Brexit: Sanctions Policy (European Union Committee Report)
(6 years, 6 months ago)
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Baroness Verma
That this House takes note of the Report from the European Union Committee, Brexit: sanctions policy (8th Report, HL Paper 50).
Baroness Verma (Con)
My Lords, I am grateful for the opportunity to debate the report Brexit: Sanctions Policy this afternoon—actually, it is still morning. In the run-up to the referendum on the UK’s membership of the EU, foreign policy issues were rarely discussed, but working in partnership with our European neighbours on foreign and security policy is of vital importance to the UK’s national interest. Sanctions—the subject of today’s debate—are a central tool of national security. The development of a new framework for engagement and co-ordination with the EU, and other international allies, on sanctions is an important and timely topic for consideration by this House. As the chair of the EU External Affairs Sub-Committee, I first extend my thanks to the members of the committee for their important contribution to this report. I also thank the secretariat to the committee, Eva George, Julia Ewert and Lauren Harvey, for their assistance with the inquiry and preparation of this report.
When we leave the EU, we will also leave its framework for designing and imposing sanctions, such as arms embargoes, asset freezes, visa and travel bans and other sectoral restrictions. EU sanctions regimes currently account for the majority—around three-quarters—of all the sanctions regimes that the UK implements. These measures are agreed unanimously by all 28 EU member states and applied across the bloc. Unilateral sanctions have only a limited effect. The impact of sanctions is increased considerably when implemented together with other like-minded nations. Multilateral sanctions both strengthen the signal delivered to a target state or entity and deliver the maximum possible economic impact. The events of recent weeks, from the provocations of Russia to the worsening situation in Syria, underline the vital importance of working in partnership with our international allies.
Our inquiry considered sanctions policy—the process of designing measures to achieve the UK’s foreign policy and national security goals. We did not consider in detail the new UK legal regime, as proposed in the Sanctions and Anti-Money Laundering Bill, being considered in the other place. We found that being part of the collective EU sanctions regime has helped the UK to achieve its foreign policy and national security goals. There have been some important examples in recent years. For example, EU sanctions on Iran played an important role in bringing that country to the negotiating table over its nuclear programme, and EU sanctions on Russia continue to demonstrate that the EU remains united in its condemnation of the annexation of Crimea and destabilisation of Ukraine. The UK has been hugely influential in the design of EU sanctions policy. It has benefited from being embedded within a formal structure for sanctions policy co-operation with the 27 other EU member states. The UK has enjoyed frequent informal interactions in the margins of those meetings.
We concluded that, although we will be leaving the EU, the common interests and threats facing the UK and the 27 other member states will not change fundamentally. We will therefore need to find ways to co-ordinate our sanctions policy with the EU as well as with other like-minded partners. One option would be to align with EU sanctions, an approach often taken by Norway or Switzerland. While that would preserve a united approach to sanctions between the EU and the UK, we would not have influence over the design of those sanctions or have any voting rights. We would simply be implementing EU restrictive measures.
A second option would be to seek to influence and engage with the EU sanctions regime from the outside—the approach taken by the US. We found that informal engagement with the EU on sanctions policy could of course be very valuable, but believe it would be no substitute for the formal influence and decision-shaping role that the UK currently enjoys as an EU member state. We proposed that, if the UK does not seek or is not able to secure participation in the common foreign and security policy after Brexit, the Government should propose a UK-EU political forum for regular discussion and the co-ordination of sanctions policy.
I am pleased that during the course of the inquiry, and in their response to the report, the Government acknowledged the value of international co-operation to the effective use of sanctions. However, their response did not specifically engage with the option of the UK aligning with sanctions regimes agreed by the 27 EU member states after Brexit. I invite the Minister to comment specifically on whether the UK is considering this option after we leave the EU and to give the Government’s assessment of it. If not, what do they see as a preferred option?
In evidence to the committee, the Government told us that they were confident that the UK would remain influential within EU 27 sanctions discussions. They stated their ambition of an unprecedented level of co-operation on sanctions policy with the EU after Brexit,
“beyond any arrangement the EU has now with other third countries”.
What would that arrangement look like, and what resources would be allocated to support it?
My noble friend will be aware of the concern expressed in our report that the Government could provide no detail on what such a “tailored arrangement” proposed for co-operation would involve. We are concerned that the goal of an unprecedented level of co-operation was an untested approach. Have talks on these issues begun and, if so, when will the Government provide evidence of such progress? In the Government’s formal response to the committee, there was no further indication of how this new partnership might be structured. We were left no clearer on the detail of the Government’s desired framework, nor on the proposals that they will be making to the EU as part of the negotiations.
I invite the Minister to explain in detail the Government’s aspirations for sanctions policy co-operation after Brexit, specifically including how a model of UK-EU sanctions co-operation based on two-way exchanges of analysis and information, as mentioned in their response to the committee, would operate in practice. I also invite him to comment specifically on the committee’s proposal that a UK-EU political forum for regular discussion and co-ordination of sanctions policy be established.
Finally, and more broadly, considering Article 122 of the draft agreement on the withdrawal of the UK from the EU, I invite the Minister to inform the House when he expects negotiations on the future of the UK-EU relationship in the area of common foreign and security policy to commence. Furthermore, I ask him to specify whether the Government will conclude an agreement on co-operation in this area that will apply during the transition period.
Sanctions policy is an important subset of our broader foreign policy. The UK’s influence on its international partners’ sanctions policy will depend on how far it is able to retain its authority and leadership on key foreign policy dossiers after Brexit. It is critical that the Government engage proactively and constructively with our EU partners in the forthcoming negotiations on foreign policy co-operation, recognising that the interests and threats we in the UK face are common to Europe as a whole and are best tackled together. All the evidence that provided the body of our report demonstrated the real and strong influence we carry as a collective body. Therefore, it is in our interest as a nation not to lose that voice. I beg to move.
Lord Horam (Con)
My Lords, the Minister will now be aware from the long list of questions that my noble friend Lady Verma listed that she did a sterling job as chair of the committee, of which I was a member. As she did, I first thank the clerks and advisers to the committee. We are sadly losing Eva George, who was the clerk to the committee. She is going to the International Affairs Committee. She was a model of clerkly conduct—I hope that is noted at the clerk level.
One of the knacks of the committee, for which I am grateful to my colleagues, is its habit of coming out with extremely timely reports. This knack was also evident when the chairman was my noble friend Lord Tugendhat, who I am glad to see in his place. We did a report on Operation Sophia, which addressed the problem of refugees coming across the Mediterranean when it was at its very height, which received quite a lot of publicity. Very early in the discussions about Brexit, we issued two reports on the options for trade which were very well received, and we are at the moment on a third leg of that, looking at customs arrangements—discussed yesterday in the Cabinet, as Members will be aware. In particular, we took evidence from the Freight Transport Association on the issue of a customs partnership, which is one option that the Cabinet discussed yesterday. The House will be interested to know the evidence that we had from James Hookham, the deputy chief executive of the Freight Transport Association. I quote from the press interview he gave, for the sake of clarity, where he said that the customs partnership was “sound”, showed “positive forward thinking” and was a good outcome for everyone concerned. That is rather different from the view taken by one of my colleagues along the Corridor who said that it was “cretinous”. That was the view of exactly the same thing as people operating these things on the ground think of as “sound”. The adjective cretinous can be rather applied to those who wish to apply customs barriers where there are none today. However, that is another debate for another time. Let me come on to the subject of this report, which is, of course, sanctions.
As my noble friend Lady Verma said, we made three significant suggestions. The first was that sanctions should clearly be a subset of foreign policy. There should be an overall strategic view that sanctions fit into successfully. They must also be co-ordinated properly. As one of the Russians in London said the other day, “If they push us out of London, we’ll just go to Paris”. If it is not co-ordinated, that is the sort of thing that could well happen.
It was made clear to us by the noble Baroness, Lady Ashton, who has had a distinguished career in the European Union, that post Brexit we will not be at the table. We therefore proposed that we should form some kind of political forum in which we could have influence. That positive suggestion was raised again in her remarks by my noble friend. I hope the Minister will respond to that very clearly.
The fact is that we will continue to have influence in the European Union, whatever the arrangements, because we are a significant financial centre and sanctions are at their most effective when they are applied to the individual and make it difficult for them to conduct their normal business, whatever it may be. We should also remember in that context that the British economy is, above all, a services economy. Some 78% of our GDP is in services of one kind or another and that will have influence in this area.
Finally, I will comment on the three areas where sanctions at the moment are having an influence. First, on Russia, the move by the United States on sanctions last month was quite a game-changer because the sanctions relate not merely to human rights but to corruption and how money was originally obtained. Anyone who has read the book by Bill Browder, the American entrepreneur who worked extensively in Russia, will be aware of the problems that led to the Magnitsky Act in the United States, which has had considerable bearing on the behaviour of Russian oligarchs of that kind. In this country, anyone who saw the television series “McMafia” and read the book by Misha Glenny will know the effect in London. The Government have to decide how far we will follow up the game-changing sanctions put on by the United States. It is certainly the case that while Ukraine and Crimea are issues between us and Russia, we cannot in any way afford to relax sanctions, they must remain in place. I do not think there can be any going back on that. It is a matter of international concern.
In addition, we should try to understand Russia perhaps more comprehensively and fundamentally than we have in the past. Russia is coming out of a period when it has felt itself to be a great world power. It had an empire—the Soviet Union—around it. We, as a country which has also come out of a period of empire, should have some sympathy for the psychological effect of that diminution of influence in the world. I always remember reading Jan Morris’s great trilogy of the British Empire, which finished with Farewell the Trumpets. There is a sense in which a country feels diminished and therefore has to exert its power and sense of power in the world, and we should understand the psychology of that, as I said.
Therefore, we should be careful what we do in relation to sanctions, as well as about the implications for the City of London of the amount of Russian money there. But I think that we are now pursuing the right attitude, and I am very pleased with what happened at the other end of Parliament this week on a question of transparency in relation to overseas territories. I think that we all welcomed that, because the fundamental issue here is transparency—and we need more transparency, not only for the overseas territories but in the London financial and property markets. It is outrageous that we simply do not know who owns properties in the middle of London, when they are pushing up prices and having a really damaging effect on the lives of ordinary Londoners and ordinary citizens of this country. We should know who owns those properties; we do not know at the moment. It is one area in which the Government can do things unilaterally without too much co-ordination but with a beneficial effect. That is a step that the Government should take.
Secondly, on Iran, sanctions have clearly had an effect and been very successful in winding down its nuclear ambitions. It seems to me that, far from wanting to do as President Trump wants to do and scrapping the arrangements that we have, what is happening reinforces the importance of those arrangements. If Iran feels that the international community and the Americans in particular have turned against it, it will become a more dangerous operator in the Middle East, not less dangerous. In that respect, the Europeans should keep their act together and not go along the path that President Trump appears to be walking down.
On North Korea, we do not really know what is agitating the North Korean leader or what has brought him to the negotiating table. It may well be more Chinese actions and sanctions than anything that President Trump has done—we will have to wait and see. But it is clearly ongoing and is of significance to all of us.
Finally, on Brexit as a whole and the UK influence in the sanctions area after Brexit, the Minister, Alan Duncan, in the Government’s response to our report, put it well when he said:
“The UK is a Permanent Member of the UN Security Council and an active member of other international fora. We have a substantial global reach, with a diplomatic network of 270 posts, world-class security services and extensive military capabilities. The UK is the only major country to meet both the 2% defence spending target and the UN 0.7% target for Official Development Assistance”.
I would add to that that we are also a significant financial centre and will continue to be. All of that is soft power, and hard power, of a significant kind, and I believe that we can wield it well post Brexit, just as much as we have pre-Brexit, provided that we have a strategic view, co-operate in the way that the committee concluded and can put the right amount of resources into our foreign policy and military and defence capability.
Lord Anderson of Swansea (Lab)
My Lords, I join in congratulating the noble Baroness and her committee and welcome what is a highly timely report—timely not only in the sense that the EU Committee is carrying out a whole series of reports via its sub-committees on the implications of leaving the European Union, but also with respect to our policy on Russia. We go back to the death by a Russian agent of Litvinenko and that agent now being in the Duma in Russia. We think of the invasion of Georgia in 2008, and the fact that Russia and its minions still occupy South Ossetia and Abkhazia. We think of other actions, such as the recent tragedy in Salisbury, and of course Ukraine, including Crimea. The only problem about Crimea is that it is claimed as a maxim of diplomacy that we follow the road sign that says, “Do not enter box unless your exit is clear”. If we make sanctions on Russia wholly contingent on Russia’s leaving the Crimea, that, alas, will never happen, and there is therefore no obvious exit in terms of sanctions if we follow that route. Russia seems to be permanently in the Crimea, and there comes a point, after Salisbury and the chemical bombing by its ally Assad, when Russia must learn the lesson of behaving properly in international affairs and must also learn that there is conduct that will not be accepted and for which it will have to pay a price.
Sanctions, as was said in the committee report, are a most useful soft power tool, short of war. Some dismiss sanctions as gesture politics and, of course, they are not always effective and do not always hit the right targets. Iran and North Korea have been mentioned. I was fairly involved in the 1980s as the opposition spokesman on Africa, with the history of the anti-apartheid struggle. There is no doubt that, at that time, the sports boycott had a significant effect on public opinion on South Africa, and private sanctions by the financial community—illustrated by the effect of the 1986 failure of Chase Manhattan to roll over loans—had a major effect on the South African economy.
I note that, in response to the noble Baroness, Lady Deech, on her Written Question of 13 March, the noble Lord, Lord Ahmad, replied that sanctions are indeed biting in Russia. I remind him of his reply: of the 3.7% decline in Russian GDP in 2015, Citibank estimates that 0.4% was due to the sanctions. Perhaps more importantly, it has made it more difficult for Russia to access western finance. As the noble Lord, Lord Horam, has just said, the role of the City of London is particularly important in this context. However desirable sanctions may be through the United Nations, the experience of the Russian veto in the UN Security Council on sanctions for Syria illustrates the limitations of that route. For us, by far the most useful institution is the European Union, where over 50% of the sanctions we impose are autonomous and where we in the UK have played a leading role. There is no doubt that the clout of a unified European Union response is powerful, both as a sword in bringing pressure on such countries and as a shield to protect EU member states against counter sanctions, if we were to carry out those sanctions on our own.
The possible isolation of the United Kingdom in this field would be neither attractive nor effective, so our aim must surely be to retain as much influence on EU policy as possible, even when we are outside the formal structures. The committee has looked at a whole variety of possibilities, the disadvantage being of course, on the evidence from Norway and Switzerland—in paragraphs 80 and 81 of the report—that, however closely we align ourselves and however inventive we are in respect of EU sanctions, we will be outside the club and thus following decisions over which we have no or very limited influence.
My first observation, therefore, is that any alternative to our current membership cannot be an improvement for us. I have seen a similar position in the EU sub-committee on which I have the privilege to serve—the judicial committee—both in terms of consumer protection, where any alternative is worse, according to those in the field, than the current relationship we have with the European Union, and also on the dispute resolution report that we have just published. What is clear is that this is an exercise in damage limitation for the United Kingdom. It is true, as the committee concludes, that there are several possible options which could be mutually beneficial, and who doubts that it is most important and mutually beneficial for us and the European Union that we work together? We have so much experience and so many resources, not least our intelligence resources, to bring to the table. But all other options are less desirable and make us weaker, and that is true over the field of foreign policy as a whole.
My second observation is that currently, our considerable expertise in the field is highly respected in the European Union and beyond, and its loss would weaken EU sanctions regimes. Not only that: our reduced weight in the debate would have a serious effect on the balance within the European Union. If we look, for example, at the EU sanctions against Russia, a number of countries, either because of geography or history, or more particularly because of their economic interests, are very wobbly on those sanctions. I think of Hungary, Austria—where both left and right are much weaker on Russia—to some extent the Czech Republic, certainly Cyprus, and certainly Italy in its current configuration, as it seeks a coalition. All these are reluctant partners in respect of sanctions against Russia, and the balance within the European Union will be substantially altered if our weight is taken from it. The loss of our influence is one reason why Russia belatedly intervened in the EU referendum, and we saw the allegations yesterday from the Conservative Member for the Isle of Wight about one Brexiteer tycoon who played a role on behalf of Russia in that referendum debate.
My next observation is far more positive: I turn to the question of sanctions against individuals for human rights violations. I commend and welcome the recent moves of the Government in this field. In the previous Parliament, the Government amended the Criminal Finances Act to allow our law enforcement agencies to recover from property in the UK the proceeds of human rights abuses, wherever in the world they are committed. This was the first part of the US Magnitsky Act; on the second part, on visa bans, the Government argued that adequate powers were available to exclude individuals whose presence was not conducive to the public good.
This week, in Tuesday’s debate on Report on the Sanctions and Anti-Money Laundering Bill, the Government went very much further. The result will be that sanctions can be made to prevent, or in response to, gross human rights abuse or violations. This is defined in a separate government amendment—I commend Sir Alan Duncan on his willingness to listen on this—to include the torture of a person by a public official or by a person in an official capacity, where the tortured person has sought to expose the illegal activity of a public official or to defend human rights or fundamental freedoms. This is a most welcome response to the Magnitsky case. Your Lordships may recall that Magnitsky, a Russian national, was an agent of Hermitage Capital Management who was tortured to death in a Russian prison. Subsequently, through an evidence trail, it became clear that Russian tax officials benefited financially from their misdeeds. The Russians took no action save to pursue Bill Browder, the head of Hermitage Capital Management, relentlessly, including at the moment in Cyprus.
Finally, there is a variety of relevant laws in force in this area in the US—the Magnitsky Act—Canada, Latvia and Lithuania. Relying on these precedents, and the precedent set by our own Government, I am producing a report to the Committee on Legal Affairs and Human Rights of the Parliamentary Assembly of the Council of Europe, which will encourage all members of wider European bodies to enact similar laws. The spreading of such precedence across the membership of the Council of Europe will be a memorial to Sergei Magnitsky himself and a tribute to Bill Browder, who has waged a most effective lobbying campaign to highlight the wrong done to Magnitsky and to seek an appropriate international response.
Lord Taverne (LD)
My Lords, many of my Liberal Democrat colleagues who are experts in this subject are away today door-knocking. I was not a member of the Lords committee, but I did read its very valuable recommendations and the subsequent debates, and I will do my best as a last-minute substitute. As often in the role of substitute, it will be very brief.
Everyone agrees that sanctions are most effective when they are applied on a multilateral basis. As EU members, and participating in the common foreign and security policy, the UK has played an important part, particularly in driving sanctions against Russia and Iran. If we leave the European Union, will the Government continue their participation in the CFSP? Even outside EU institutions, we would not be without some influence. For example, we did rally the rest of the European Union to support sanctions after the Salisbury incident. It is obviously in both our and the EU’s interest to co-operate closely. Nevertheless, if we leave, our influence is almost bound to decline, and the Lords committee seemed to fear that this may be so, as do many outside experts, in the RUSI and the LSE for instance.
As the noble Baroness, Lady Verma, pointed out, EU regimes account for about three-quarters of the sanctions that the UK currently implements. Boris Johnson, ever ready to exercise and declare his diplomatic skills, has argued that, outside the European Union, we will have more flexibility in our policy on sanctions and will no longer have to wait for the European Union to reach a consensus. In his perpetual search for ways of going it alone in splendid isolation, he seems unaware that the impact of 28 states jointly bringing their economic weight to bear on the targeted entities is likely to be rather more effective than the UK acting alone.
As the noble Baroness, Lady Verma, and the noble Lord, Lord Anderson, said, in his excellent contribution, all of which I agree with, if we leave the EU—that is not the phrase that the noble Baroness used—we might still wish to follow EU sanctions. Joint action would not only be more effective but—an important point—would protect British business suffering from the economic harm of acting alone. However, we would have no say in the design of such sanctions. There are often clear divisions between member states, and we would no longer be able to influence the resolution of disagreements in a way favourable to our interests. Furthermore, it is not only exclusion from the decisions of EU institutions that would deprive us of influence but also the absence of informal contacts at marginal meetings, which can be invaluable for finding out what proposals may be acceptable. That has not always been the case for the proposals put forward by our EU negotiators.
Sanctions are yet a further example of what Brexit would mean: losing control rather than taking it back.
Lord Risby (Con)
My Lords, first, I warmly thank my noble friend Lady Verma for introducing this discussion and so ably chairing our committee. I thank also the committee clerks, who did a magnificent job in bringing this report to fruition.
Whatever our view is of Brexit, all of us wish our country to have a standing in the world for a multiplicity of very good reasons. At the heart of that are our own important values. In the past few decades we have seen those values exported and, in varying degrees all over the world, actually adopted. That is largely due to our working in co-operation with like-minded countries. Overall, the adoption of more democratic values has been gratifyingly successful, but of course there remain countries that do not respect human rights or wish to undermine the advances towards greater democracy that we cherish, or that threaten peace and stability outside their borders.
Sanctions have been a most useful tool in reining in aggression and actually changing behaviour. At the moment, for example, we may see this process under way in the Korean peninsula—we certainly hope so. A more aggressive sanctions regime against Russia is perhaps partly why the recent missile attacks into Syria, and the appalling Skripal incident, have not resulted in some of the threatened retaliation from Russia. Targeted sanctions on individual Russians seem to be proving efficacious as we put into legislation anti-money laundering activities with a new sanctions policy in our country framework outside the EU. But during the course of our inquiry what emerged was the desirability—the absolute necessity—to find formulae for continuing to have the closest common position on sanctions with our European neighbours.
This country implements more than 30 sanctions regimes targeting both countries and violent and often fanatical groups within countries. The response may be asset freezes, travel bans, or financial or trade restrictions. It is clear that, with the experience of hindsight, while these punitive measures may arise from UN Security Council resolutions, many arise from decisions of the European Union as well. That is at the heart of what the committee’s report was all about. Apart from anything else, as we have heard already this morning, Russia has wielded its veto in the UN Security Council with no hesitation when it perceives that its own interests are being undermined. We know that, historically, it is a country that is hugely sensitive about defining and defending its own perceived interests.
What emerged in the comments of experts interviewed by the EU External Affairs Sub-Committee was a loud and clear message that the words “efficacious” and “cross-national co-ordination” were inextricably linked, and that successful multilateral action for the United Kingdom immeasurably enhanced our capacity and desire to achieve results. Indeed, the majority of UK sanctions are linked with EU sanctions as well.
I very much welcome the Government’s commitment to maintain the highest level of co-operation and co-ordination with the EU after we leave, not least because that puts us at an advantage in helping to align sanctions activity with other countries and most notably collectively with the United States, and because London remains pre-eminent—head and shoulders above in importance—over other European financial centres. In practice, it would be unlikely that we would wish to differ from EU decisions in sanctions policy even if we had no formal role, and particularly if the EU had been in direct contact with the United States—a pattern that is well developed—when drawing up a common sanctions position. So my question for my noble friend is, in building the Government’s intention to have a tailored Brexit arrangement, can he share the Government’s thoughts more explicitly on what that means? Will the Government suggest for the future a formal body to be constructed to deal with a sanctions matter? Indeed, when we enter the transitional period after finally leaving the EU, does my noble friend expect such a structure to be in place?
As a country, we have unique attributes much valued by other EU members, most notably our defence and intelligence capabilities. When the Prime Minister indicated that future co-operation in these areas would be unconditional, it was hugely appreciated.
We continue to have a remarkable global reach and much admired soft power, but the clock ticks on inexorably. In this most important area of our national life, our willingness to confront those who undertake unacceptable actions is greatly valued by EU members. Important decisions in our national interest need to be taken now. Integral to this, with our shared common values, is for us to start outlining the structures needed post Brexit to maintain those important links and deal with rogue states, targeting our like-minded European neighbours to work closely with us. We need to deal with these rogue states and individuals—criminal and terrorist—in a collective manner. I hope that my noble friend will be able to put more flesh on the bones of this endeavour, particularly in respect of sanctions in our mutual interest.
Lord Jay of Ewelme (CB)
My Lords, it is a great pleasure to follow the noble Lord, Lord Risby, with whom I entirely agree. I congratulate the noble Baroness, Lady Verma, and her committee on an excellent report on an extremely important subject.
I will start where the report ends and emphasise, as others have done, that sanctions are an important part of a wider foreign policy endeavour. They are essential in helping to fill that often difficult area on the foreign policy spectrum between doing nothing very much and going to war. However, sanctions are of little use on their own. They need to be combined with other foreign policy instruments: the appointment, or sometimes removal, of embassies and ambassadors; criticism of or expulsion from international organisations; and limited military activity. Proper co-ordination of those instruments is needed.
Equally, sanctions need to be properly targeted, as the recent debate on sanctions against Russia has shown. What is the most effective way to not just punish a country but attempt to change its policy? In Russia’s case, targeted sanctions against individuals—particularly those close to Putin—and their overseas assets would be far more effective than less focused sanctions. It follows that sanctions need to be as far as possible collective. The UK may be the fifth-largest or sixth-largest global economy—we are in a constant tussle with France, which I sometimes think has more to do with the fluctuating exchange rate than the real economy—but we can do little by imposing sanctions on our own. Sanctions are effective as part of an international effort, ideally through the UN, but if that is impossible—as is often the case, alas—through the European Union.
That is never straightforward, as I well remember from many often difficult negotiations over sanctions in the past. The UK’s interests, and in particular the potential effect of sanctions on the City of London, will not always coincide with the interests of other European Union member states, so compromise will always be needed. Even if they are imperfect, sanctions agreed by 28 states are a lot better than no sanctions or divided sanctions.
As others have said, the UK’s influence over the form that sanctions have taken up to now has been considerable and extremely important in ensuring an effective EU sanctions policy. That will present us with problems when we leave. We will not be part of the EU 27 mechanism that formulates EU sanctions—but if as a result we do not take part, those sanctions will be less effective and our foreign policy interests will suffer. Sir Alan Duncan put that point to the committee extremely well. I am not quite sure how his remarks are consistent with the quote from Boris Johnson, mentioned by the noble Lord, Lord Taverne, but I will leave that aside for the moment. Paragraph 74 of the report states:
“Sir Alan Duncan said that, after leaving the EU, it was ‘inconceivable that we will not be a strong and important part of collective governments’ action on sanctions, be it through the UN, in which we are a major player, the P5 … or’”—
this is the important point—
“‘replicating what the EU does’”.
I welcome this, but let us reflect on “replicating what the EU does”. Therein lies the dilemma. Without our influence, the design of EU sanctions will be less to our liking, and replicating them will be more difficult and domestically contentious. The risk is that there will be divisions not only among government departments but between government departments and the private sector. I therefore hope that we will succeed in developing some form of formal or informal consultation mechanism on sanctions, as indeed on other foreign policy issues, at both official and ministerial level, with the EU after we leave. Like others who have spoken, and like the noble Baroness, Lady Verma, I would be very grateful if the Minister would confirm that that is indeed our intention and give us whatever evidence he can of how far he thinks we are likely to succeed in reaching that objective during the negotiations.
Whether we succeed or not—and I hope we will—we shall need to intensify bilateral contacts to compensate for our absence from formal EU consultative and decision-making fora. We should do so particularly with France as a fellow permanent member of the UN Security Council. As I well know, the foreign policy relationship with France is not always straightforward—we should remember Iraq or relations within NATO before France rejoined the integrated military structure. There may be differences ahead as France pushes, after our departure from the EU, for a more integrated EU foreign and security policy with a stronger defence element than we shall like. But I hope we will not let those differences get in the way of the close co-operation we shall need after Brexit on sanctions and wider foreign policy issues with France and, indeed, with the EU 27 as a whole. As the Prime Minister often says, we will remain a European country after Brexit—all one has to do is look at a map—and a close relationship with the EU 27 on all foreign and security policy issues, including sanctions, will be strongly in the interests of all of us.
Lord Tugendhat (Con)
My Lords, it gives me very great pleasure to speak in this debate on a report produced by the sub-committee of which I was chairman before my noble friend Lady Verma. I congratulate her and the members of the committee, and indeed the clerks, on the quality of the report that has been produced.
This debate is also taking place at a topical moment in the light of what is happening in Korea—events to which my noble friends Lord Horam and Lord Risby have already referred. What exactly has brought the North Koreans to the table? One cannot be sure, of course, but certainly United States strategic pressure on the one hand and Chinese economic pressure on the other have played a significant role. According to Reuters, in January China exported virtually no oil products to North Korea and imported no iron ore, coal or lead. This is an encouraging example of how effective sanctions can be. Of course, China is not the only contributor, but it was by far the most important one in bringing pressure to bear.
By virtue of its dependence on China, North Korea is, of course, an unusually simple case. I very much agree with the following in the Government’s reply to the report:
“sanctions regimes are more effective when they are implemented by a broad range of countries”,
in support of a strategic policy than when they are conducted by a single country or small group of countries.
At this point, it becomes clear how much damage is done to the European Union as a result of Brexit. I am reminded of an inter-parliamentary gathering I attended when I was chairman of the sub-committee. A member of some other Parliament—I cannot remember which—asked the representative of Mrs Mogherini whether it would not much easier to reach decisions if Britain were to leave the European Union. The representative replied, “Yes, it probably would be much easier to reach decisions—and they would be worth much less”. She pointed out how weakened the European Union would be without Britain’s global reach and without the other assets referred to in this debate, of which the City of London in this context is an important one.
As the noble Lord, Lord Taverne, and others have pointed out, Britain, too, will be weakened. The Government’s reply suggests that the United Kingdom’s influence on international sanctions policy derives only partly from our current EU membership and points to our membership of the Security Council, but, as my noble friend Lady Verma and other noble Lords have pointed out, that is somewhat disingenuous: we all know how difficult it is to organise effective policies of this kind through the United Nations because of the Russian and Chinese vetoes. It is in the EU that we have played our most effective role, and it is within the EU that we will be most missed.
The report and the reply therefore dwell, as other noble Lords have done, on the need as far as possible to continue close co-operation with our EU friends, which is in their interest—indeed, more so—as well as ours. However, it will not be easy. Clausewitz is reputed to have said that war is simply a continuation of political influence with the addition of other means. If that is true of war, it is certainly true of sanctions. Sanctions emerge from discussions on common foreign and security policy, from which a common purpose or a coalition of the willing begins to take shape. If our influence and the value of our contribution are to be maintained, we have to be part of the initial discussions and not simply come in when the broad lines of a policy have been set. I make this point because, to be effective, not only do sanctions need to be implemented by a broad range of countries but their burden needs to be shared as fairly as possible among the participants. If the burden of the sanctions is not fairly shared, it is unlikely that they will be fully implemented. If we are not a part of the initial deliberations, EU policies will inevitably begin to take shape without taking our views sufficiently into account. That does not mean that a joint policy cannot be formulated, but it does mean that time will be wasted in achieving that joint policy.
Regardless of our particular issues in the European Union, though certainly including them, financial measures are likely to play an increasingly important part in sanctions regimes in the future. That is, of course, because they can be targeted not only on states but on individuals, and because, in the nature of the modern economy, so much international trade is financed through operations in New York and, to a lesser extent, London. Therefore, the role of the financial sector in implementing sanctions will be increasingly important, which is why Brexit is so damaging to the European Union in this respect. If sanctions are going to rely increasingly on the financial sector, this will raise very considerable problems for the United Kingdom. It is going to be very difficult for us to ensure that, in imposing sanctions, we are not imposing restrictions on the way our markets work or putting ourselves at a disadvantage in coming to agreement on joint policies with other people. I do not have an answer to that; I just raise the point that I think financial measures will be more important, and this adds to the difficulties in formulating effective regimes in the circumstances that will apply after Brexit has taken effect.
Lord Kerr of Kinlochard (CB)
My Lords, I agree with the noble Lord, Lord Tugendhat, particularly his last point. I also very much agree with what the noble Lord, Lord Jay, said. It will come as a huge surprise to the House, I should think, that he and I agree—he is coming on quite nicely. My worry is that we ourselves, as far as I know, have not yet put forward any proposal to our European Union partners in this area. The noble Lord, Lord Jay, ended by asking the Minister to flesh out the tailored arrangement that Sir Alan Duncan had in mind. All we get in the report is that the Government’s ambition is for an “unprecedented” level of co-operation, which is an “untested” approach. That seems to me a slightly tautologous statement: if it is unprecedented, probably it is a little bit untested.
The report goes on to say:
“If participation in the Common Foreign and Security Policy after Brexit is not possible—or not sought by the UK”—
well, participation in the common foreign and security policy will not be possible after Brexit: the CFSP is for members of the European Union—
“then the Government should propose that a political forum be established between the UK and the EU, for regular discussion and co-ordination of sanctions policy”.
I entirely agree. It sounds very mechanistic, but you need to have a structure, with regular meetings. We will not be in the room, having a voice in the decision taken on sanctions in the European Union, but we need to have the room next door. We need to be there regularly, the day before they decide or the morning of the day they are going to decide, able to influence the decision they take. Putting forward a proposal for that kind of consultative architecture would be well worth doing in itself, for the reasons I have just given. It would also be extremely helpful to the atmosphere of the ongoing negotiation with the European Union.
Lord Collins of Highbury (Lab)
My Lords, the noble Lord, Lord Taverne, reminded us that it is election day, and I must admit that it is one of those rare occasions when I was rather hoping there would be more Lib Dem Peers in here than there are.
Moving on from that, I too thank the noble Baroness for her introduction, and all her colleagues for what is an excellent and timely report. It is timely because we have seen, down the other end, consideration of the Sanctions and Anti-Money Laundering Bill. Many of the contributions made today were made at Second Reading of that Bill, because it is critical: sanctions are not made in isolation of our foreign policy; they have to be an integral part of it. Of course, without the Sanctions and Anti-Money Laundering Bill we would not be able to fulfil even our most basic international obligations as a member of the United Nations. We know, as we have heard in this debate, that most of the sanctions we have been considering come through EU regulations.
The other point is that the Bill will return to this House in a week or so. One thing I have been pleased to see—and noble Lords have alluded to this—is that when MPs are actually given the opportunity to consider Bills freely, they often make the most progressive and right choices. We have seen that with the sanctions Bill, so I hope that we will not have to consider too much when the Bill comes back.
Everyone accepts the need for co-operation to ensure sanctions are effective. In isolation, sanctions simply do not work: they are gesture politics; they might ease the consciences of some people, but we adopt sanctions for a specific purpose, as the noble Lord, Lord Horam, alluded to. For non-UN sanctions, what we are discussing is how the Government ensure not just that UK-EU co-operation continues after Brexit but that we maintain the ability to shape decisions on EU sanctions in terms of when and how they are imposed—the noble Lord, Lord Tugendhat, is absolutely right on that. But this is not just about when and how sanctions are imposed, it is also about how the burden is shared and how we create greater co-operation.
The EU Committee has rightly pointed out that participation in the EU sanctions regime has helped the UK to achieve its foreign policy and national security goals. As my noble friend Lord Anderson said, EU sanctions have sent powerful signals to such states as Russia and leveraged the bloc’s considerable economic weight to change countries’ behaviour—noble Lords have referred to Iran in this context.
As to the future, we have the Government’s declared intention to continue to work closely with the EU and other international partners on sanctions post Brexit. As we have heard, the report examined a number of options as to how this might be achieved, including the UK aligning itself with the EU sanctions regime. Noble Lords have alluded to the fact that Norway and Switzerland have done this but that, in doing so, we would lose the ability to shape the sanctions. As the noble Baroness said, informal engagement with the EU on sanctions is no substitute for the influence that can be exercised through formal inclusion in EU meetings. The noble Baroness also said that the extent to which the UK and the EU co-operate on sanctions will depend on their future relationship in the wider foreign policy area. I agree with the report that this is an area that needs urgent consideration.
In her speech at the Munich security conference, Theresa May argued for a partnership,
“which offers the UK and the EU the means and choice to combine our efforts to the greatest effect”.
On sanctions, she suggests that we should be open to doing this through EU mechanisms, but in doing so, she said that,
“the UK must be able to play an appropriate role in shaping our collective actions in these areas”.
Every noble Lord has said that today: what we are concerned about is the Government’s response, which says this can be done through regular dialogue, specific co-operation, close consultation on policy issues, et cetera.
As the noble Lord, Lord Kerr, said, what we have not heard about from the Government are the precise mechanisms allowing these discussions and the co-ordination of sanctions policies to take place. When will we hear the detailed plans for effective co-operation? As the Minister said many times during the passage of the Sanctions and Anti-Money Laundering Bill, I suspect these items are subject to negotiations—what we want to know is what the Government’s objectives are: what do they hope to get out of these negotiations? It is simply not good enough to be so vague. If the parties in the negotiations do not know what you are asking for, how will they reach a sensible conclusion?
That is the simple point made by the report, and what I hope we will hear from the Minister today. I ask him to tell us what the Government hope to achieve and what the mechanisms are that will ensure that we have proper co-ordination in the future on sanctions and foreign policy.
The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, I thank all noble Lords who have participated in this important debate, particularly my noble friend Lady Verma for tabling it. I pay tribute to her long-standing commitment to these issues. That is not just in her capacity as chair of the EU External Affairs Sub-Committee as, on a personal note, I assure your Lordships that, over the different roles of my ministerial career, if my noble friend has had something to tell me I know about it very quickly. I appreciate her candid and honest advice at all times.
I thank all noble Lords for their expert insight into the debate. When I stand up to respond to a debate on any respect of the European Union I am reminded of the words of my noble friend Lord Howard on my introduction to this House back in 2011. He said, “Tariq, I have not been in this House that long myself, but one piece of advice I can offer you is, before you say anything about a subject, bear in mind that someone around you has probably written a book about it”. That applies to the debates we have on the European Union. I am delighted to thank all members of the sub-committee for the report and their contributions today and to respond on behalf of the Government. The phrase “flesh on the bones” has been used a number of times and I hope I can provide some build-up beyond the structure we have talked about thus far.
In response to this wide-ranging debate, I will set out where the sanctions fit within our vision of a post-Brexit foreign policy and explain how we see our future sanctions policy operating. I was delighted to learn that the noble Lord, Lord Collins, has been paying such attention to my right honourable friend the Prime Minister’s speeches. I will pass that comment on to her at the earliest opportunity. It is very welcome; I know him well. He also mentioned the sanctions Bill and said that on a number of occasions I had said that of course it was subject to negotiations. He will also remember that through the passage of the Bill in this House I consistently said that the Government were listening. I hope that reflects the sentiments of the other place as well. Indeed, my colleague Sir Alan Duncan has been quoted on a number of occasions.
I assure noble Lords that as we leave the European Union we intend to pursue an independent and ambitious global foreign policy—one focused on security, prosperity and influence for the whole United Kingdom, by actively promoting and defending our interests and values. My noble friends Lady Verma and Lord Risby both talked about the values. I assure all noble Lords that we take our international responsibilities seriously and will remain an authoritative and influential player on global issues. The noble Lord, Lord Horam, among others, listed some of the areas in which the United Kingdom continues to be an important influence. Indeed, yesterday we were pleased to host at the Foreign Office and the IMO the hierarchy of the United Nations, which reflects the positive nature of the engagement we have with that organisation. Indeed, Secretary-General Guterres was complimentary and positive about the UK’s continued contributions on the world stage. When you include NATO, the G7, the G20, the OSCE and the Commonwealth—I cannot miss an opportunity to mention the Commonwealth—you see the global influence of the UK.
A point that is often raised about British foreign policy is our assets—our places on the ground, our diplomatic posts. I am sure your Lordships followed the announcements that my right honourable friend the Foreign Secretary made during CHOGM. One alluded to the opening of nine new diplomatic posts across the Commonwealth family. The noble Lord, Lord Jay, talked about how we may be the fifth or sixth-largest economy. Sometimes in our friendly rivalry with our French friends we ask who has the most posts; I believe that on the last count we are now one ahead but I am sure that our French friends are watching that closely. But as noble Lords have acknowledged, we are a major country economically, diplomatically and on issues of defence.
Several noble Lords referred to the City of London as a part of our soft power. I believe that my noble friend Lord Horam referred to the importance of the City of London as a financial centre. As someone who spent 20 years in it before joining the Government, I assure your Lordships that it is important that we keep the global nature of the City of London open.
On the issues concerning the Foreign Office itself, the 2015 spending review protected the FCO’s budget for this year and, as I said, we continue to open new posts. Let me also assure noble Lords that we are working to develop and strengthen our bilateral relationships with our key partners, both in Europe and globally, to maintain and expand our international influence. The noble Lord, Lord Jay, talked about the importance of France and I am sure that he observed with real positivity the exchanges that we had during the Anglo-French summit. Of course, that summit covered a range of issues: not just security and defence but important issues such as technology, the challenges across cybersecurity and development. That shows the importance of our European Union partners, but not just in the context of the European Union. Poland is another country with which we have recently had a very positive, high-level exchange. This demonstrates the importance of the bilateral relationships between the United Kingdom and those respective countries.
As the Prime Minister set out in her Munich speech in February, the United Kingdom continues to seek a deep and special partnership with the EU, so that we can continue to co-operate on security and foreign policy and go further to meet new threats. We saw that solidarity in the strength of the response after the nerve agent attack in Salisbury, and saw how important this co-operation continues to be. Yes, this co-operation must extend within the context of the European Union but also go beyond it, as it does now, because we know that the wider the range of countries implementing a sanctions regime, the more effective that regime will be. This was a point made by many noble Lords during the debate. I assure your Lordships that we will work hard to get the broadest possible agreement for any measures we propose, starting with our position as a permanent member of the UN Security Council.
After we leave the European Union, I can assure the House that our approach will be one of co-operation. Sanctions will continue to be, by their nature, a multilateral tool and we will continue to seek to impose them in co-ordination with others. If I may turn to working directly with the European Union and a point raised by my noble friend Lady Verma in her introductory remarks, until we leave the EU we remain committed to our rights and responsibilities as an EU member state. This includes continuing our proactive approach on sanctions, in pursuit of our security and foreign policy objectives.
I can also assure noble Lords that, after we leave, we will continue to work with our EU partners to maintain our collective peace and security. As noble Lords have all acknowledged, sanctions will be a powerful tool in that effort. As my right honourable friend the Foreign Secretary told the House of Commons at the Second Reading of the Sanctions and Anti-Money Laundering Bill, he hopes that we will “act in tandem” with the EU on sanctions, where possible, because we,
“will always confront the same threats and defend the same values”.—[Official Report, Commons, 20/2/18; col. 78.]
If I may turn to the specific questions, first, my noble friend Lady Verma and the noble Lord, Lord Jay, raised the option of aligning with sanctions regimes agreed by the EU 27. This would be along the lines of, or in a similar fashion to, the likes of Norway or Switzerland, which implement UN sanctions and have the powers to implement autonomous national sanctions. We understand that Norway and Switzerland rarely, if ever, implement unilateral sanctions and instead choose to align with EU sanctions, with limited input on decisions. As such, we are not seeking this option as part of our future relationship with the EU. We have been clear that when we leave the European Union, we will seek to impose our own autonomous sanctions.
As the Foreign Secretary told the House of Commons at Second Reading of the Bill, we will be able to concert our measures with the EU if there is a shared position, but by leaving the European Union we will be able to act independently or alongside other allies if there is no agreement within the European Union. The sanctions Bill will give us the powers to do so. This differing framework means that in the long term, any co-ordination with the EU on sanctions would be political, rather than the legal alignment we have now.
Given our independent foreign policy and our sanctions expertise, it would be inappropriate in the long run for us to adopt EU sanctions automatically, without any input into decisions or the flexibility to choose our own approach. I assure noble Lords that as part of our future relationship we are seeking an arrangement that appropriately reflects this.
Turning to some of the specific questions, my noble friend asked about aspirations for sanctions co-operation after Brexit and the model of sanctions co-operation based on two-way exchange, and my noble friend Lord Risby and the noble Lord, Lord Kerr, referred to the proposal for a UK-EU political forum. My noble friend Lady Verma asked for a detailed explanation of the Government’s aspirations for sanctions after Brexit. I assure my noble friend that, as we have said before, including in our reply to the committee’s report, we envisage a model of UK-EU sanctions co-operation based on two-way exchanges of analysis and information. This is still our vision. When we look at some of our international security co-operations, the Five Eyes co-operation comes to mind immediately. It demonstrates how like-minded countries acting on common values can come together to act in the common shared security interest.
Given our shared interests and values, the importance of multilateralism in this area, and the UK’s expertise, it is in both the UK’s and the EU’s interests to be able to discuss sanctions in the future. Any mechanism to do so should respect both the EU’s decision-making autonomy and the UK’s sovereignty, and, through the exchange of analysis and information, will allow us to combine our efforts on sanctions to the greatest effect.
The committee recommended that the Government should propose a regular political forum with the EU to discuss and co-ordinate sanctions policy. My noble friends Lady Verma and Lord Horam asked me to comment on this specifically. A forum such as this is one way in which this close co-operation could be put into practice, but there is a range of forms this could take. I assure noble Lords, and my noble friends in particular, that we have now moved into the next phase of negotiations with the EU where we are discussing our future relationship on a wide range of issues, including foreign policy and sanctions. I am sure noble Lords will respect the fact that it would be inappropriate for me to go into too much detail at this point, as these are discussions that will be had with our European partners, but we are starting from a position where both sides have agreed close engagement through both formal and informal mechanisms.
My noble friend also asked about our intent. The European Council’s guidelines for our future relationship give us good reason to believe that the EU is also committed to progress on an arrangement of this kind. The guidelines state that there should be “strong EU-UK co-operation” in our security, defence and foreign policy and they foresee,
“appropriate dialogue, consultation, exchange of information, and cooperation mechanisms”.
This mutual agreement on the benefits of close co-operation is welcome and, during the upcoming negotiations, we will be working towards achieving this in practice.
Several noble Lords, including the noble Lords, Lord Taverne and Lord Anderson, spoke about loss of influence and expressed concern that our influence on sanctions will be diminished as we leave the EU. I disagree with this assessment. I have already alluded to the strength of the UK’s position in different fora and our representation in different international bodies but when it comes to sanctions, it is clearly in the interests of our international partners to continue to co-operate across jurisdictions, for the EU to co-operate with us and for us to co-operate with the EU.
With regard to the EU specifically, we know from its negotiating guidelines that I have just alluded to that it wants to maintain close links with us on foreign and security policy, of which sanctions remain an integral part.
Lord Hunt of Chesterton (Lab)
The Minister has talked a couple of times about maintaining a lead. The fact is that in leaving the EU we are seriously losing our position in some of these important high-technology defence matters; the Times yesterday was referring to the Galileo programme. These are very serious changes that are taking place. Is he really saying that we are going to be stronger as a result of our likely measures?
Lord Ahmad of Wimbledon
The noble Lord is right to raise the issue of technology. A direct response to that is that when you look at some of the issues, specifically on security, cyber security perhaps poses one of the biggest challenges that we are now confronting. The National Cyber Security Centre, which is just up the road in Victoria, again demonstrates UK expertise and insight.
I assure the noble Lord that in leaving the EU we have been able to further strengthen our work not only in the European context but internationally. Indeed, during the Commonwealth summit we announced an additional £15 million in support of cybersecurity assessments for various Commonwealth states. The noble Lord shakes his head but I do not agree with him. The position that we are setting out during the Brexit negotiations is one of co-operation and working together where our needs align with the EU, but at the same time looking at the broader world, the global challenges that we are facing and our position through the different international bodies that I have alluded to. On the question of technology, if the noble Lord has not yet visited the National Cyber Security Centre then perhaps he should, and he will see that it is a world-class outfit that again demonstrates British leadership on what I agree is an important issue.
I assure noble Lords that we have a long-established reputation for playing our part in developing strong, credible and lawful EU sanctions, and we have a range of assets that will continue to make us an attractive partner for the EU on sanctions policy. This includes the strong public and private sector expertise, with significant resources devoted to sanctions across government—again, I refer to the City of London—as well as a world-class legal system and well-respected think tanks. These are all important assets that we have.
As I mentioned earlier, our influence on international sanctions is not limited to our role at the EU. Roughly half the sanctions regimes currently in force contain UN Security Council measures. We are a permanent member of this important body and will continue to play a leading role in developing global sanctions. Given this, we believe we will remain one of the leading sanctions players after we leave the EU.
My noble friends Lady Verma and Lord Risby referred to the important issue of the implementation period. As I have said, we envisage close co-ordination with the EU on sanctions as part of our future relationship with the EU. The Prime Minister has already mentioned this specifically in her Munich speech. The details of the mechanisms to enable co-operation during the implementation period are still very much subject to negotiations but I assure noble Lords that we will seek a co-ordinated approach on sanctions before decisions are made.
My noble friend asked, as did the noble Lord, Lord Taverne, about the issue of the UK/EU relationship on common foreign and security policy. At the March European Council the UK agreed arrangements with the EU for how common foreign and security policy would work during the implementation period. This included an agreement covering our future relationship on the CFSP, and the CSDP would come into effect during the implementation period. The UK hopes to begin discussions on our future relationship very soon.
I shall refer also to the sanctions Bill. When we leave the EU, we will of course need powers to design and implement the UK autonomous sanctions regime. The committee referred in its report to the framework contained in the Sanctions and Anti-Money Laundering Bill, which many noble Lords are familiar with; the noble Lord, Lord Collins, talked about that quite specifically. The report raised the concern that the Bill, along with the future economic arrangements between the UK and the EU, could limit the extent to which sanctions co-operation could be put into practice. As noble Lords will be aware, the Bill completed Report and Third Reading in the other place on Tuesday and will return to this House in due course for the consideration of amendments here. Changes have been made to it, and those amendments include making clear that sanctions regulations can be imposed for the purpose of preventing or providing accountability for gross human rights abuses, a point made very well by the noble Lord, Lord Anderson. As the Minister for Human Rights, let me assure him that that is an important addition and recognition which will allow the UK to act against those responsible for serious human rights abuses or violations worldwide. They also include important powers to enforce sanctions on board ships outside UK territorial waters, to strengthen our efforts to counter the transportation of dangerous and harmful goods and technology and the ability to create criminal offences for breaches of sanctions regulations, subject to statutory mechanisms controlling the use of that power.
As the Bill stands, we are confident that it will not limit appropriate co-ordination with international partners. It was drafted for flexibility. I again commend the positive way in which the Bill progressed through your Lordships’ House. It was drafted to ensure that we can continue to impose sanctions currently implemented through EU law, and that has been improved through the helpful scrutiny of both this House and the other place. If the key provisions of the Bill remain in their current form, we are confident that we can use this framework to co-ordinate effectively with our partners and remain a leader in responsible and smart sanctions policy.
The noble Lord, Lord Anderson, among others, mentioned the sanctions on Russia and the nature of Russia. As we have seen, they are having an effect on Russian policy. Many noble Lords, including my noble friend Lord Horam, mentioned Iran. Most of the financial and economic sanctions against Iran were indeed lifted following the International Atomic Energy Agency’s verification. There are now far fewer sanctions in place, easing previous restrictions on trade with Iran, and we are clear that the JCPOA is in the UK’s national security interest, that it is working and that we remain committed to it.
My noble friend Lord Tugendhat also raised the issue of the DPRK. Our latest sanctions on the DPRK build on the tough measures that the UN has passed over the past year. They target significant income streams used by the DPRK to fund both nuclear and ballistic missile programmes. I heard the sentiment of noble Lords across the House: with the challenges that we sometimes have on the world stage, there is a glimmer of hope through the recent meeting of the two Koreas. We hope that those talks, and those with America—the US—progress well.
My noble friend Lord Horam also mentioned transparency, and he was right to raise the issue of London property. Returning to the sanctions Bill, as he may recall, my noble friend Lord Faulks introduced an amendment and the Government gave a commitment to bring forward a Bill making provision for a UK register containing details of the overseas companies which own property in the UK. We anticipate doing so early in the next parliamentary Session and, as we committed, establishing that register by 2021.
To sum up, the Government are deeply grateful for the EU External Affairs Sub-Committee’s report and believe it to be a valuable tool and contribution to the important debate on the UK’s future relationship with the European Union and future foreign policy in general. We are confident that the UK will remain a leading international player on sanctions after we leave the European Union. Let me assure noble Lords that we will continue to work closely on this vital area with our partners in Europe and across the world to advance our foreign policy and national security interests.
Finally, the report has provided some very useful tools and points of discussion, which I assure your Lordships that the Government continue to consider very carefully. I am once again very grateful to all noble Lords who have contributed to this important debate and assure noble Lords that, as we work through the policy, particularly in this important area of sanctions, we have listened. It is important to get this right and, in this respect, I always welcome both the wisdom and, at times, the wit of your Lordships’ House in ensuring that the Government can work progressively and in co-operation to ensure that the sanctions policy and regime we have in place after we leave the European Union is one that works for everyone.
Baroness Verma
My Lords, I thank all noble Lords for their very thoughtful and measured contributions. There was a common theme from across the House. I think we were expecting the response from the Minister that we got. While I appreciate that he tried very hard to respond to our questions, I was not really satisfied. I feel that we are still where we were—waiting for a response from the Government to see where we next journey once we exit the European Union and what that structure will look like. I hope that my noble friend will urge colleagues to take this on board. It is important that we do not fall out of the strongly influential position we hold or out of the great friendships with our European partners.
I remind my noble friend, who said that we will continue to build strong relationships with the Commonwealth and the UN, that we are members of those organisations already, as we are of the EU. I strongly hope that we can build better and closer relationships, particularly with the Commonwealth, but we need to make sure in building those relationships that we do not forget we have a relationship already in existence. This relationship works to make sure that countries not behaving in a way that is acceptable to all of us have sanctions put in place against them. That is often done by a very strong collective voice.
Our committee worked really hard to ensure that we were of assistance to the Government in looking at areas such as these, which have not have great debate but which are crucial not just for the City of London but for all of the UK and our partners in Europe. I hope very much that the Government will look very closely at what we are asking from this debate today. From across the House, there was a common theme—I do not think it was party political—which was our fear of not being able to be the great influencer at the table, and we urge the Government to take note.
I will also say to people who listen to debates in the House of Lords and comment on our suitability to be present, that this is why this House is so great. It looks at issues such as this in great detail to ensure that we have debates on crucial matters that impact not just on us here in the UK but on many people across the globe. On that note, I beg to move.