The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)
I thank my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) for securing this important debate. I am grateful to him and other hon. Members for the points they have raised, which I will do my best to address this evening. As ever, I will make sure that we write to Members if I am not able to pick up any specific points.
As we move into the second year of Putin’s illegal and brutal war, I am grateful for the ongoing unity shown by hon. Members on both sides of the House and for the shared determination to support President Zelensky and all Ukrainians until they prevail. It is an honour to have some of our Ukrainian friends in the Gallery today.
Before addressing the seizure of Russian assets, I underline the magnitude of the UK’s response to Putin’s invasion. Although I hear the challenge of the hon. Member for Rhondda (Sir Chris Bryant) on the quantum of sanctions to date, I will set out what we have done so far. The UK alone has sanctioned more than 1,500 individuals and entities with a net worth of $145 billion, and we have frozen more than £18 billion-worth of Russian assets—assets that Putin now cannot use to fund his war machine. We have also introduced an unprecedented number of trade measures, which have led to a 99% reduction in imports of goods from Russia and a 77% reduction in exports of UK goods to Russia. All those measures have been determined to restrict Putin’s ability to fund and sustain his illegal war. The measures represent the most severe sanctions ever imposed on Russia. The package of sanctions to date includes asset freezes on 23 major Russian banks, with global assets worth $960 billion—that is 80% of Russia’s banking sector—the prohibition of Sberbank from clearing and the removal of 10 banks from SWIFT.
I remind the House that we have sanctioned the Wagner Group in its entirety, and its leader, Prigozhin. My right hon. Friend the Member for Chelmsford (Vicky Ford) will know that, although I cannot comment on whether an organisation is or is not under consideration for proscription, her comments have been noted.
Liam Byrne
The Financial Times has revealed that the Wagner Group has channelled $250 million into its organisation through sanctions evasion. Is that not evidence that the sanctions implemented against the Wagner Group are not working? What information can the Minister supply to persuade the House that the enforcement regime is actually effective?
Anne-Marie Trevelyan
I will come back to that in a moment.
The right hon. Gentleman also set out, with his usual articulateness, a very clear pathway through which the UN and the international community might work together to seize Russian state assets. I hope I can reassure him that we will continue to work at the UN with all like-minded countries to address the asset seizure challenge.
The latest package of internationally co-ordinated sanctions and trade sanctions was introduced to mark the anniversary of the invasion on 24 February, and it includes export bans on every known item Russia has used on the battlefield. This combined package of sanctions has been carefully constructed with our allies to cripple Putin’s supply chains, to limit his ability to finance his war and to target those who are propping up his regime. It serves as a stark reminder to Russia and any other would-be hostile actors of the cost of flagrantly assaulting the democracy, sovereignty and territorial integrity of another nation.
As Members have highlighted in the debate, the reconstruction of Ukraine is absolutely at the top of the international agenda, while we continue to support Ukraine to defend its country. In September, the World Bank estimated a cost of $349 billion to rebuild Ukraine—a figure that has been rising every day since. Indeed, colleagues have highlighted recent assessments with figures of about $750 billion. Those are monumental sums to consider in respect of the reparations that will be needed.
The UK Government will continue to take a leading role in determining how to assist in this long-term reconstruction challenge. In June, we will be co-hosting the 2023 Ukraine recovery conference in London, alongside the Ukrainian Government. Together, we will mobilise public and private funds to ensure that Ukraine gets the reconstruction investment it needs.
We also remain committed to continuing our direct support for Ukraine. To date, we have helped more than 13 million Ukrainians affected by the war, providing them with £220 million of vital humanitarian assistance, delivered through the United Nations, the Red Cross and other non-governmental organisations. We will continue to work alongside our Ukrainian friends in support of their military defence for as long as they need us to do so.
The key issue of seizing Russian assets to fund Ukrainian reconstruction is one that the Government are extremely focused on, and we are in close discussions with friends and allies. The Government remain clear that Russia must be made to pay for the harm it has caused in its illegal war in Ukraine, in line with international law. The Prime Minister made that clear in the London declaration he signed with President Zelensky during his recent visit to the UK and in the G7 leaders’ statement on 24 February. We have been 100% clear: Putin must pay. We are working in the FCDO, in consultation with other Whitehall Departments and our G7 partners, to review all lawful options to make frozen Russian assets available for rebuilding Ukraine.
Sir Chris Bryant
We have a motion before us on the Order Paper, and I hope that the Government will not oppose it and that we will not have a Division at the end of the debate. The Government will therefore be agreeing the following:
“That this House calls on the Government to lay before Parliament proposals for the seizure of Russian state assets with the purpose of using such assets to provide support for Ukraine”.
So it is a legitimate question to ask: when will the Government be introducing the proposals that they are calling on themselves to introduce?
Anne-Marie Trevelyan
I thank the hon. Gentleman for that. If I may, I will continue with my speech before I run out of time. I hope to give him some assurance on his question.
We are continuing to engage with think-tanks, lawyers and Members of the House, and those they are working with, to ensure that we test every available option in detail. I reiterate that I am genuinely grateful to all colleagues for their interventions and proposals to help us work on these challenges, and we are meeting them regularly.
I want to be clear that the Government believe that we should develop the power for frozen assets to be used to rebuild Ukraine, to ensure that we can achieve that practically and lawfully. Given that Ukraine is fighting for its future and the principles of the UN charter and international law, it would be an own goal for Ukraine’s allies to risk being seen to act inconsistently with domestic and international law in their approach to seizing Russian assets.
Mr Djanogly
Is there not also a concern that if we do not act with our allies to move ahead on this principle, and we all start doing our own deals on releasing assets, that would be very damaging for the wall of sanctions? Indeed, the Ukrainians have said that they would be very much against individual deals.
Anne-Marie Trevelyan
I thank my hon. Friend for setting out one of the important issues that we are making sure we work on as effectively as possible. We are working very closely with our allies on the handling of seized Russian assets, and we will continue to do so. Let us be clear: our international partners face the same challenge. No country has yet found a legally tested solution. The right hon. Member for Barking (Dame Margaret Hodge) highlighted that Canada is testing the first seizure proposals and we are watching closely. I reassure the House that as progress is made by individual international partners, we will be right alongside them in considering how the UK can find solutions here too. Of course, as has been set out by colleagues, many proposals need UN leadership, and we will keep on driving that coalition.
In the meantime, we have made it clear that, consistent with our legal systems, Russia will have no access to the assets we have frozen or immobilised until it ends, once and for all, its violation of Ukraine’s sovereignty and territorial integrity. Russia will not get a single euro, dollar or pound back until that is realised.
Colleagues have raised questions about the Economic Crime and Corporate Transparency Bill. It will sit alongside the National Security Bill, the Online Safety Bill and the forthcoming economic crime and fraud strategy. It will bear down on criminals who abuse our open economy by reforming Companies House to prevent abuses of limited partnerships; there will also be reforms to target more effectively information sharing to tackle money laundering. The right hon. Member for Barking is right about the effectiveness of section 11 of the Sanctions and Anti-Money Laundering Act 2018, and it is used regularly.
I know that right hon. and hon. Members will be disappointed that I cannot speak more fully about sanctions enforcement and OFSI, as these are matters for His Majesty’s Treasury, but I know they will continue to raise their concerns directly and I have heard them today.
Stephen Doughty
I have to press the Minister on this point. Will she and the Treasury together publish a list of the people who have been granted licences and exemptions under the sanctions regime, how many enforcement actions have been taken, and what those actions have delivered in terms of monetary value?
Anne-Marie Trevelyan
I will take note of that request and make sure that Treasury officials get back to the hon. Gentleman.
I draw the House’s attention to the economic deterrence initiative, which was set out yesterday in the integrated review refresh. Funded with £50 million over two years, it will improve our sanctions implementation and enforcement. That will ensure that we can maximise the impact of all our sanctions, including by cracking down on sanctions evasion.
My right hon. Friend the Member for Maldon (Sir John Whittingdale) highlighted the oil price cap, which was brought in at the start of the year at $60. We know it is already having an effect, but the Price Cap Coalition is committed to reviewing shortly whether it is both diminishing Russian revenues and supporting energy market stability as effectively as it can.
The package of sanctions we have co-ordinated with our allies has inflicted a severe cost on Putin for his aggressive ambition and serves as a warning to all would-be aggressors. During President Zelensky’s recent visit to the UK, he and the Prime Minister made it clear that Ukraine and the UK remain the closest of friends. They committed to uphold Ukraine’s sovereignty and territorial integrity, to defeat Russia’s illegal and unprovoked invasion, and to pursue all lawful routes to ensure that Russian assets are made available to support Ukraine’s reconstruction, and that is what we will do.