I ask because although we welcome the sealing of any loopholes or gaps—and obviously, our sanctions regime is a work in progress—we are nearly a year into this terrible conflict. If we have identified that loophole, why has it taken until now to close it?

Finally, further limiting designated persons’ access to auditors, advertisers, engineers and architects is critical in inhibiting their capacity to run and manage lucrative businesses, and it is a welcome step to further prohibit access to information technology consultancy. By undermining designated persons’ access to such services, those aligned with Russia will hopefully and indelibly learn that waging war alongside Putin ends only one way: with Russia and them isolated, economically wounded and out in the cold.

As I said, we will not seek to oppose these measures. We broadly welcome all steps to increase and broaden sanctions on Russia for its barbarous war in Ukraine. We have to look only at some of the atrocities of recent weeks to see why those responsible—Putin, Russia and their allies, aiders and abetters—need to face the full force of our sanctions regime.

--- Later in debate ---

[Anne-Marie Trevelyan]

I thank all the Committee members for their contributions, and I will do my best to answer their questions; if I cannot do so now, I will make sure that we write to them.

In response to the hon. Member for Cardiff West, the statutory instrument does affect UK citizens with shares in Russian companies. I hear his point about companies that continue to operate in Russia. Of course, many companies have stepped away or are stepping away, where they are able to do so. Clearly, that brings in another layer of services, particularly, that are no longer viable for export. I will take away the point about the company that he identified and get back to him more formally on that. We see a continuing move across the piece of British companies and others making decisions for themselves.

On the question from the hon. Member for Cardiff South and Penarth about cryptocurrencies, the UK’s financial sanctions cover funds and economic resources of every type, including crypto, so they are all-encompassing. The Office of Financial Sanctions Implementation has recently imposed monetary penalties against some fintech firms. I am happy to get more details for him.

[Stephen Doughty]

That is reassuring. However, the US Treasury took steps in August to sanction mixers, which effectively jumble up different cryptocurrency transactions to avoid transparency, whereas the UK, as yet, has not. Will the Minister write to me about what is happening and why that has still not happened?

[Anne-Marie Trevelyan]

I am happy to commit to do that. As the hon. Gentleman is aware, we do not comment on areas or individuals that we may be looking to sanction for obvious reasons, but I will happily get back to him on those specifics.

In relation to asset seizures, a big piece of work is ongoing. We are considering all the options around seizing Russian-linked assets and how they could be used to support the people of Ukraine, including funding humanitarian efforts and contributing to the reconstruction of the country.

[Stephen Doughty]

That is reassuring to hear as well. I hope that the Minister will, in discussion with her ministerial colleagues, look at the example of Canada, which has introduced new legislation recently. There is also a historical example: after the first Gulf war, we took a share of the profits of all companies there to help with the reconstruction of Kuwait.

[Anne-Marie Trevelyan]

The hon. Member is right: some international partners are looking to test both the freezing and the potential seizure of assets. None of those is fully tested for their lawfulness yet, and we are watching and supporting our allies, who are testing their own legal systems. We want to ensure that we work closely with Government Departments and our law enforcement agencies to identify all possible options and work that through.

On the hon. Member’s point about Kuwait, that decision was taken after the end of the war. We want to continue to work internationally to come up with options that will be viable as and when this terrible war ends, but, for now, we continue to work to see how we can pull together a package that we know would stand up in a court of law.

I hope that these measures give confidence that we are continuing our wave of sanctions, which are having real, damaging consequences to Putin’s regime, and we will commit to going further. We continue to watch where and how we might effectively continue to put on pressure to encourage Putin to end his appalling and aggressive war. We stand firm and resolute with the people of Ukraine. We will continue to support them and the Ukrainian Government until Putin and Russia withdraw from Ukraine. I hope that the Committee will support these regulations.

Question put and agreed to.

Russia’s Grand Strategy

Stephen Doughty Excerpts

Thursday 19th January 2023 Commons Chamber

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

I thank colleagues on both sides of the House for their thoughtful and considered contributions to today’s debate. I particularly thank the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) for securing the debate, and I agree with the vast majority of what he said.

It is very clear from today’s debate that, despite some differences, Members on both sides of the House are absolutely committed not only to affirming and deepening our support for Ukraine but to confronting Russia and President Putin’s imperialist ambitions, which threaten the peace and security of Europe and risk a very dangerous and bleak future for the entire world. We need to be absolutely clear that this is not only a barbarous war against the people of Ukraine but a war against the very principles of humanity, liberty and democracy. If we fail to understand what is at stake, if we fail to ensure that we have clear and sustainable strategies of defence, deterrence and denial, and if we fail to have clarity and unity on the ends we seek and on the ways and means of achieving them, we risk a bleak and brutal future.

The war in Ukraine may have been the watershed moment when much of the world sat up and finally recognised the extent of Putin’s ambitions, his warped world view and the cruelty of his regime but, sadly, that alarm has been sounding for well over a decade, and some would say longer. We have seen Putin’s record in Chechnya and his systematic crushing, over many years, of democratic opposition and dissent in Russia. Many of us have been sounding those risks in this Chamber for a long time, yet we were ignored as Russian money and influence flooded into Londongrad and as disinformation flooded our politics and society both here in the UK and across the west. Frankly, an atmosphere of gross naivety and expedient complicity prevailed.

Whether we look from Chechnya to Syria, from the Caucasus to the western Balkans, or from Georgia to the annexation of Crimea, let alone his effective absorption of Belarus, we see that international acquiescence has given Putin the pretext for his next violations each time he has breached the boundaries of international law or fractured the global rules-based order. There has now been an unmistakable shift that we cannot allow to be reversed, because his illegal war against the people of Ukraine has garnered unity, solidarity and material opposition across the west to the Kremlin’s actions, which is the exact opposite of what he expected.

Russia’s strategy has met its most formidable defence in the courage and defiance of the people of Ukraine. As we approach the one-year anniversary, it is worth reflecting on the more than 7,000 Ukrainian civilians who have been reported killed since last February—the actual figure is projected to be much higher. Their blood is on Putin’s hands.

We have seen great tragedy this week. I have just come back from a Ukraine forum at Davos with an Ukrainian MP and other friends—I draw attention to my upcoming declaration of that visit. We stood in mutual sorrow, mourning the tragic losses in the terrible helicopter crash. Time and time again, we heard first-hand testimonies of the impact of Russia’s barbarous strategy on civilians, not least the terrible scenes we saw in Dnipro this week.

Many of us have visited Ukraine, and just a few months ago I saw with my own eyes the situation in Bucha, Irpin and Kyiv. I pay tribute to Members on both sides of the House, including my hon. Friend the Member for Bradford South (Judith Cummins) and the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), for talking about what they saw. It is right that we recognise the remarkable tenacity of the Ukrainian people in the face of such brutality. Despite that fantastic counter-offensive in the autumn, winter has brought a bloody stalemate to much of the frontline, and spring—or, indeed, even earlier—is likely to see renewed offences. That is why it is exactly right that the UK and our NATO allies provide additional military assistance to Ukraine now. We on the Labour Benches fully welcome the Government’s decision to send those Challenger 2 tanks.

Across this House, we stand unshakeably with our NATO and international allies in providing comprehensive, military, economic, diplomatic and humanitarian assistance. This is not just in relation to Ukraine, but in terms of reinforcement and realignment across NATO, particularly with our Baltic and eastern European allies. Throughout the conflict, we have stood united in this House, and that is evident again today. That said, we believe that the Government should set aside individual piecemeal announcements and instead set out a clear strategy, in concert with our allies and Ukraine, of long-term military, economic and diplomatic support, so that we can make sure that Putin’s invasion really does end in failure.

There was an early focus on Russia using energy as a key part of its strategy, but we have heard again and again today that at the heart of Russia’s strategy is also terror. It is vital that the Ukrainian prosecutor general and the International Criminal Court have the resources they need to document and prosecute the growing body of evidence of Russian war crimes. We have been calling since March—indeed, it was called for by the Leader of the Opposition—for the establishment of a special tribunal to prosecute the crime of aggression. I have heard that again and again over the past few days. This is something that is gaining real momentum, and I would like to hear from the Minister the Government’s official position.

We also support the call from my hon. Friend the Member for Rhondda (Sir Chris Bryant) and many others to re-purpose frozen Russian assets to help rebuild critical Ukrainian infrastructure and provide much-needed humanitarian aid to the country. We need to get on with that. Other countries, including Canada, are moving forward. What is the Government’s position? Why are we dragging our heels? I appreciate that it is complex, but we have been calling for this for months and months and months. I did have some warm words from Ministers in Committees a few months ago, and yet I have heard nothing since.

Let me turn now to Russia’s wider strategy. Dominating Europe is an integral component of Putin’s strategy and his view of its ultimate success or failure. The Russian world strategy that was unveiled in September made it very clear that Russia wanted to increase its position in the Slavic nations, the Baltic states, central Asia, the Caucasus and elsewhere. Putin dubbed the collapse of the USSR the “greatest geopolitical catastrophe” and considered it a “tragedy” that millions no longer lived behind those former Soviet borders since the dissolution. There should be no doubt about his world view and his ambitions for our continent.

The situation in the western Balkans has been rightly raised a number of times. I take a keen interest in the area and I have travelled out to Kosovo and North Macedonia. My colleague, the shadow Foreign Secretary, has been in Kosovo in recent weeks. The region is in its most precarious state since the 1990s, with tensions rife, and figures such as Milorad Dodik and others aligning themselves very clearly with the Kremlin. We know how this works: Putin and his cronies heighten tensions, exploit and enable secessionist movements and political outriders, sow discord, spread misinformation and capitalise on the ensuing turmoil. We cannot allow Russia’s interference in the region to destabilise the carefully calibrated peace brought about by Dayton and the Belgrade-Pristina dialogue.

We have heard about Russia’s ambitions beyond Europe. Putin was sure to formalise his ties with President Xi as a pretext to his invasion of Ukraine, culminating in the declaration of alignment between China and Russia. That relationship and its ramifications will be immensely consequential in the coming years.

We have also heard about the relationship with Iran. Characteristically, Putin is waging his war in Ukraine with its drones, but it is also a geopolitical relationship that could continue to define the entire middle east.

We have heard again and again today of the activities of the infamous Wagner Group, which is engaged in a number of conflicts in Africa, including in the Democratic Republic of Congo, across the Sahel, in Burkina Faso and in the Central African Republic, which has effectively come to depend on that paramilitary outfit. There is also central and South America, which did not get much attention today. Nicaragua, Cuba and Venezuela remain aligned with Russia. Each of their relationships with the Kremlin is characterised by military co-operation, the weaponisation of information, the repression of the press and democratic freedoms, and the undermining confidence in democratic institutions across the region. What we are seeing is an attempt to extend Russia’s geopolitical reach and to strengthen authoritarianism and dissent worldwide.

Despite the strong vote in the United Nations, we know many countries have refused to condemn Russia’s actions. I would like to hear much more clearly from the Minister our strategy in relation to the global south and for dealing with those countries—some of which we would consider very close allies—that have failed to stand with us and with Ukraine.

[Vicky Ford]

I was extremely concerned when it was drawn to my attention recently that some trade union leaders in the UK have not exactly condemned Putin’s actions in Ukraine and may have been slightly on the other side. Does the hon. Gentleman agree that it is very concerning if that is the case, and that in condemning Russia’s actions we want unity not just among politicians but among the leaders of organisations across the country?

[Stephen Doughty]

I do not know which union leaders the right hon. Lady is referring to, but I can tell her that the leader of my own union—I include my membership of the GMB in my declaration of interests—gave one of the most powerful speeches at the Labour party conference. He made it very clear what he thought, and I think that is also the view across the trade union movement in the UK: condemning Russia’s actions and standing with the people of Ukraine. I am not sure what the right hon. Lady is referring to.

I come now to some clear conclusions. We need to remain crystal clear in our commitment to NATO, but we must also end the bluster and brinkmanship that have characterised our relationship with the EU in recent years. The fact is that we all face common threats and we need to use new forums, such as the European Political Community, that bring together EU and non-EU, NATO and non-NATO countries. We all experience threats and we need to co-operate and work together. It is good that the UK was part of that, and we should seek to continue.

We must end the decade of decline for Britain’s defence, with millions of pounds of waste and mismanagement, the number of tanks cut by one third and the Army cut to its smallest size in 300 years. There has been much criticism of that across the House in this debate and I hope the Government listen carefully to that. We are in a new and dangerous world.

It is shameful that it took the invasion of Ukraine for the Government to finally get to grips with the UK’s role in illicit finance, particularly London’s role in facilitating the lifestyles and interests of Putin’s enablers and allies. That cannot go on; we must continue to close the loopholes, and I know there is cross-party support from many in this Chamber for doing that.

We must fully utilise and cherish all our alliances and partnerships worldwide in this fight—again, I hope the Minister can say what our strategy is with the global south. We must tighten our sanctions regime to ensure it is properly resourced and airtight, including in crucial areas, such as cryptocurrencies and others, where there are gaps, something I have repeatedly raised with Ministers.

We must ensure that we are investing in clean, secure and independent energy and ending our vulnerability and exposure to fossil fuels. We must do much more to take on the Kremlin in cyber-space and, of course, its systemic pollution and corruption of the information environment. We must also watch and defend the flanks; I have spoken about what our strategy needs to be with NATO, but we must also watch those areas that Russia is trying to destabilise, such as the western Balkans.

In conclusion, this illegal war of aggression has brought about a sense of unity and common purpose not seen since the onset of Putin’s rule. The incredible progress we have seen, with Ukraine at the fore, is an indication that his grand strategy might be unravelling. With our steadfast and enduring support, I know that the values we share with Ukraine will prevail, but they require a comprehensive strategy, with the resources and political will to see it to the end and Putin’s defeat.

British Indian Ocean Territory: Sovereignty

Stephen Doughty Excerpts

Wednesday 7th December 2022 Westminster Hall

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

It is a pleasure to serve under your chairpersonship, Mrs Cummins. I thank the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) for securing the debate at this critical time of change for the Chagos islands, and I thank colleagues for the range of comments and contributions they have made to the debate.

I am not sure whether to thank the hon. Gentleman for the comments he made about me at the start of the debate, but we had a very enjoyable trip to the Falkland Islands. I will be making declarations about that trip in due course. I agree with the hon. Gentleman’s characterisation of our united position on the Falkland Islands and our resolute support for them. That is the Opposition’s long-standing position, which I have reiterated on many occasions, including well before the visit and in relation to our position on other British overseas territories.

From the outset, I gently say that I do not accept a number of the hon. Gentleman’s historical analyses and comparisons. Neither are they supported by the House of Commons Library briefing that has been provided for this debate, or by statements made by the Governor of the Falkland Islands and the Chief Minister of Gibraltar. When we talk about our overseas territories, it is important that we understand their distinct and different situations. The situation around the Chagos islands is particularly complex and nuanced, and we should take it in that vein and not make comparisons to other overseas territories.

I pay tribute to colleagues across the House, particularly those with Chagossian communities in their constituencies, for the advocacy and support they have provided over many years on this issue, which is sensitive and painful for those communities, and for raising concerns about our diplomatic standing and commitments internationally. I express my gratitude to the all-party parliamentary group on the Chagos islands, of which I am a member, for its tireless efforts in keeping the Chagos islands on the political agenda and for meticulously scrutinising the policies of successive Governments.

The Opposition welcome the Government’s decision to begin discussions with Mauritius about the future of the islands, but I will set out some detailed questions and concerns on the matter. We have to be guided by a few key principles, so my questions are not in order of priority. We must understand concerns about our national security and that of our allies and strategic partners; our compliance with international law and upholding our international obligations, and the consequences if we do not do that; and the rights and wishes of the people of the Chagos after decades of pain and hardship.

I have personally met and heard from many different representatives from the Chagos community over many years. I have heard different views expressed by different parts of the community, but it is crucial that their distinct and different voices are heard in the process. We should also be concerned about other crucial issues, particularly the protection of the environment and the marine ecosystems around the archipelago, which a number of hon. Members have raised.

This is a deeply complex issue, and I want to start with the question of the rules-based international order, which must be central to UK foreign policy. This historic injustice continues to prevent us from adhering to that, and I share the absolute and deep regret for the past actions of previous Governments, including Labour Governments. The actions taken in the late 1960s and early 1970s were completely unjustifiable. A number of us will have read the shocking documents from that period and the language expressed in them, which was completely and utterly unacceptable. We have a fundamental moral responsibility to the islanders that will not go away. I remain convinced that there must be a lasting resolution to this challenge that lives up to our moral and legal obligations, that draws on the views of Chagossians around the world and that is reached in co-operation with our partners and allies. There must be an apology from all of us—there certainly is from our side—for those past actions, but we need to look to the future and to what is being done for Chagossians today, not just in relation to the situation in the archipelago, but for Chagossians here in many communities.

The ICJ in 2019 was unequivocal in its ruling that

“the United Kingdom is under an obligation to bring to an end its administration of the Chagos Archipelago as rapidly as possible”.

That was adopted after a vote of 116 to six by the United Nations General Assembly, which called on the UK to

“unconditionally end its occupation of the Archipelago as soon as possible.”

That was supported by the 2021 ruling of the special chamber of the International Tribunal for the Law of the Sea. Although the tribunal did not have competence on territorial disputes, it stated that

“Mauritius’ sovereignty over the Chagos Archipelago can be inferred from the ICJ’s determinations.”

Unfortunately, the Government have spent several years simply ignoring and denying these developments, and that has damaged our diplomatic reputation with not just Mauritius but many other countries across Africa, Asia and the Pacific, and with a range of international legal and human rights bodies. Even the Maldives, which historically has been aligned with the UK Government position on this matter, recently changed its position to align with the rest of the international community.

I take on board the comments made by the hon. Member for Shrewsbury and Atcham on China and its expansion in the South China sea, the Indian ocean and beyond, and he raises some legitimate concerns, although I do not accept his wider characterisations of Mauritius. It is a fact that China has made increasing encroachments into the territorial waters of its neighbours and vast claims in the South China sea while ignoring judgments against itself. That has been matched by a growing assertiveness, and even belligerence, towards some of our allies and partners in the region, so I hope the Minister can set out what assurances we have had on these matters and on China’s activities in the region.

It is my view that the inverse will play out if we do not resolve this matter, because if this is unresolved in terms of international law, it will only play into the hands of China and others who seek to undermine international judgments and law. When we want to call on China to comply with the Permanent Court of Arbitration’s judgment on the South China sea, it will say, “Well, you are not in compliance with the ICJ or the International Tribunal for the Law of the Sea”. That could be the case for a number of other maritime and territorial disputes that it is in our interests to pursue and defend resolutely. We cannot have one hand doing one thing and the other doing the opposite.

Of course, we must also do the right thing for the Chagossians. The various support packages that were announced have not been followed through, and very little money from that £40 million package has been spent. The last answer I had said that only £810,000 of it had been spent. That is completely unacceptable, and I hope the Minister can say something about that. What discussions has she had with all the different Chagossian groups located not just here in the UK, but in Mauritius, Seychelles and elsewhere?

[Daniel Kawczynski]

Will the hon. Member give way?

[Stephen Doughty]

I am conscious of the time, so I will not. I want to speak about the costs the UK Government have incurred defending the indefensible on the legal position. An answer I received said the UK had spent nearly £6 million on external legal services relating to defending cases that the Government then lost in the ICJ. That is clearly unacceptable at this time of pressure on the public purse. Could the Minister update us on how much money has been spent on defending the previous position?

Citizenship has rightly been raised by a number of hon. Members, including my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane). The Nationality and Borders Act 2022 created an entitlement for direct descendants of Chagossians who were not already citizens to acquire British nationality. I understand that the process opened in November, but I hope the Minister can set out what will be done to address the issue of Chagossians being denied that right to British nationality and to ensure they get what is rightfully theirs. We know that previous negotiations have not gone well and that they broke down in 2009, 2016 and 2017. Will the Minister speak about the tenor and tone of the negotiations and how we will ensure that they go forward in a constructive spirit to achieve an agreement?

On defence, it is crucial that we understand, as many Members have rightly said, that the United Kingdom-United States defence facility in the territory plays a vital role in keeping us and our allies safe. It plays a role in monitoring drugs and piracy, and in the national security activities of regional partners. It supports allies from many countries, and it carries out nuclear test ban monitoring and regional humanitarian efforts. Can the Minister say what discussions have been had with our allies, particularly the United States, about those negotiations and ensuring we maintain our defence capabilities in Diego Garcia?

On the environment and the maritime importance of the islands, we recognise the judgment in relation to the Mauritius Ports Authority, but, given the importance of the archipelago, it is clear that we need to protect that environment. What discussions have been had on that with Mauritius and other partners in the region, as well as with the Chagossians, who believe in protecting their environment and historical homeland?

I will conclude by saying there have been some important questions asked today and some very reasonable contributions. I do not agree with all of them, or with the tenor of some of them, but this is a complex and nuanced issue and it requires a complex and nuanced solution. We want to engage with Chagossians here in the UK, and we will work constructively with the Government to find a permanent and equitable settlement that will end decades of pain for so many, while addressing legitimate concerns about defence, security, the environment and the right of return for Chagossians.

The ultimate problem here is that this issue is hampering our diplomatic position in the world and having much wider implications. We must remember that this was an historic injustice committed against a people by a past Government, and those people have to be at the heart of any solution.

West Balkans: Council of Europe

Stephen Doughty Excerpts

Wednesday 16th November 2022 Westminster Hall

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

It is a pleasure to serve under your chairpersonship, Ms Nokes. I thank the hon. Member for Henley (John Howell) for securing this debate at a critical time for the entire western Balkans and for the Council of Europe’s engagement with it. I also extend my thanks to our permanent representative, our judges, the whole delegation to the Council—many of whom have spoken today—and our envoy in the region, Sir Stuart Peach, who is doing an excellent job.

We have heard some fantastic speeches today, which have drawn on the huge experience we have in the room. The hon. Member for Henley made a comprehensive speech, speaking of the long arm of attempted Russian influence and the range of challenges across the region and in multiple individual countries. I did not agree entirely with all his views on disenchantment with the EU across the region; I was there recently and, while it is clear that there is frustration with the process, I also saw a lot of enthusiasm for further integration into the European family on multiple levels.

I pay tribute to my hon. Friend the Member for Rochdale (Tony Lloyd) and his work in Kosovo. He spoke from his extensive experience. In particular, he spoke of the hope we need to offer younger generations across the region, and indeed in many troubled parts of the world, as being key to ensuring stability in the future. The right hon. Member for Beckenham (Bob Stewart) spoke from his own extensive experience in Bosnia. I pay tribute to him and particularly to the work done by him and his fallen comrades in the region in the past. He said the risks of a further descent into violence are very real, and we should all be aware of them. We heard many other excellent contributions. As always, the hon. Member for Strangford (Jim Shannon) made important points on human rights and freedom of religion across the region.

The hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) made some important points about not in any way demonising or targeting the diasporas of individual countries with our language and about the damage that that can do to communities playing a critical role in the UK. I very much agree with much of what he said about Albania. We have to be very careful; we need a pragmatic, official-led response to the challenges we see in the channel. The Home Affairs Committee has been very clear that what we are seeing is being facilitated by organised criminal gangs, which is why we have proposed a new National Crime Agency cell to tackle these groups upstream. We need to determine asylum claims swiftly so that those without claims can be returned, but that cannot descend into the language that we have seen from some parts of the media and, indeed, some senior politicians. It does huge damage to our good relations with Albania, which is one of our NATO allies. I sat in NATO headquarters just last week and saw the Albanian flag fluttering in the breeze alongside our own—we need to remember that Albania is our ally at a critical time. Indeed, many Albanians play a crucial role in this country.

The hon. Member for Cleethorpes (Martin Vickers) was with me on a trip to Kosovo earlier this year. He made some critical points about trade and commercial links. I saw that myself with him in Kosovo; we need to expand those. The hon. Members for Mid Derbyshire (Mrs Latham) and for Stirling (Alyn Smith) also made some critical points about why the region is so crucial and why the UK has a key role to play. It is right that much of our focus as parliamentarians in recent months has been on Putin’s heinous war of aggression against the people of Ukraine, but the western Balkans is just as critical because of the potential for future instability and the UK’s unique historical role there, as we discussed in the debate in June. Like all present, I maintain that the work of the Council of Europe has never been more significant in ensuring peace, security and democracy for the people of our continent.

I visited Pristina and Skopje earlier this year and have previously travelled in Bosnia and elsewhere across the region, so I am familiar with the challenges, but there are many grounds for hope as well. I saw dynamic young populations keen to expand their links with the rest of Europe, including the UK. In Kosovo, in particular, I saw a young and vibrant population with a strong desire to join the Council of Europe. I join the calls, led by the hon. Member for Henley and supported by the Government, for Kosovo to be a full member of the Council of Europe.

However, we clearly see significant tensions, often fomented and aggravated by internal and external forces, and those tensions have the capacity to unravel into violence. We must be under no illusions about the seriousness of what we see in the western Balkans at the moment. There is real potential to undermine and unravel the immense progress made since the 1990s. Tensions between Serbia and Kosovo are high, following recent disputes over the licence plate issue, and the resignation of Kosovan Serbs from the country’s institutions, despite Prime Minister Kurti’s calls for co-operation. Discussions have been going on; we met Prime Minister Kurti when he was here a couple of weeks ago.

Any further escalation of that situation could put the work done by the Belgrade-Pristina dialogue at risk. I am afraid we have seen some very unhelpful rhetoric from President Vučić in Serbia. We have also seen a range of measures in Serbia that undermine human rights and freedom of expression, including the backlash against EuroPride in August. Serbia has been reclassified as partly free, rather than free, by Freedom House.

We have seen President Vučić becoming increasingly close to Russia in explicit ways, declaring his intention to maintain friendly relations, signing a three-year agreement on gas supplies, and signing other diplomatic co-operation agreements at the UN, during the United Nations General Assembly, though we are not sure what is in those. Serbia has to make a fundamental choice; does it have a European future with progress, the rule of law and democracy, or is it to be a proxy for Putin and his regressive agenda, which we see acted out so violently in other parts of Europe at the moment?

Much of today’s debate was rightly about the situation in Bosnia. The recent election unfortunately confirmed that ethno-nationalism continues to typify political life in the country. Milorad Dodik and Republika Srpska remain intransigent when it comes to healing divisions and keeping the Dayton process alive. In October he pledged to 30,000 people at a rally that secession will become a reality for the Bosnian Serb entity, and he won re-election on that basis. He has also voiced support for Russia and China, and he went as far as to say that, if NATO intervened in Bosnia,

“We will ask our friends to help us.”

Dodik also supported the illegal and bogus annexation referendums staged by Putin in Ukraine in September, and he has taken a sledgehammer to the delicate balance of power in Bosnia. The implications of that could manifest themselves dangerously for the region and across the continent. We must be fully aware of that. It is only right that we have issued sanctions against a number of the individuals involved in undermining the Dayton agreement.

I have specific questions for the Minister, whom I welcome to her place and her new role. What conversations have the Government had with the secretary-general of the Council of Europe regarding targeted initiatives to protect democratic institutions across the western Balkans? She will have seen the resolution at the PACE assembly on 12 October that, since the Thessaloniki summit, political and public enthusiasm for further integration with Europe has been sapped, due to a slowing and stagnation of the processes. What comments does she have on that? I know we are outside the EU, but what does she believe we can do at this critical time, when others seek to undermine us, to stop that sapping of enthusiasm for integration in terms of accession processes with the EU and the role of the new European political community, which we are part of?

The EU-Western Balkans summit takes place in Tirana on 6 December. I understand that the UK will not be present formally, because we are not in the EU, but the UK has a critical role in many of these locations. I am disappointed that we will not be there in an associate fashion or taking part in discussions. Will the Minister tell us what discussions she has had with friends and allies in the EU and what contact there has been between our special envoy and the EU special envoy in the region ahead of that summit?

We have heard today about Russia’s efforts to spread disinformation and undermine democracies across the region. I was concerned to hear of the locations in Serbia that Russia is using to spread disinformation across the region in relation to not only Kosovo but Montenegro, Albania, North Macedonia and elsewhere. Will the Minister say a little about what we are doing to share our expertise in counter-disinformation and cyber-security across the region to assist countries to have the strongest possible resilience against those Russian efforts?

[Caroline Nokes (in the Chair)]

Perhaps you could think about drawing to a conclusion.

[Stephen Doughty]

I am coming to my conclusion. I am on the final page.

[Caroline Nokes (in the Chair)]

Leave time for the Minister.

[Stephen Doughty]

I will leave time for the Minister, Ms Nokes.

I hope that the Minister can assure us that the Government see the Council as a crucial part of promoting democracy across our continent, fundamentally reinforcing the values that we all share, and that they will continue to support our delegation and its work in the months and years to come.

Oral Answers to Questions

Stephen Doughty Excerpts

Tuesday 8th November 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

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

The Minister will know the resolute support across the country, and across the House, for Ukraine. The people of Ukraine should know that and, indeed, Vladimir Putin should know that. However, there are unfortunately some siren voices suggesting otherwise, including from the far right of the US Republicans, and this is hugely dangerous. What are the Minister, the Foreign Secretary and the Prime Minister doing to challenge those who would give encouragement and succour to Putin in his barbarous actions?

Draft Sanctions (Damages Cap) Regulations 2022

Stephen Doughty Excerpts

Tuesday 18th October 2022 General Committees

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

It is a pleasure to serve under your chairmanship, Mr Stringer, and to hear from the Minister on these important matters.

As has been the case with the other sanctions and measures that we have debated over many weeks and months, the official Opposition will not oppose the measure. We welcome the steps taken to expand our sanctions regime, to make it more robust and to remedy any cracks in it. The focus today is obviously on Russia, but I assume that the regulations will apply to the range of UK sanctions, because individuals who seek protracted legal means to disrupt attempts to sanction them come from a number of countries. I hope that that is the case. I am sure that the Committee would agree that the evidence against Putin and his regime, and his supporters, remains incontrovertible. We have seen the recent actions with unmanned drones, allegedly from Iran, wreaking further destruction in Kyiv, where a young family expecting their first child in a matter of months were among those killed in the senseless barbarity of Putin’s war. We must do everything possible to take action against the Russian regime, all those who facilitate and support it, and indeed, put in place measures in our own legal, financial and regulatory systems to ensure that those supporters cannot continue to support Putin as they have done.

Before I consider the specifics of the measure, I thank the Minister for his letter on crypto currencies following our previous debate. I asked whether certain entities would be sanctioned, and although I know that the Government do not like to comment on such matters, I re-emphasise the importance of cracking down on how oligarchs hide their money and attempt to frustrate Government efforts against them. Some of those efforts are through legal means, for example the measure before us, or through the use of untransparent financial mechanisms. I hope that the two mechanisms I mentioned, Tornado and Blender, are under active consideration by the Government. I hope to hear from the Minister about that in due course, and about a wider review of the use of crypto currencies and evasion.

On the regulations before us, it is absolutely right that we should be able to designate and act against all persons and entities, irrespective of their financial power or the extent of their influence. It is right to disincentivise oligarchs and other designated persons from maliciously pursuing the Government through the courts by capping the damages they could receive. It is a prudent and welcome step. We know that many oligarchs have attempted to use not only the UK legal system but others across Europe to frustrate attempts to constrain their activities. Last month, according to findings at the European Court of Justice, it was revealed that 21 Russian business people were engaged in legal proceedings across the EU in attempts to overturn sanctions on them. Even when designated, those oligarchs hold awesome financial power to take matters into their hands and to continue to act as though the law does not apply to them. To specify the damages cap, as the Government have done, is a welcome step in constraining their ability to tie up designations in legal showdowns. What has been done today is absolutely right.

I hope that the Minister will also look at the wider ways in which oligarchs attempt to use our legal systems to evade measures against them, or to intimidate those who challenge them. We have all seen the rise in strategic lawsuits against public participation—the so-called SLAPP suits—which put huge pressure on those who seek to expose the activities of those individuals. The UK remains the most frequent country of origin for SLAPPs, with 31% of cases originating in the UK, according to the UK Anti-SLAPP Coalition. I hope that not only secondary legislation such as the regulations before us, but the Economic Crime and Corporate Transparency Bill, which is going through the House at the moment, and other legislation will look at ways in which we can limit the ability of those engaged in nefarious activities or in attempting to support the Putin regime or other regimes around the world using our legal system either to tie up the Government and frustrate the sanctions that are being implemented or to intimidate others who would seek to take proceedings against them.

That hugely important matter reflects broader concerns that have been expressed over many years, well before this phase of the invasion of Ukraine by Russia. Indeed, the issue has been raised previously by the Foreign Affairs Committee and in the Russia report from the Intelligence and Security Committee. We have frequently said that we must look at how our legal architecture, company formation agents, accountancy firms and other agents in particular are used by oligarchs to hide their wealth and their activities. We must ask about how those services are used to facilitate, support and encourage oligarchs to continue to attempt to evade Government sanctions and individuals seeking to expose them. We must question how those UK services are used to frustrate designations and regulation that might prevent those oligarchs from undertaking their activities. I hope that the Minister can comment on the use of the UK’s wider legal architecture and the Government’s plans to address that.

I also hope that the Minister can add to what he wrote to me about, namely the seizure, sequestering and repurposing of the assets of those sanctioned towards supporting Ukraine’s reconstruction and defence efforts. I understand the complex legal framework involved and why that has not yet happened, but, if I read between the lines in those letters, I have had encouraging words from the Government. I hope they come forward with the necessary measures sooner rather than later, because the needs of Ukraine are huge and we need to ensure that those responsible for this war and for the horrific atrocities of recent days pay the price and that those assets are repurposed towards Ukraine.

We welcome the regulations, and I hope to hear from the Minister about the other issues I have raised.

--- Later in debate ---

[Jesse Norman]

I am very grateful to both hon. Gentlemen who have spoken. Let us be clear that there has been a very broad sense of unanimity across the House on the issue. We very much welcome that support and the scrutiny offered by the Opposition parties, which can only make the legislation better and keep Government properly on our toes.

Let me start by thanking the hon. Member for Argyll and Bute who pointed out the importance of closing loopholes—he is absolutely right about that. As the hon. Member for Cardiff South and Penarth said on behalf of the official Opposition, there has been a constant process of introducing measures and then infilling, in response to a dynamic and evolving situation, precisely to address those loopholes. The regulations we are talking about in relation to Russia and Belarus apply to conduct by UK persons including not just anyone in the UK but UK nationals outside the UK and businesses incorporated or constituted under the law of any part of the UK. Of course, it is Government policy for those measures also to be given effect in overseas territories and Crown dependencies. As the hon. Member for Argyll and Bute will he aware, a lot of work has been done in relation to Companies House to track asset movements and give the enforcement authorities extra powers and speed to crack down on some of the loopholes he mentioned.

The hon. Gentleman said that the regulations are not before time, but if I may say so, I think that is incorrect. The Government brought forward this legislation before the summer recess, and the present cap that we are discussing will apply to all proceedings brought from 4 March. There has been a staggering level of sanctions introduction over the past few months, and I could show him four or five pages of specific measures that we have introduced. Those are targeted at a large number of individuals.

The hon. Member for Cardiff South and Penarth was absolutely right to ask about the question whether this was just about Russia. Of course not; he is absolutely right—it applies across the board. But even in relation to Russia we are talking about sanctioning more than 1,200 individuals and more than 120 entities. As my remarks about Elvira Nabiullina made clear, we are continuing to push down on designations in order to pick up people who have emerged as significant actors, or who are otherwise culpable and complicit in this dreadful invasion.

I am very grateful to the hon. Gentleman for his comments on behalf of the official Opposition. He is absolutely right that the recent use of unmanned drones is abhorrent and he will know that the Government and their allies are doing everything they can to support Ukraine militarily and in the field. I thank him for the questions he raised to which I responded in respect of the previous debate conducted by my colleague, the Minister for Europe. Of course, as the hon. Gentleman understands, I cannot comment, however one would like to, on specific entities, but the points he raised are absolutely well taken. His energy in pressing them is a constant source of active encouragement and support for the work we are doing and that which we have in hand.

The hon. Gentleman asked whether the Government will look at wider measures in relation to SLAPP suits. He is absolutely right to target that question, and of course we are reviewing the matter very closely. He also asked about the question of legal architecture. He will understand that the measures we have brought in are moving towards quite a calibrated restraint on the use of legal services for commercial purposes by oligarchs and other designated persons. But it is important to preserve access to rights legal advice, because however individuals might dislike the fact, it has always been our way in this country for hundreds of years that people are allowed to have, subject to law, their day in court, and proper representation. The cap seeks to limit the effects of that, but the principle is clear.

[Stephen Doughty]

I spoke about the scope of individuals to take legal action across the EU against their designation. Can he tell me, or write to me, about the numbers involved who have attempted to take action against the UK Government for being sanctioned? That would give us an idea of the scale of attempts to undermine the sanctions regime.

[Jesse Norman]

If I may, I will discuss and consider with officials whether we can properly respond, or whether, for reasons he will understand, that information has to be retained for present purposes. I can assure him that we are not seeing a large amount of litigation at the moment, but there obviously is the potential, and that is why it is prudent to introduce a cap. As I have said, that cap is backdated. I take the point that he has raised, and let me consider it with my officials.

Unless there are any other questions, I commend the regulations to the Committee.

Question put and agreed to.

Sanctions (EU Exit) (Miscellaneous Amendments) (No. 2) Regulations 2022

Stephen Doughty Excerpts

Tuesday 11th October 2022 General Committees

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

It is a pleasure to serve under your chairmanship, Mr Hosie. I would like to thank the Minister for his comments on the measures we are debating. I want to apologise, because in a previous debate I suggested that they were not in effect. They are, of course, because of the affirmative procedure, but we are only just debating them today. Obviously, it has taken a number of months, which is a concern to me, but we will not seek to divide the Committee today. We support the steps the Government are taking to enhance our sanction regimes, in relation not just to the terrible acts of Russia in Ukraine, but to a number of the other countries that are listed in the regulations.

On the subject of Ukraine, we have all been shocked by the scenes yesterday of attacks on civilian infrastructure. I saw locations that I drove past just three and a half weeks ago that had been hit by Russian missiles. They were clearly civilian areas; these are clearly war crimes. It is utterly horrific for the people of Ukraine, and this is a serious escalation. I draw attention to my declaration of interest on that visit, which I took part in a few weeks ago with other Members from across the House.

I am pleased we are debating these measures, which will apply across the board in relation to human rights abuses and destabilising situations across the world, from Belarus to Syria, Venezuela and the western Balkans —an area I visited recently. I have seen and heard about the activities of those who seek to undermine peace, human rights, stability and democracy in that region.

Specifically on Ukraine, this is no time for complacency. In his desperation, Putin will become more erratic. Our resolve will be tested. We will continue to work constructively with the Government on all the measures we are taking against Russia, but where we think they should go further and broaden the UK sanctions regime, we will say so.

As we know, using cryptocurrencies to evade sanctions and move money around the world was already illegal under UK law. However, the changes outlined today are necessary for those evading sanctions, because users of cryptocurrencies and related services do not have to rely on regulated entities to make transactions. Although ostensibly they are treated no differently to any other type of asset for the purposes of an asset freeze, the nature of virtual currencies could make it more difficult to detect that a sanctioned party is involved in a prompt enough fashion for anything to be done about it. As I have said previously, it is crucial that we do not look just at the wording in the sanctions, because it is their implementation and application that will make the real difference in dealing with all those who are sanctioned under a range of regimes.

It is clear that the Kremlin’s tendrils of influence are far-reaching, and we must recognise that the use of digital currency is not just a means of expanding the wealth of a sanctioned oligarch or indeed a member of the state Duma who is voting through the illegal attempted annexation of Ukrainian territory. It is also a way for the Kremlin to impose its will beyond Russia’s borders and expand its malign influence into the fabric of economies, polities and societies around the world.

Through the use of crypto and other digital currencies, hostile regimes can inject capital into the democracies of the world for the purposes of swaying elections, emboldening political forces who continue to spout the lines of dictators like Putin. The US State Department recently revealed that Russia has covertly given at least $300 million to political parties, officials and politicians in more than two dozen countries since 2014 and plans to transfer hundreds of millions more, with the goal of exerting political influence and swaying elections. The document from the State Department details that Russia is paying for those in cash, cryptocurrency, electronic fund transfers and lavish gifts. They move the money through a wide range of institutions to shield the origins of the finances, through foundations, think-tanks, organised crime groups, political consultancies, shell companies and, of course, Russian state-owned enterprises.

After being asked if blockchain-based currencies could be used effectively to evade sanctions, Elizabeth Rosenberg, the US Assistant Secretary for Terrorist Financing and Financial Crimes, was very clear. She said,

“Yes, Senator, that is possible.”

Senator Elizabeth Warren, who is a real authority in this area, said she had been worried about Russian elites leveraging cryptocurrencies ever since Putin’s regime invaded Ukraine in February. She said,

“We already knew that countries like North Korea had used crypto to skirt sanctions and launder…hundreds of millions of dollars. And Russia could easily be part of that.”

I come to a critical issue on which I would like to hear some answers from the Minister. That is the issue of so-called mixers or tumblers. Those terms refer to mechanisms that are used to jumble cryptocurrencies, holdings and transactions, making them even more undetectable.

An example is the group Tornado Cash, which is a mixing service that lets users make their Ethereum transactions untraceable, by obfuscating the origin of the transactions. The United States sanctioned that service in August, along with the Bitcoin mixer called Blender. The US Treasury is clear that those mixers had repeatedly failed to impose effective controls designed to stop criminals from laundering funds. It did something clearly and urgently about that.

I reviewed our sanctions list and currently neither Tornado nor Blender appears. I may have missed something. I would like to understand from the Minister whether those mixers and blenders are currently sanctioned, and if not, why not? Because the US Treasury has been very clear. It said on 8 August:

“Tornado Cash…has been used to launder more than $7 billion worth of virtual currency since its creation in 2019.”

It specifically referred to links to North Korea and the Lazarus Group, a state-sponsored hacking group, and to the use of Blender for similar transactions involving hundreds of millions of dollars. I fear that those mixers and blenders may have the ability to allow the cronies of Putin, who support his regime, to circumvent the sanctions we are debating today. I am concerned that it does not appear that we are taking action against those mechanisms.

I appreciate that the technology is evolving and emerging all the time but, if our closest ally has taken these measures, it seems odd that we do not appear to have done so. I am happy to be corrected if that is not the case. I hope the Minister can answer questions on that. What discussions are we having with our allies to ensure that we are at the cutting edge of methods to deal with those being sanctioned under all of these regimes, but particularly in relation to Russia and Ukraine, given the situation today, so that they are not able to evade them? I have raised the issue of evasion of sanctions a number of times in debates. I am concerned that these are wily characters and regimes who are attempting to find every single way around our measures and protections. We have got to ensure that we stand clearly against them.

Secondly, what discussions are the Minister and his colleagues having with the Treasury about conversations with the International Monetary Fund to ensure better regulation of cryptocurrencies, so that the risks around them are mitigated? We will debate the Economic Crime and Corporate Transparency Bill again shortly. I know that these matters will be of great interest to Members across the House, who want to see a toughening up of our regulation in this space. I put these proposals forward in a constructive spirit, and I hope the Minister will see it that way.

Thirdly, what further consideration has been given by the Government fully to implement the recommendations of the Intelligence and Security Committee’s Russia report, particularly on conversations with that Committee about the issue of illicit finance and cryptocurrencies? It made many recommendations but, unfortunately, the Government have dragged their heels on that. There is no reason to do that. The actions of Russia and other regimes are absolutely clear.

I have a few final remarks. We welcome the measures today that enable Government Departments and other agencies to share information and assist the Treasury and the office of financial sanctions implementation to discharge their functions, widening the definition of a relevant firm, including cryptoasset exchange providers. Those are prudent and necessary steps to take.

I thank the Minister and his colleague—the Minister of State, Foreign, Commonwealth and Development Office, the right hon. Member for Hereford and South Herefordshire (Jesse Norman), who also covers sanctions—for their replies and detailed letters to me in answer to previous questions. I come back to the question of implementation. The Ministers have answered some very clear questions about the staffing and resourcing of both the sanctions unit in the Foreign, Commonwealth and Development Office and the office of financial sanctions implementation. However, we hear from other parts of Government about further efficiency savings. Will the Minister confirm that the new roles in both of those bodies are safe and will not be quietly depleted? In fact, we need more of them, not less, at this critical time. I hope that he can reassure me on that point. We have to ensure that they, and other bodies, such as the National Crime Agency, have the resources to follow through on the implementation of the regulations.

Because we regularly debate the sanctions regime in this place, particularly in relation to Russia, I also wonder whether the Minister has anything further to say on proposals to designate United Russia as a terrorist entity, given the actions of those in that party and the actions of recent days. That proposal has certainly been put to us. Does he have any further thoughts on it?

In a letter sent to me after our last debate, the Minister’s colleague, the right hon. Member for Hereford and South Herefordshire, said in response to my questions about the sequestration and repurposing of assets that the Government were looking at

“what options there may be to do so and are working closely with HM Treasury to make progress.”

He also wrote:

“we are looking at what we can do in the long term to raise money for the reconstruction of Ukraine using Russian assets.”

That is a welcome statement, but we are keen to see that happen sooner rather than later. The issue was raised with me regularly on my recent visit to Kyiv, and was raised with me again by Ukrainian counterparts when I attended the Warsaw Security Forum in the past few days. I will make a declaration about that in due course.

Those issues are being raised by our Ukrainian friends and allies—and by many of our other allies. There will be huge costs associated both with supporting Ukraine in the way that we are—absolutely rightly—and with reconstruction. We must ensure that those we sanction in relation to the conflict pay the price, and ensure that our sanctions regime as it relates to all the other countries involved—we mentioned Belarus and other situations—is as robust as possible.

--- Later in debate ---

[Leo Docherty]

I am grateful for colleagues for their constructive comments and their perfectly valid questions. I will attempt to cover off some of them as I conclude.

I agree entirely with the hon. Member for Cardiff South and Penarth’s characterisation of the appalling ballistic strikes from Russia on Ukraine yesterday. It is important that we put on record our absolute horror at the scale and nature of that activity, and we are as one in our condemnation of the continued barbaric impact of this illegal war on the people of Ukraine. I acknowledge his personal interest in that country.

The hon. Gentleman made the perfectly sensible point that these kinds of transactions—the sort of illicit activity that these instruments are seeking to tackle—are already illegal. What the legislation is doing is tightening up our approach to it. He asked about application. We should acknowledge the context: in our sanctions response so far this year to the outrageous Russian invasion of Ukraine, we have put in place a very robust sanctions package that includes more than 1,200 individual sanctions, more than 120 entities and 126 oligarchs, who have a total net worth in excess of £130 billion. We can feel pleased that we have been active and quite aggressive in terms of our sanctions, but there is always more to do because we are aware of the extent to which Putin and his cronies will find ways around this globally and cryptocurrencies might be one of those elements. That is why we are seeking to tighten up this particular area, but I agree with him that we must be cognisant of the extent to which Russian wealth around the world is being weaponised. The west needs to be urgently aware of that.

The hon. Gentleman used that as a good springboard to go into a discussion about so-called mixers and tumblers. I note that Tornado Cash was sanctioned recently in the US. I am confident that Tornado Cash and Blender are entities that the Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Hereford and South Herefordshire, will be looking at, but I commit to him writing to the hon. Gentleman to confirm that those two entities are under consideration.

The hon. Gentleman also asked about the extent to which we are discussing with allies the mechanisms being used for sanctions evasion, and for an update on the discussions between His Majesty’s Treasury and the IMF. I will ask my right hon. Friend to include that in his letter when he has an opportunity to write.

[Stephen Doughty]

I thank the Minister for those comments. However, he will understand my concerns that those entities were sanctioned by the US, our closest ally, in August. It is now October; that is three months where evasion could have been going on. I appreciate his willingness to look at both those issues with his colleague. Will he commit to a wider review of all types of mixers and tumblers—I named two—that might be used in that way?

[Leo Docherty]

We are in complete agreement. I agree that this is urgent and it should be a broad consideration of the tumbler facility. I commit to an urgent update from my right hon. Friend the Member for Hereford and South Herefordshire on that. He might also usefully cover the finance element of the Russia report, as the hon. Gentleman rightly mentioned. He then asked a perfectly valid question about staffing levels at Departments and public agencies with regard to sanctions. Having met members of the legal team earlier today, I am confident that we have some of our best people on it. It is an urgent priority and I think we have the required staffing levels.

The hon. Gentleman mentioned United Russia. I will not be drawn into giving an answer to that now, but I commit to formally replying to that question. He also asked about sequestration. That is a live topic as we consider the remarkable financial challenge of the reconstruction of Ukraine. Clearly, there is a legal context, but that is actively under consideration in the Department. We have already embarked on a great body of work in advance of us hosting the Ukraine reconstruction conference next year. Of course, it is more urgent than that, and it is something we are considering.

[Stephen Doughty]

The Minister is generous. I have mentioned the importance of keeping at the cutting edge of this. There is an important group established by Ambassador McFaul, the former US ambassador, in which a number of UK experts are involved. However, I am not clear whether there is UK Government representation in that. Will the Minister assure me that we are keeping in close contact with such groups that are trying to be at the cutting edge, to ensure we have the toughest regime possible implemented in the quickest way?

[Leo Docherty]

I commit to keeping that on our radar. That sounds like a useful proposition, so I am happy to commit to it.

I was pleased to hear questions from the hon. Member for Walthamstow. She asked some good questions about implementation, because this is all about implementation. If we cannot implement it, it will not make a difference and there is no point in doing it. I can give her absolute reassurance that we are in lockstep with our EU and US allies. This is a global effort that is intelligence-led. We each use our domestic law, but this issue is very much joined up because it is a global threat and the response that it demands is global. All our agencies are involved on a daily basis in prosecuting and pursuing this kind of threat.

The hon. Lady asked about public authorities, the balance of compulsion and them volunteering information. Our expectation is that this involves bodies such as the Financial Conduct Authority, for example. It is designed to ensure that they have a road map to being helpful, rather than requiring them to do something they do not want to do. Most people will want to be doing this; it is designed to lay out a clear pathway to information being shared urgently with the Treasury. That is our expectation, but we will measure the response and use that as a mechanism for holding to account and judging success.

Sanctions

Stephen Doughty Excerpts

Thursday 22nd September 2022 Commons Chamber

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

I welcome the new Minister to his place. I look forward to working with him on sanctions, as I have with his many predecessors. I welcome the opportunity to discuss sanctions on Russia again and I am pleased to see such a wide range of issues being covered in today’s measures, which are mainly amendments.

My first question is why so many amendments are needed. The Minister has answered some of that, as do the explanatory notes, but—I do not want this to be seen as a criticism of the officials, who work incredibly hard to put such regulations together—an extraordinary number of errors and omissions appear to have been made, as he just confirmed. That underlines the point that I have made in many previous sanctions debates about the resourcing and assistance that is being given to critical units in the Foreign, Commonwealth and Development Office and elsewhere, and whether that is enough. I know that it has been expanded and there are more officials, but we need to have the support in the system to ensure that we get such things right first time. Putin and his cronies will be—we know that they are—seeking every single loophole, omission and error to try to circumvent them. We must not allow them to do that. I will come to further comments about that in due course; I hope that the Minister will explain that in his closing remarks.

Obviously, in the last few weeks, we have seen remarkable progress by Ukrainian forces in the east and south of the country in an incredible counter-offensive. Indeed, Ukrainians have shown extraordinary courage, strength and ingenuity in the face of Russian aggression. Those efforts, thanks to our support and that of others, are thankfully bearing fruit. As we enter a new phase of the conflict, it is more important than ever to show our firm resolve to stand behind Ukraine in every way, not only in the military domain but politically, economically and diplomatically as well as, crucially, in the consequences that Putin and his cronies must face for their illegal and barbarous actions.

As I mentioned in the previous debate, I have just returned from a trip to Kyiv and the surrounding area. I refer again to my impending entry in the Register of Members’ Financial Interests as a guest of Yalta European Strategy. I was deeply moved by the spirit, courage and bravery shown by not only President Zelensky but all the Ministers, officials, Members of Parliament, members of civil society and Ukrainian citizens. I returned with a deep sense of urgency, a personal commitment and a solemn duty to do everything that we can to end President Putin’s egregious display of aggression, violence and cruelty, which we have sadly seen so brutally in the scenes from Izyum—the mass graves, the torture and the stories coming out of there. We heard in the previous debate about sexual violence. On our visit, we heard some truly horrific things and we saw with our own eyes the destruction of civilian infrastructure.

The former Minister, now Foreign Secretary, informed me in May that 150 individuals were working full time in the sanctions taskforce in the FCDO and that the Office of Financial Sanctions Implementation had at least doubled in size, but I have tried to get further clarity about the resourcing going in. I asked about that in the last two debates and I was promised a letter by the Minister. I have not had that and I hope that the new Minister can chase that up and get some answers. We support these sanctions and the measures, but it is only right that the Opposition can scrutinise and understand whether the Government are properly resourcing them. What extra financial resources have been given to those bodies? What conversations has the Minister had with the National Crime Agency to ensure the proper enforcement against those who breach the sanctions regime?

In the previous debate, I asked about the potential circumvention of sanctions. Numerous allegations have been put to me about a range of industries, such as the steel industry—we have discussed measures on those sorts of products and there are measures in these regulations—where Russia is attempting to use third countries potentially to export steel and other key products, some of which are ending up in the UK and countries across the west that are imposing sanctions. That is an absurd situation and I hope the Minister can provide more information about that and about what we are doing to close the loopholes that Russia is attempting to use. We can have the toughest regime on paper, but if Russia is in practice finding ways around it, that is not acceptable.

I was struck on the visit to Kyiv by the importance of ratcheting up the sanctions. Indeed, many of the measures proposed in these regulations are about expanding the sanctions, and that is a good thing. However, it is crucial that we work with some of the best minds around the world to look at other areas where we can bring pressure to bear. Indeed, McFaul, the former US ambassador to Russia, and others, including from the Ukrainian Government, have a working group looking at additional ways in which they can expand these sanctions and make them tougher. I was concerned to be told that there is apparently no UK representative on that group. Can the Minister clarify why that is the case? We need to have somebody on that group, because we need to be leading, with the United States and others, including our friends and allies in the European Union, to ensure that we have the toughest, broadest and deepest regime, and that we think about innovative ways in which we can really hit those people around Putin who are providing the backing financially and otherwise for his actions in Ukraine.

In the detail of the sanctions packages being announced today there are many welcome things—prohibiting the import of oil, coal and gold and the export to Russia of maritime equipment, oil refining technology, jet fuel and other materials. Those are absolutely critical and the Labour party obviously welcomes the Government’s movement on them. However, one area that did raise some concern for me was the prohibition of the export of goods which have

“potential use for internal oppression”.

Obviously, it is a good thing that that is included in this package, but I have to ask why there was any possibility that UK public or private bodies were ever providing Russia with materials that might be used for internal oppression in the first place. I hope that the Minister can explain to us what kind of exports have been going on. This matters, because this war did not start just seven months ago; it started in 2014 or far before that. We have known of Putin’s internal repression against democratic opposition and others for years, so I seriously hope that we have not been providing support to him that could have been used to quash internal opposition in Russia.

The explanatory note refers to micro-organisms and toxins. Again, I want to understand what assessment has been made of the volumes of any such materials that have made their way from the UK to Russia, and why that change had not been brought to the House sooner. These are very serious matters and—particularly given Russia’s record of using weapons of mass destruction, including in this country—I seriously hope that no UK company has been exporting any materials that have got to Russia in this way. The designations in SI No. 792 are welcome, but I come back to the issue of swiftness and responsiveness, and why—seven months into this phase of the war—we are only debating such a designation today.

I ask the Minister, and I have asked this in all the previous debates on sanctions, whether he has any further specific proposals not only to freeze assets, but to confiscate and sequester those assets—not least because of the huge costs involved in continuing to support Ukraine, which we absolutely must do, but also because of the clear costs there will be in reconstruction and making sure that Ukraine can develop and survive after this war is over. Indeed, this request was made to us by many of those in the Ukrainian Government, other officials and Members of Parliament from many parties while we were in Kyiv just weeks ago. They want to see that done. It has been done in a number of countries, and other countries are looking at how they can sequester and use assets. I know that it is not straightforward and that it might require further legislative change, but can the Minister provide some clarification?

We have had the issue raised of travel by individuals designated under these sanctions regimes, whether the issuing of tourist visas to Russians should be allowed—I certainly do not think it should be—and of designating Putin’s United Russia party as a state sponsor of terrorism or as a terrorist organisation, just as we have Hezbollah, Hamas and other parties in other locations that are sponsoring terrible and heinous acts of aggression and crimes against humanity. What are the Government’s thoughts on those proposals?

The scope of these sanctions measures is of course wide, and I think it shows the resolve we have to tackle those who are backing Putin, but we must deal with the wider ecosystem around those who are backing him. I know that the Economic Crime and Corporate Transparency Bill has been published today, but we have to tackle the whole ecosystem of the London laundromat and all those individuals who have been backing and sustaining his regime. I certainly hope that in debates to come we will see tough action taken in that regard.

Overall, Labour wholeheartedly supports the measures outlined today, and I hope the Minister will answer some of my detailed questions. Our sanctions regime is integral to Britain’s role in supporting Ukraine and holding Putin’s regime accountable for the acts of violence that it continues to perpetrate against civilians across Ukraine. This winter, the people of Ukraine will weather the even more difficult storm of the brutal, egregious and unconscionable war of aggression that they face, and we must back their bravery by being brave and bold with sanctions, and by not providing succour for any of those who are supporting such aggression.

--- Later in debate ---

[Jesse Norman]

I thank all hon. Members who have spoken in this very interesting debate. It is a testament to the intense interest and passion that the Russian invasion of Ukraine has raised in this House that, even on topics as apparently technical as this one, we could have such a vigorous and energetic debate.

Let me pick up as many as I can of the points that have been raised. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) spoke truly about how highly effective sanctions have been so far, as evidenced by the Treasury Committee. I would say that it is more like turning off a light, but the danger is that the dimmer switch may be activated the other way. That is one thing that we are constantly dealing with. I will say a little about it more generally, partly in response to the shadow Minister, the hon. Member for Cardiff South and Penarth (Stephen Doughty), because this is an evolving situation.

My hon. Friend the Member for Thirsk and Malton mentioned Bill Browder, a very interesting and brilliant man whom I have met. The idea about opening books is a very interesting one. We have a lot of interesting ideas in this House; one of the strengths of the open parliamentary debate that makes our system so much stronger than the Russian alternative is that we are willing rapidly to evolve our response to public opinion and to such suggestions, for which I thank my hon. Friend.

My hon. Friend also made a point about crypto that I think was right. It is important to say that crypto-assets are treated in exactly the same way as any financial asset. We therefore expect these measures to be as widely respected by entities, even if enforcement proves to require further work.

[Stephen Doughty]

I have just received notice that on 11 October we will be debating another set of amending regulations on sanctions—not only against Russia, but against a whole bunch of regimes—to deal with the very fact that crypto-assets are not treated in the same way as other financial assets for the purposes of sanctions. In fact, there appear to be a whole series of loopholes that the Government are only getting around to dealing with on 11 October. We really need to move a lot faster. We need to be up to speed with what is actually happening and with how people are using these markets.

[Jesse Norman]

If I may say so, I do not think that it is possible to move faster than having a debate within two days—in fact, a day and a half—of Parliament’s resumption after the interval following the unfortunate passing of Her late Majesty the Queen. The rules apply. As a further rebuttal to the shadow Minister’s point, my reply to the suggestion that something can somehow be made perfect, as though it were set in stone forever, is “Of course not.” This is a rapidly evolving situation.

My hon. Friend the Member for Isle of Wight (Bob Seely) talked about lawfare. He is exactly right that some very well-heeled and well-resourced individuals are using all their resources, as corporates and as individuals, to try to thwart us. That is why the response must continue to evolve, and it will.

On the point raised by the hon. Member for Tiverton and Honiton (Richard Foord), the Office of Financial Sanctions Implementation in the Treasury has more than doubled in this financial year. The response that is being made is being taken very seriously, and there is a continuous effort to build sanctions capability across Government.

I take the point that the hon. Gentleman made about advice for the higher education sector. I can also tell him that a very effective team in the Department for International Trade is helping businesses in this country to deal with this issue, which, again, we take extremely seriously.

My hon. Friend the Member for Isle of Wight, when referring to lawfare, mentioned Freshfields. I was sorry to hear the name mentioned, given the respect in which that firm is held across the country. I wish it were not true, if it is—I hope it is not—but it was interesting that my hon. Friend mentioned it.

Republic of Belarus (Sanctions) (EU Exit) (Amendment) Regulations 2022

Stephen Doughty Excerpts

Monday 5th September 2022 General Committees

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

It is a pleasure to serve under your chairmanship, Mr Hosie. I welcome the Minister to his first of our discussions on sanctions regimes. He will know from the record that when we have debated them in the past, the Opposition have always approached them in an entirely constructive manner. We will not seek to divide the Committee today, but I want to raise a number of issues and ask the Minister some questions.

We have always supported the Government’s course on sanctions and on taking the toughest and deepest possible action against those who are taking direct action in Ukraine—in the case of Russia—but also those who are aiding and abetting, as is the case with Belarus. Where we have thought that sanctions could go further and be stronger, we have made that argument, and we will continue to do so. I thank the team in the Foreign, Commonwealth and Development Office and others who have worked on putting together the sanctions, which obviously required an intense amount of work.

We have wholeheartedly supported the Government; indeed, the shadow Defence Secretary, my right hon. Friend the Member for Wentworth and Dearne (John Healey), has just been making that clear in the Chamber following the statement on military support for Ukraine. The economic, diplomatic and political pressure that we bring to bear on Russia and those aiding and abetting it is also crucial, so these are welcome measures against the despotic regime of Lukashenko in Belarus.

The House may have been in recess for the last few weeks, but the war against Ukraine and its people has raged on, claiming more lives, wreaking further destruction and continuing to undermine the global rules-based order. We have seen horrific reports of the forcible transfer of Ukrainian civilians, the separation of families and so-called filtration camps. A recent report by Human Rights Watch exposed that more than 3.4 million Ukrainians had entered the Russian Federation from Ukraine, including more than half a million children. Deep concerns have been raised with me by Ukrainians and others about what is happening in those camps. I hope that the Government give that due consideration, as well as the bulk of the illegal armed action that is taking place in Ukraine, in the measures that we take.

It is very clear that, although Russia is the principal perpetrator of aggression towards Ukraine, the Kremlin is not acting alone, as the explanatory notes to the measures clearly set out. Those who aid and abet the Russian regime—Putin’s regime—must be held to account, which is why it is crucial that we approve these measures today. Lukashenko has long been a pawn of the Putin regime, and his brutal, corrupt and autocratic grip on Belarus has made it a regional pariah, undermining democracy at home and peace and stability abroad, particularly in the near region.

We have only to look at the perilous diversion and grounding of Ryanair flight 4978, the irrefutable rigging of the 2020 presidential elections and the many repressive measures taken against the Belarusian opposition, and indeed civil society and those who want freedom of speech in Belarus itself, to show that Lukashenko shares Putin’s penchant for tyranny, repression and disregard of both domestic and international law. That was set in train by the formation of the so-called Union State between Belarus and Russia, which has facilitated the use of Belarusian territory and infrastructure to launch attacks against the people of Ukraine.

Although Belarusian forces have not been committed, as the explanatory notes make clear, Lukashenko’s complicity in the war cannot be overstated. He effectively allowed Putin to invade Ukraine via Belarus, he has surrendered the use of his country as a platform for air raids and missile strikes, and he has tied the regime’s future to a war that has led to the death of thousands of civilians. That has been known from the very first days. We all saw the evidence for what they were doing—it is there, as clear as day—and we have seen some horrific actions in recent weeks, including the launch of missiles towards Ukraine.

The Prime Minister stated that it was the Government’s intention to apply sanctions to Belarus on 24 February. That was confirmed by the Foreign Secretary the same day, so I have to ask the Minister why it took until the start of July for the sanctions to be brought into effect, and why it has therefore taken until today for the Committee to be given the opportunity to debate them. I do not doubt the Government’s intention, and nor do I criticise what they are putting forward, but time and again we have been lagging behind and not moving at the necessary speed. If it is a question of resourcing for the excellent teams in the FCDO and elsewhere that have been doing this work, the Government really need to catch up.

After our most recent debate on sanctions, the Minister’s predecessor, who is now the Education Secretary, assured me that the sanctions taskforce at the FCDO contained 150 permanent staff, and that the Office of Financial Sanctions Implementation had doubled in size. Can the Minister confirm how many permanent staff are now in OFSI and the sanctions taskforce? Has the Department has assessed staffing levels again, and are they sufficient to provide the swiftness that we need? The Ukrainian people do not have time for these sorts of delays when it comes to countries such as Belarus and individuals in those regimes who are taking these actions. We need to move swiftly. If it is a question of capacity, I urge him to look at whether more permanent staff can be brought in urgently.

I agree with the point made by the hon. Member for Basildon and Billericay about the number of individuals being targeted, which seems small compared with the number of those who we know are involved in the Belarusian regime, and potentially in orchestrating and authorising these actions against Ukraine and in support of Putin. I hope that the Minister will answer that question about the numbers involved, come back to us in due course, and keep the measures under constant review. With the measures against Russia, the names of individuals have been regularly updated. I hope that that will occur in relation to Belarus and others.

Lukashenko had the gall the other day to congratulate Ukraine on its independence day. I was marching with the Ukrainian representatives and refugees in Cardiff just last week. Lukashenko said that Belarus will

“continue to stand for the preservation of harmony”.

We know that is absolute nonsense, because less than a month prior to those words being issued he fired 25 missiles, hitting targets in the Chernihiv region and around Zhytomyr on the day when Ukraine celebrated its statehood day.

I echo the words of Sviatlana Tsikhanouskaya, who condemned the attack, saying:

“Lukashenka can’t fool anyone. He is guilty of crimes against Belarusians & Ukrainians & must be held accountable.”

She rightly stated that Lukashenko is effectively allowing Belarusian lands to be used as

“an aircraft carrier for Putin.”

Our actions here in the UK must match that bravery and the starkness of what she and those who work around her, who have often been put at immense personal risk, are setting out.

I also want to ask the Minister about the statement that was made in November 2021, when the sanctions against Belarus were last debated. The then Under-Secretary of State, the hon. Member for Aldridge-Brownhills (Wendy Morton), stated that our

“actions work best when combined with other diplomatic and economic measures, and the UK has assisted independent media and civil society organisations in Belarus”.—[Official Report, 4 November 2021; Vol. 702, c. 1076.]

Can the Minister explain what support is being provided to Belarusian civil society, much of which is being targeted by Lukashenko, to supplement and complement the sanctions that are being debated today? Clearly, the support that has been offered has not been enough to stop the repressive activities that we have seen, as well as what he has being doing inside Ukraine.

Thirdly—I have made this point in many debates on this subject—what consideration is being given to moving beyond the freezing of assets, travel bans and so on to the seizure and repurposing of the assets, whether Russian, Belarusian or otherwise, of those who are directly implicated in the illegal war against Ukraine? We know that demands for reconstruction, humanitarian support and other forms of support for Ukraine are immense, and they are increasing. There is a fiscal reason for ensuring that we get additional resources in, but many people are rightly asking why some assets will sit there, effectively dormant, without being seized and repurposed. What further consideration has been given to that?

In the impact assessment, there is specific mention of issues relating to Belarusian steel and iron products. I am pleased to see those measures. It has been suggested to me—I wonder whether the Minister can shed any further light on this—that materials are being exported from Russia and Belarus via third parties in the steel and iron market, and potentially making their way to our shores and those of allies. It would be deeply concerning if such sanctions-busting activity was going on, either through the rebadging of products or by misleading people about their origins. If the Minister does not have the details today, I would welcome a letter from him on that. What measures have been put in place to ensure that diversionary routes are not being used to send products—particularly high-value products—that originated in Russia or Belarus to our shores? How will we ensure that the measures set out in the regulations are absolutely robust and secure?

The explanatory memorandum states that air and space goods have not been included, as they were in the measures against Russia, because

“Belarus does not have the exact same role as Russia in the war against Ukraine.”

That strikes me as slightly odd. We ought to be taking the toughest measures. It is very clear that, although Belarus has not committed its own troops, it is part and parcel of what Putin is doing, in providing a launchpad—that so-called aircraft carrier—to use against Ukraine. I cannot understand why we would then give Belarus an exemption on aviation and space goods. I recognise that that is probably a fairly small part of its market, but we should not be giving it any scope whatsoever for economic benefit from products that are either directly or indirectly linked to the actions that are taking place in Ukraine. I hope that the Minister can explain why that exemption has been made.

It is clear that Lukashenko must feel the pressure from the west as much as he does from the east. We therefore welcome the overall package of sanctions that the Committee is considering today, which represents a considerable step in the right direction. The war is continuing for far longer than was ever estimated at the beginning. I fear that it will only be protracted and worsen in the months ahead, so we must ensure that our sanctions regime can expand in real time, in real response to the measures taken by Russia with the assistance of countries such as Belarus and the Lukashenko regime. We fully support the regulations. We will not divide the Committee, but I hope that the Minister can answer some of my questions.

--- Later in debate ---

[Rehman Chishti]

Yes. I thank my officials for the note over here, but let me just answer that point. I am trying to multitask in reading, reflecting and answering; hopefully my lawyer’s training helps in that regard. I get the point raised by my hon. Friend. I think the officials get the point. We have to do everything we can. I have tried to give an overall picture with regard to the number of individuals, but his point is that looking at the scale and size of the country, we have to do everything we can to ensure that as many of those individuals who need to be held accountable are held accountable. I get that, and no doubt officials here get that, and it will be taken back and looked at. I will write to him specifically on that point with further details so that he gets the fullest answer.

I want to address another point raised by the hon. Member for Cardiff South and Penarth, about why we are replicating measures made on 28 April. Why are we doing it now? His point was with regard to the timing of the different regulations. The new measures are the latest in a co-ordinated package of measures that the UK has introduced in response to Belarus’s support for the Russian invasion. The point I made earlier was that we put a number of measures and designations into play prior to the invasion. The new criteria that we have put in place extend and broaden the group of individuals who can be held accountable for the unacceptable behaviour of aiding and abetting Putin’s financial actions, and supporting the aggression in Ukraine.

Since the invasion of Ukraine, we have launched a series of sanctions targeting Belarusian individuals and organisations who have aided and abetted this reckless aggression. We designated 47 Belarusian individuals and seven Belarusian entities under the Russia sanctions regime. We also introduced a 35 percentage points increase in duties on a range of products imported from Belarus. Those measures are in addition to the wide range of measures that we have already imposed on Belarus under our Belarus sanctions regime, which include sanctions on Lukashenko and members of his family, and on other individuals and entities.

With regard to the third point that the hon. Gentleman raised on the issue of steel, iron, aviation, space and goods, I will take that matter away and make sure that it is answered as fully as I can, to do justice to the answer, rather than reflecting on it now. I will make sure that he gets a full answer on that specific point.

[Stephen Doughty]

Will the Minister give way, briefly?

[Rehman Chishti]

I will raise the point with my officials tonight, to make sure that it—irrespective of what may happen tomorrow or the day after—can be put into the system today and fully looked at. I say that to my officials as the Minister at this point in time.

--- Later in debate ---

[Rehman Chishti]

Sure. I am grateful, Mr Hosie. I was trying to reiterate that the point was so important that it needed to be conveyed, taken away and looked at. I get the point on that very basis.

[Stephen Doughty]

I did get a helpful letter on 17 May from one of the preceding Ministers, who is now the Education Secretary—who knows what he will be doing tomorrow? He gave me some further detail on the resourcing, and helpfully said that the task force now has 150 members of staff. Can the Minister give some clarity on whether they are permanent or temporary staff? Secondly, there was no detail on when the new staff—the Office of Financial Sanctions Implementation—are going to be in place, just that the recruitment had commenced. It is crucial that we boost those numbers as quickly as possible. These are complex measures and I know that is why some of them take some time. We have got to have the resourcing in place to ensure that they can be brought forward speedily.

[Rehman Chishti]

With regard to the answer given by the former Minister on the figures, I want to be frank and clear, because it is a specific question on the numbers and details that the hon. Gentleman has asked. I can ask officials to look at that specific point, and at the breakdown he has asked for. In my early days, when I came in as Minster, I went down and met and thanked the sanctions team. The work that they do in the evolving circumstances is with the latest information and evidence available. We have increased the numbers of staff and officials working on sanctions. The question that the hon. Member asked is about a specific breakdown; I will ensure that he gets a full update regarding that specific point.

[Stephen Doughty]

It is not just the Minister’s Department; it is also the Treasury, because, crucially, if any of these sanctions are to work in practice, it is also about companies and individuals, and for those who might be trading or engaging with them to be properly informed and have the right information to actually implement them. Crucially, UK businesses, and others, who might have had partnerships or engagement with Belarusian individuals must have that information, so I hope that the Minister will raise it with the Treasury.

[Rehman Chishti]

I will ensure that every Department that is relevant and connected, with regards to the imposition of sanctions and the figures that he has asked for, makes sure that it answers his question fully and frankly because I think that is absolutely important. In my time in this role, I have tried to engage with parliamentarians across the House and now the questions must be fully answered. If I have missed any specific points raised by any Member, I will ensure that the officials read the document and come back and answer those specific points.

My hon. Friends, it is the responsibility of the United Kingdom and our allies to support Ukraine and take tough action against Putin and those who support his illegal invasion. In co-ordination with our allies, we continue to introduce the largest and most severe economic sanctions that Russia has ever faced, and that we have ever imposed. I am led to believe that the latest figures we have, regarding the situation in Ukraine and Russia and the sanctions that we have imposed, is more than 1,000 individuals and more than 100 entities.

On a recent visit to Canada and to the United States, I have had conversations with our counterparts to ensure that we do all we can, in a co-ordinated manner, and in line with the criteria set by the British Parliament, to impose the swiftest and firmest sanctions that we can regarding individuals, whether in Belarus or in Russia, linked to the aggressive, unacceptable behaviour that we are seeing in Ukraine. My right hon. Friend the Foreign Secretary has committed to going further, and we will continue to do so until Putin ends this war of aggression. It is a matter for Putin to end it. Therefore, until that happens, we will do everything that we can, using all possible levers, to ensure that those who are responsible for that unacceptable behaviour are held to account.

I thank the Committee for their insightful contributions and support for the Republic of Belarus (Sanctions) (EU Exit) (Amendment) Regulations 2022. I hope the Committee will support the regulations. I know the Committee has said it will, but I say that again, and thank the Committee for its support regarding the regulations. On the points that have been raised by the Opposition spokesman and others, I will ensure that the officials take those away and respond to them in as full a manner as possible.

Question put and agreed to.

Resolved,

That the Committee has considered the Republic of Belarus (Sanctions) (EU Exit) (Amendment) Regulations 2022 (SI, 2022, No. 748).

Human Rights Abuses and Corruption: UK Sanctions

Stephen Doughty Excerpts

Thursday 21st July 2022 Commons Chamber

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

I thank my hon. Friend the Member for Rhondda (Chris Bryant) and the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) not only for securing this critical debate but for their assiduous leadership on these matters across the House. I also welcome the Minister to his new role. I am delighted that we are engaging in such important discussions before the House rises for the summer, and I thank Members across the House for their thoughtful and valuable contributions to the debate.

Let me begin by reiterating Labour’s support for the Magnitsky sanctions regime introduced back in 2020 and acknowledging the constructive nature of interactions between the Government and the Opposition on, for example, the implementation of sanctions on Russia since its illegal and barbarous invasion of Ukraine. Indeed, I have just received a summons to a debate at the start of the new term on sanctions on Belarus.

Where the Government have got it right, we have supported them, but where we believe they should and could have gone further, we must say so. I express my heartfelt condolences to the family of Sergei Magnitsky. If we are to honour his memory, the full force of our sanctions regime must be utilised to root out and condemn human rights abuses worldwide. Across the House, we know that sanctions work only when the UK works multilaterally to hold the perpetrators of abuses to account by leading and drawing on our historic and defining global partnerships, not least with the United States and the European Union. That has rightly been raised by Members across the House today.

The foreign policy of the next Labour Government will be grounded in securing the rights of people across the world and ensuring that Britain plays a crucial international role in advocating for the rule of law and, particularly when it comes to human rights, working with others and not lagging behind. This matters now more than ever, because we stand at a crossroads: a global trend towards authoritarianism and human rights abuses could prevail if we do not utilise every weapon in our diplomatic and legal arsenals to counter it.

Freedom House articulated this clearly in its most recent “Freedom in the World” report, which concluded:

“The present threat to democracy is the product of 16 consecutive years of decline in global freedom...As of today, some 38 percent of the global population live in Not Free countries, the highest proportion since 1997.”

There are so many examples to list. Colleagues across the House have done an exceptional job of providing a sense of the dangers in the global picture and how our sanctions regime must match them.



Of course, in Ukraine, Russian forces have committed egregious and heinous abuses in the deliberate targeting of civilian areas, the systematic use of rape as a weapon of war, and the use of mines and explosive equipment to murder innocent people returning to their homes. We are now hearing shocking stories about the forced relocation of hundreds of thousands of Ukrainian citizens, including children, into the Russian far east, and the tearing apart of families in a brazen and appalling attempt to undermine and wipe out Ukrainian society.

We have supported the Government’s sanctions regime, which is levelled at Putin’s inner circle, oligarchs and the profiteers of the regime, but I want to put on the record that the unity between the Government and Opposition on this issue is not uniformity. I had some frank discussions with one of the Minister’s predecessors—the right hon. Member for Braintree (James Cleverly), who is now the Secretary of State for Education—when we believed that the broadening of the sanctions regime did not come quickly enough and when there were clear cracks in the system or a lack of resources.

Let me follow up on the issues that I have raised consistently. What is the Government’s latest position on the seizure and repurposing, as opposed to merely the freezing, of the assets of those who have been sanctioned? Indeed, are any considerations being given to the repatriation of revenue to support humanitarian and reconstruction efforts in Ukraine?

I have just returned from an extremely useful trip to the western Balkans. It is clear that the situation in that region is very dangerous and fragile. Indeed, the High Representative for Bosnia and Herzegovina, Christian Schmidt, has warned of the real prospect of a return to violence. Many in the House will recall the scale and severity of the human rights abuses committed in both Bosnia and Kosovo, which I visited in the 1990s. Labour will continue to support the Government in levelling sanctions at those throughout the region, such as Milorad Dodik, for their role in inciting tensions recently.

As has been mentioned, we must hold those in Nigeria to account for the appalling crimes that have been committed—not least the shocking events in 2020, when military forces opened fire at the Lekki toll gate in Lagos. The then Foreign Secretary, the right hon. Member for Esher and Walton (Dominic Raab), called on the Nigerian Government to investigate the reports of brutality at the hands of the security forces, yet to date the Government have failed to impose any sanctions in response, despite their having received, as I understand it, detailed evidence from Redress and Nigerian partners that identifies the perpetrators. We have heard in recent days about the shocking sentences handed out to three gay men in northern Nigeria, who were sentenced to be stoned to death. Surely we must take action against those who perpetrate or threaten such horrific abuses.

After the military coup in Myanmar, the Government took the welcome decision to implement further sanctions against Burmese military organisations—but that took two months, despite egregious crimes being committed against the population in real time. Is it an issue with our existing sanctions regulations, which need to be modified to cope with crises in real time? Or, as I alluded to earlier, are there often simply too few people at the FCDO and the Office of Financial Sanctions Implementation to ensure prompt and consistent responses? I know that the number in the FCDO unit has increased, and I pay tribute to the officials who do such excellent work in this policy area, but we are lagging behind the United States and others in terms of the investment and resources that we put in. The staff numbers at the OFSI are simply not enough. We need to see better co-ordination among the OFSI, the National Crime Agency and other enforcement bodies to ensure a consistent approach.

Let me turn to a fundamental point that a number of Members raised: why is it the case that the UK has sanctioned only 20% of the perpetrators of abuses who have been sanctioned by the United States? I cannot understand how we are so far behind one of our closest allies. According to Redress and the all-party parliamentary group on Magnitsky sanctions, there has been a slowdown in the use of Magnitsky sanctions in recent months. The ramifications are immense.

We have heard about Xinjiang, where the human rights abuses have shocked the world. I pay tribute to those from all parties in the House, many of whom are present, who have been consistent in raising those abuses. However, from the party secretary who has orchestrated the brutal crackdown on the Uyghurs and other religious minorities to the Xinjiang Production and Construction Corps, which runs the mass coercive-labour programmes throughout the region, there have been exemptions that are frankly staggering. Why have the Government held off? What more do they need to see to do the right thing?

[Chris Bryant]

Another problematic issue with the UK lagging behind others is that sometimes people move their assets in case the sanctions come to them as well. We have seen significant cases, one of which I raised with the Foreign Secretary when she appeared before the Foreign Affairs Committee recently: in the case of Sistema, the individual simply gave half his material goods to his son and managed to escape the sanctions. Why are we so slow?

[Stephen Doughty]

I absolutely agree with my hon. Friend’s point, which emphasises the point that I made about acting multilaterally, quickly, urgently and in co-ordination.

We heard a lot from my hon. Friend and others about Hong Kong. The United States have sanctioned at least 11 officials—from Carrie Lam to Chris Tang—for their role in infringing on the rights of the people of Hong Kong. What is the Government’s trepidation about this? We can look at Ali Ghanaatkar in Iran or Mohamed Hamdan Dagalo in Sudan; the former was head of interrogations in Evin prison, while the latter is responsible for gross human rights abuses in Darfur. I have not even got time to mention the many examples that we have heard from across the middle east and the Gulf states. What of Alexander Lebedev—will the Minister clarify? We know that he has been sanctioned by Canada as a former KGB agent and known associate of Putin. Have we sanctioned him, and if not, why not?

We want the Government to make proper and far-reaching use of the Magnitsky regime that we adopted back in 2020, and indeed the country regimes, but that requires ambition, urgency and proper resourcing. The House has made its voice very clear today; there has been complete consistency across the House, as I hope the Minister has heard clearly. The protection and advancement of human rights should be at the heart of any British foreign policy, and I hope that the agreement that the Minister has heard across the House will result in action commensurate with the violations that are unfolding across the world today.

[Mr Deputy Speaker (Mr Nigel Evans)]

I welcome the Minister to his new role—Rehman Chishti.

--- Later in debate ---

[Rehman Chishti]

The hon. Gentleman says that that is not true. I am very happy to have that conversation with him and officials, but my understanding is that for the number of sanctions we have applied in connection with Putin’s illegal and unprovoked invasion of Ukraine, the figures are about 1,000 individuals and 100 entities. In my understanding, that is the largest number of any international partner in the world.

[Stephen Doughty]

I asked the Minister a very specific question. Canada has sanctioned Alexander Lebedev, so will he confirm whether or not the UK has done so?

[Rehman Chishti]

I can ask my officials to look at that specific point and come back to the hon. Gentleman on it.

The UK has designated more individuals than any other G7 member, demonstrating our leadership in this field. We also brought forward emergency legislation so that we could respond even more swiftly and effectively. We now have a significantly expanded sanctions directorate within the FCDO to take forward these measures. I visited it this week, where I was impressed by the incredibly hard work everyone is putting in to deliver our objectives. Let me be clear that these measures are working. Sanctions imposed by the UK and our international partners are having deep and damaging consequences for Putin’s ability to wage war.

My right hon. Friend the Member for Chingford and Woodford Green asked about greater collaboration with the US as we move forward on sanctions designations. I will be in the US next week to speak to counterparts, looking at sanctions and how we can work together even more in the coming months and years on this point. That may not be quite what he wanted me to say, but it shows our commitment to work with our international partners. Having come into office 10 days ago, I will be in the US next week meeting counterparts about this specific, important issue.



Meanwhile, we continue to impose sanctions in support of human rights and democracy elsewhere in the world, using our geographic regimes. That includes measures cutting off arms flows to the military in Myanmar, targeting those supporting the Assad regime in Syria, and bearing down on politicians who undermine the hard-won peace in Bosnia and Herzegovina. In recent years, we have boosted the tools at our disposal through our independent sanctions framework. We launched our global human rights sanctions regime in 2020 and our global anti-corruption sanctions regime the following year.

Our global human rights sanctions regime helps us hold to account those involved in serious human rights violations or abuses—including torture, slavery and forced labour—by imposing targeted asset freezes and travel bans. Since the regime was launched, we have designated 81 individuals and entities. We have used it to stand up for the rights of citizens in countries ranging from Russia to Belarus, Venezuela, Pakistan, The Gambia and North Korea. The hon. Member for North East Fife (Wendy Chamberlain) mentioned Belarus. Only yesterday, the other place approved the Republic of Belarus (Sanctions) (EU Exit) (Amendment) Regulations 2022, which will come back to this House in September, allowing for further debate.

China and Hong Kong have been mentioned by parliamentarians across the House. We have taken robust action to hold China to account for its appalling human rights violations in Xinjiang, including systematic restrictions on religious practice. On that point, I thank the hon. Member for Strangford for the amazing work of the all-party parliamentary group for international freedom of region or belief, which he chairs. As a former special envoy for freedom of religion or belief, and having worked with my US counterpart, Sam Brownback, the US ambassador-at-large for international religious freedom, to set up the International Religious Freedom or Belief Alliance—it had 26 member states at the time—I totally understand what such partnership working and collaboration can do to advance interests that are important to both our great countries.

Last year, we imposed unprecedented joint sanctions against those responsible for enforcing China’s oppressive policies in Xinjiang. We took that action alongside 29 other countries, demonstrating the strength of international resolve. We have also led international efforts to hold China to account at the United Nations, taken measures to tackle forced labour in supply chains, funded research to expose China’s actions, and consistently raised our concerns at the highest level.

On Hong Kong, we continue to challenge China for breaching its legally binding commitments under the joint declaration. We have called out its conduct on the world stage. Together with our G7 partners, we have condemned the steady erosion of political and civil rights. We have also opened our doors to the people of Hong Kong through a new immigration path for British nationals overseas, with over 120,000 applications. Moreover, we have suspended the UK-Hong Kong extradition treaty indefinitely, and extended to Hong Kong the arms embargo applied to mainland China since 1989, as updated in 1998.

Although it would not be appropriate for me to speculate about future possible designations, we remain committed to working with partners to hold China to account, and not only China. We remain committed to working with international partners, whether our friends in Canada, our friends in Australia, who apply a similar system of sanctions, or the EU. We will work together, hand in hand, to ensure that everything that can be done is being done to hold those perpetrators to account for serious human rights violations. That is a top priority for this Government.

Our global anti-corruption sanctions regime targets those involved in bribery and misappropriation, stopping them freely entering the United Kingdom and using it as a safe haven for dirty money. The hon. Members for Hammersmith (Andy Slaughter) and for Argyll and Bute (Brendan O'Hara) talked about how we can address the issue of dirty money coming into the United Kingdom. That is also a key priority for the Government. In just over a year, we have designated 27 people, including Ajay, Atul and Rajesh Gupta and their associate Salim Essa, who were at the heart of long-running corruption that caused significant damage to South Africa’s economy.

I conclude by reflecting on the words of Winston Churchill:

“It is wonderful what great strides can be made when there is a resolute purpose behind them.”—[Official Report, 7 May 1947; Vol. 437, c. 455.]

The United Kingdom Government have demonstrated our vision and purpose by taking significant steps on this issue. Of course we can do more, and we will do more. The Government will work with parliamentarians to do all we can to ensure that serious human rights violators are brought to account.

Again, I thank the hon. Member for Rhondda and my right hon. Friend the Member for Chingford and Woodford Green for all they have done. I look forward to working with them when Parliament returns in September. I go to the United States next week, so this timely debate enables me to say to my US counterparts how important this issue is not just for Congress but for Parliament.