The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
I beg to move,
That this House has considered Exiting the European Union and Sanctions.
May I congratulate those who have just given their maiden speeches?
The United Kingdom has long been one of the most networked and outward-looking countries in the world. The Prime Minister has set out her vision for the country, following our exit from the European Union: a truly global Britain—a country that goes out into the world to build relationships with old friends and new allies alike. We hold fast to a vision of a UK that is respected abroad, tolerant at home, engaged in the world, and working with international partners to advance the prosperity and security of our nation.
That said, we live in a fast-changing and uncertain world. The United Kingdom faces a number of threats from states that act in contravention of international law, from individuals who peddle messages of hate or commit acts of terror, and from companies that corrupt basic standards of behaviour, and this country needs as many tools as are available to counter these threats and to influence the behaviour of others.
Effective, targeted sanctions policy is one of those tools. Sanctions have helped resolve complex and serious policy issues—for example, by bringing Iran to the negotiating table to agree to robust constraints on its nuclear programme. The UK currently implements 34 sanctions regimes, around half of which result from legally binding resolutions of the UN Security Council, and half from additional measures agreed with partners in the European Union. We must retain the ability to impose, update and lift sanctions regimes, both to comply with our international obligations and to pursue our wider foreign policy and national security objectives after we exit the European Union.
The referendum result last year was a clear message from the people of the United Kingdom that we need to change our relationship with the European Union and take back control of our laws, and this Government are delivering on that instruction through the ongoing negotiations, the second round of which is under way this week, and through the introduction of essential legislation, such as the European Union (Withdrawal) Bill, which the Government published last week.
Peter Grant (Glenrothes) (SNP)
This mantra of taking back control of our own laws has been very prominent in the Brexit debate. Could the Minister give an example of an EU sanction that the United Kingdom would not want to apply, or of a sanction that it would want to apply, but that the European Union does not currently apply, just to give us some idea of how much control we need to take back in this area?
Mr Walker
I will respond to the hon. Gentleman perhaps later in my speech. This is more about powers than policy. The UK wants to pursue a consistent policy as we go forward, but to do so, we will need powers as we exit the European Union.
The UK’s implementation of UN sanctions and European Union multilateral sanctions relies on the European Communities Act 1972. The UK has some limited domestic powers to impose sanctions—notably in domestic counter-terrorism—but these are not sufficient to replicate the full range of sanctions in force through the European Union. While the European Union (Withdrawal) Bill will preserve or freeze existing sanctions, it would not provide the powers necessary to create new regimes, as we may need to in future, or to update, amend or lift sanctions, as we have done in the past when there are changes in circumstances in the fast-moving world of foreign policy.
When the United Kingdom exits the European Union in March 2019, we will therefore need to have new legislation in place. As set out in Her Majesty’s Gracious Speech, the international sanctions Bill will be introduced this Session. The Bill will focus on powers, not policy, establishing the legal framework that we need to continue implementing UN sanctions, and to return decision-making powers on non-UN sanctions to the UK, while preserving flexibility, for now, on how we use those powers in relation to specific countries or threats.
Wes Streeting (Ilford North) (Lab)
Does not the Minister accept that what he has outlined of this process really does underline the stupidity of some of the arguments around sovereignty? He says that we can now impose our own sanctions regime, but we are less powerful and less influential acting alone than we would be acting through the European Union.
Mr Walker
I do not agree. The referendum clearly took the key decision that we would be leaving the European Union, but that does not prohibit us from working with allies in the European Union, or indeed elsewhere. The UK will continue to be a powerful, positive influence in the world, and we can work with allies on a number of planes.
Returning to the Bill, on 21 April the Government—the Foreign Office, the Treasury, and the Department for International Trade—launched a nine-week consultation, which closed on 23 June, on the United Kingdom’s future legal framework for imposing sanctions. The consultation document was published online and sent to over 30,000 individuals and companies. Government officials also held roundtables to consult key sectors, including financial services, the legal profession, industry professionals and representative bodies, as well as international partners. The views of those who participated in the consultation have been carefully analysed by officials, and the Government response will be published shortly.
We intend to preserve important elements of our current approach to sanctions, using them in a targeted fashion to maximise the intended pressure while minimising unintended consequences. In line with the Human Rights Act 1998, we will designate people only when this is justified by evidence, and we will provide a framework for sanctioned persons to challenge their designations in a court. We will improve current practice where we can, using the greater flexibility we will have in future to provide guidance to UK businesses affected by sanctions and to grant licences to prevent sanctions from disrupting humanitarian operations. The Bill will ensure that the United Kingdom is ready, on exit day, to continue to play a leading role as a global foreign and security policy actor. It will allow us both to meet our international obligations and to support our own foreign policy and national security.
It is clear that sanctions are most effective when agreed multilaterally with our allies and partners around the world. The more countries acting in concert, the greater the impact of sanctions and the less scope there is for evasion or retaliatory measures. UN sanctions are therefore the gold standard, as they bind the entire international community. However, as we see in relation to Russia and Syria, we also need to be able to work with the EU, the US and Canada, and other allies to impose sanctions outside the UN framework.
We cannot say with complete certainty at this stage what the precise form of our future co-operation with the EU will be, and what that will look like after the UK’s exit. That will depend on the wider negotiations on our future relationship in the field of foreign and security policy. However, as the Prime Minister and others have said, there is a clear mutual interest in a deep and special partnership. We remain committed to European security and to working with our EU allies to counter global threats that we all face. Sanctions are an important means to that end, and the international sanctions Bill will ensure that we retain the necessary powers.
I welcome today’s debate as an important opportunity for Members across the House to feed into the vision for a global Britain, and to discuss how our sanctions regime will operate after we leave the European Union.
Helen Goodman (Bishop Auckland) (Lab)
Sanctions are obviously an extremely important policy lever. People often think of sanctions as a modern policy instrument, but Thucydides mentions them as one of the instruments used against Megara in 432. Unfortunately, on that occasion they did not succeed in averting the Peloponnesian war. Sanctions are crucial nowadays, and it is vital that Ministers have the legal powers to implement sanctions policy in line with foreign policy objectives and responsibilities.
As the Minister has just said, the Government produced a consultation document on 21 April, and the deadline for people to respond was 23 June. The plan was originally that we would have a Bill before the summer recess, and I ask the Minister who will respond at the end of the debate: where is the Bill, and why have we not got it?
The Minister for Europe and the Americas (Sir Alan Duncan)
I may be able to help the hon. Lady. There was something called a general election that came along, and these things cannot be announced during purdah, so to have a proper response to the consultation, it is appropriate that we should prepare it during the coming few weeks and months. It would have been improper to have done so earlier.
Helen Goodman
I am not of course suggesting that the Bill should have been produced in the middle of the general election campaign, but it is quite clear that consultation responses were coming in during that period. As the Under-Secretary of State for Exiting the European Union said, officials have been looking at the responses. This is another example of the chaos and confusion that is evident on the part of the Government in the whole Brexit process. We had another example of that on Monday, when, without any explanation, Ministers withdrew the motion on a unified patent court. Across the board, policy is not being processed sensibly. These are not pieces on a chess board, but important areas of policy responsibility.
The consultation paper said that the legal powers we need to maintain sanctions will be put in the Bill, but it will not look at the policy goals or at how we will align future UK sanctions with those imposed by the European Union. I can understand the first part, but I really want to learn from Ministers whether the second part can be true. For sanctions to be effective, they must obviously be co-ordinated with our partners. Surely the way we make decisions to initiate and review sanctions must be explicitly linked with the processes of our partners in the UN and the European Union.
Hitherto in the EU, sanctions have often related to upholding values set out in the common foreign and security policy, including human rights, democracy, good governance and the rule of law. These should continue to be the cornerstones of our policy post-Brexit. I would be grateful to the Minister for Europe and the Americas if he confirmed that. The European Council has hitherto adopted decisions, together with any necessary regulations, and set out the elements of each individual sanctions regime. A number of UK Departments—principally, the Home Office, the Treasury and the Department for International Trade—have then taken on the responsibility for implementation. Will Ministers explain which Department will take the lead in co-ordinating other Departments on future sanctions?
In 1998, the Labour Government carried out a wide-ranging review of UK sanctions policy. When reporting to Parliament on the outcome of that review, the then Government outlined the core principles of sanctions policy: sanctions should be targeted to hit the regime, rather than ordinary people; they should include exemptions to minimise the humanitarian impact on innocent civilians; they should have clear objectives, including well defined and realistic demands against which compliance can be judged, with a clear exit strategy; there should be effective arrangements for implementation and enforcement by all states, especially neighbouring countries; and sanctions should avoid unnecessary adverse impacts on UK economic and commercial interests. We believe that these principles remain appropriate, and I would like an assurance from Ministers that they take the same view.
In the consultation paper, the Government state:
“Primary legislation will create a framework containing powers to impose sanctions regimes, the details of which will be laid out in the secondary legislation”.
That is somewhat vague. We seem to be being presented with a number of Henry VIII powers. We would be grateful if Ministers could tell us what the supervision and accountability arrangements with Parliament will be.
Assuming that the Bill creates a broad framework, and given the importance of ensuring that individual sanctions regimes are carefully calibrated, we believe that there is a good case for saying that all secondary legislation imposing UK sanctions should be subject to the affirmative procedure. In other words, new sanctions or changes to sanctions should require a debate on the Floor of the House, rather than in Committee upstairs. That is the only mechanism that would provide the requisite parliamentary scrutiny and the opportunity for us to hold the Government to account.
We would also like to know what level of oversight will be built into the process of reviewing sanctions. The consultation paper says only that both
“UN and EU sanctions are subject to internal reviews…We propose a similar approach under our new legislation…Internal reviews by the Government could include periodic reviews of individual designations or of entire regimes.”
Obviously, sanctions regimes need to adapt to changing circumstances, so ongoing parliamentary scrutiny and independent oversight will always be necessary. We want Ministers to provide clarity on that, so that procedures for accountability and independent oversight are built into any new legislation. We would like the Government to publish an annual report on the implementation of the sanctions regime, and to give Parliament a role in periodic reviews of UK sanctions—for instance, by making the Government’s annual report the subject of debates in both Houses—as well as a role in re-authorising ongoing sanctions on a yearly basis.
It is really difficult for a meaningful debate on this issue to take place until we have more clarity on the extent to which future UK-EU co-operation can take place, as my hon. Friend the Member for Ilford North (Wes Streeting) has said. That is particularly true of decisions as to whether sanctions should be imposed in the first place. The case of Ukraine is a good example of why it will remain important for us to work with the EU in future. It serves as perhaps the most prominent recent reminder of how collectively imposed sanctions can still have a real impact outside the UN. Everybody knows that the UK played a key role in making the intellectual case for those sanctions, and that the UK undertook significant diplomatic efforts in the EU and at the G7. How will the Government ensure not just that UK-EU co-operation on sanctions continues after we leave the EU, but that we will maintain our ability to shape decisions on when the EU sanctions are imposed? [Interruption.] “We won’t,” mumbles the Minister. We will hear whether, instead of mumbling on the Front Bench, he can answer those questions at the end of the debate.
Sir Alan Duncan
I hope that the hon. Lady will allow me to not mumble from the Dispatch Box. I was trying to alert her to the fact that most of those sanctions are imposed by the UN, to whose authority we are subject as a member.
Helen Goodman
As a matter of fact, the right hon. Gentleman’s colleague, the Under-Secretary of State for Exiting the European Union, just said—I think this is right—that about half the sanctions in which we are involved are not subject to UN resolutions, but have come separately from the European Union. Given that the debate is about exiting the European Union and sanctions, it is reasonable to focus on the European angle.
The Government have set up their consultation and scheduled this debate, but they are not able to explain how in practice we will co-operate with our allies in the EU on issues such as intelligence sharing, policing and judicial matters, and all the things that are needed to enforce compliance with sanctions regimes in an effective way. The lack of any plan is another example of the Government’s recklessness in threatening to use security co-operation as a bargaining chip in the Brexit negotiations.The role of the financial sector is likely to be key in implementing any effective UK sanctions regime, particularly in terms of tackling money laundering and terrorist funding. The size of the City of London means that our role is vital. We have a record of leading in this area, although concerns remain about money laundering and sanctions evasion.
A critical question concerns the extent to which any new sanctions regime will be applied to the UK’s overseas territories. Following the revelations of the Panama papers, it is clear that all the UK’s overseas territories could play a part in tracking down and clamping down on illicit finance. That applies especially to the Cayman Islands and British Virgin Islands, which have faced heavy criticism in the past, but also to territories such as Bermuda that are responsible for their own legislation in this area.
What is the Government’s assessment of whether sanctions are being adequately implemented and enforced in all UK overseas territories and Crown dependencies? Will the Channel Islands and Bermuda be responsible for their own legislation in this area under a new regime? What steps will the Government take to monitor implementation and enforcement in the overseas territories? Will they commit to reporting regularly to Parliament on this matter?
The question of sanctions is important and significant. It is a shame that we have not had more clarity from the Government today in the form of legislation, but I hope that when the Minister winds up the debate, he will be able to answer some of our questions.
The Minister for Europe and the Americas (Sir Alan Duncan)
I welcome you to the Chair, Madam Deputy Speaker. May I start by saluting two exemplary maiden speeches that we have heard today? My hon. Friend the Member for Saffron Walden (Mrs Badenoch) made her maiden speech with great confidence, saying it was the constituency’s first since 1929; I take it that was because Sir Alan Haselhurst had previously sat for Middleton and Prestwich. Of course I am slightly saddened that the population of Sir Alans in this House has reduced by one, but her speech was utterly charming and beautifully judged, and I can see, as can all of us, why those in Saffron Walden have so rabidly taken her to their hearts. I said “rabidly” by mistake; of course I meant rapidly. It may well be that her locally produced saffron aphrodisiac will soon be on sale in the parliamentary shop, and I would urge hon. Members to form a most orderly queue. Her good sense on economics is a message all in this House should heed. I congratulate her on the most perfect maiden speech.
I offer similar congratulations to my hon. Friend the Member for Northampton South (Andrew Lewer), whom I have known as the most diligent MEP for the East Midlands. He remains local to the East Midlands now that he is a Northamptonshire MP. He has a passion for high-quality Northamptonshire shoes; may I assure him that I endeavour to be a loyal customer? None of that Italian stuff for me. We will also try to raise a glass, when we can, charged with either Carlsberg or Phipps. He can forever be proud of the maiden speech he made tonight.
As my hon. Friend the Parliamentary Under-Secretary of State for Exiting the European Union said in his opening speech, the Government intend to continue working closely with allies to counter threats such as terrorism, conflict and the proliferation of nuclear weapons. An effective and targeted sanctions policy is a very important means to that end, and a global Britain will continue to use sanctions to influence the behaviour of others as part of a broad and internationally co-ordinated approach.
We currently implement over 30 sanctions regimes, targeting specific countries as well as terrorist groups. Most of these sanctions result from resolutions of the UN Security Council or decisions by the European Union. Typically, they involve travel bans, asset freezes, and financial and trade restrictions. UN and EU sanctions are currently brought into effect in the UK through the European Communities Act 1972. The House has heard about the principles we apply when imposing sanctions. There must be clear objectives linked to wider political strategy; solid justification; and careful targeting to maximise the intended pressure while minimising the unintended consequences. I want to reassure hon. Members that the Government remain committed to these principles.
Today’s debate is about the principle of whether, once we have left the EU, the UK should establish a sanctions regime that allows us to replicate the sanctions powers currently deriving from our membership of the EU.
Dr David Drew (Stroud) (Lab/Co-op)
Will the Minister give a commitment that the 34 sanctions currently implemented will be exactly the same after Brexit?
Sir Alan Duncan
There are over 30, and the intention is to lift and shift, but all will be subject to statutory instruments of this House. This House might, if it were to use its numbers, reject them, but the intention is to remain aligned with the EU—with existing sanctions—so that we are in harmony with it.
Jenny Chapman
The Minister said that these measures would be subject to votes in this House. Am I to read into that that he intends them to be subject to the affirmative procedure?
Sir Alan Duncan
I will come to that in just a moment, if I may.
A sanctions Bill will enable the UK to continue to impose, update and lift sanctions in response to fast-moving events. The European Union (Withdrawal) Bill will not be sufficient to do that, since we need powers to do more than simply preserve or freeze existing sanctions. The United Nations Act 1946 is also insufficient for UN sanctions, because in 2010, the UK Supreme Court ruled that it could not lawfully be used to implement asset freezes, and that additional powers were needed for measures of this kind involving any infringement of individual rights. In short, the sanctions Bill will enable the UK’s continued compliance with international law after we leave the EU, ensure that, as a permanent member of the UN Security Council, the UK continues to play a central role in shaping UN sanctions, and return decision-making powers on non-UN sanctions to the UK.
As my hon. Friend the Under-Secretary said, the Bill will focus on powers, not policy. As such, it might be described as a framework Bill. It will provide powers to implement UN sanctions and to impose UK sanctions independently or in co-operation with allies. The question of how we use those powers will be addressed later, when we introduce secondary legislation applying sanctions to particular countries. We are obliged to implement UN sanctions, but we will face political choices on how far to replicate current EU sanctions.
The Bill will take account of the consultation mentioned by my hon. Friend in his opening speech. We envisage four main elements: powers to impose sanctions where justified and appropriate; powers to ensure that individuals and organisations can challenge the sanctions imposed on them; powers to exempt or license certain types of activity that would otherwise be restricted, such as humanitarian deliveries and supplies, in countries that might have been sanctioned; and powers to amend and adopt regulations for anti-money laundering and counter-terrorist financing.
Detailed scrutiny of the Bill can obviously come only once it is published. That is why we will have Second Reading, Committee, Report and so on, as this House always does. However, perhaps I can respond as rapidly as I can in the time I have—and I am running out of time—to some of the questions that have been asked, mainly by Opposition Front Benchers. “Where is the Bill?” was one question. We have a consultation. We have just had an election and purdah, and we need to consider the responses and then decide our final position. Only then can we publish the Bill—but we will do so. The hon. Member for Bishop Auckland (Helen Goodman) asked who will lead on it. The Foreign and Commonwealth Office will take the lead on foreign policy, including sanctions.
On the question by the hon. Member for Darlington (Jenny Chapman) about whether the procedures we intend to adopt will be affirmative or negative, we note—this is very important for the efficacy of sanctions—that the delay involved with affirmative procedures can lead to asset flight before assets are frozen or caught. We are considering this issue, and will respond in our consultation response, which will be published very shortly.
Sir Alan Duncan
I have no time; I am very sorry.
The hon. Member for Bishop Auckland asked about the overseas territories. The UK has responsibility for the external relations and national security of overseas territories and Crown dependencies, and we will continue our policy of ensuring that the overseas territories and Crown dependencies apply international and UK imposed sanctions. My hon. Friend the Under-Secretary is chairing regular meetings with the overseas territories and Crown dependencies on how best to achieve this end. We will include a power in the Bill for the UK to continue to legislate directly where appropriate.
It was suggested that we would lose the ability to be part of international sanctions development. I would say very clearly that I believe that we will not lose this ability. The Bill is intended to give us all the necessary powers to work internationally. We note that the UK, with its international allies, was a key player in securing the Iran nuclear deal. We will continue our constructive and productive relationship with our European and international partners after we leave the EU.
The hon. Member for Glenrothes (Peter Grant) asked about the legal risk of the UK adopting EU sanctions—in other words, our having a separate regime and doing this individually. The UK will take responsibility for the sanctions it adopts, including taking on legal risks. When working with the EU, we will take all necessary steps, co-ordinating sanctions and sharing information, to reduce the risk, and if the risk is not acceptable, we do not have to follow the EU.
There are some other issues that we have not had the chance to discuss, but I am sure we will do so on Second Reading and in further consideration of the Bill. On civil liberties, for example, there is a very delicate balance to be struck between using sanctions to counter threats such as terrorism and respecting due process to protect the rights of individuals.
Another issue is abuses and violations of human rights as a reason to impose sanctions. The Government are firmly committed to promoting and strengthening universal human rights, and holding to account states responsible for the worst violations. Indeed, during the previous Parliament the Government amended the Criminal Finances Act 2017 to allow law enforcement agencies to use civil recovery powers to recover the proceeds of human rights abuses or violations, wherever they take place, where the property is held in the UK. We also have powers to exclude from the UK individuals whose presence is not conducive to the public good, and we operate a watch list system to support this.
We know that innocent individuals and organisations can sometimes be inadvertently affected by sanctions. We hear reports of this, for example, from humanitarian organisations delivering assistance in countries subject to sanctions. We will do everything we can to minimise these unintended consequences. We will publish guidance to make UK sanctions regimes as clear as possible to the individuals and companies affected. We will have more flexibility to issue general licences to humanitarian organisations in order to cut bureaucracy and make it much easier for them to continue operating in the most difficult of circumstances.
The Bill will be published in due course, and the response to the consultation will come out soon. I urge the House to appreciate that as we look across the world and see the dangers of terrorism and misconduct of all sorts, having an effective sanctions regime is absolutely crucial to our foreign policy and to making the world a better place. Replicating a sanctions policy once we have left the EU is absolutely essential. If we did not do that, the world would be a poorer place.
Question put and agreed to.
Resolved,
That this House has considered Exiting the European Union and Sanctions.