Republic of Belarus (Sanctions) (EU Exit) (Amendment) Regulations 2023
(1 year, 5 months ago)
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Lord Ahmad of Wimbledon
That the Grand Committee do consider the Republic of Belarus (Sanctions) (EU Exit) (Amendment) Regulations 2023.
Relevant document: 44th Report from the Secondary Legislation Scrutiny Committee (instrument not yet reported by the Joint Committee on Statutory Instruments)
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, this statutory instrument was laid on 8 June under the powers provided by the Sanctions and Anti-Money Laundering Act 2018. It amends the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 by broadening the designation criteria and introducing new financial and trade measures. These enhanced sanctions reflect, and are designed to disrupt, the ability of Belarus to support Mr Putin’s war and are designed to deter it from engaging in actions that further destabilise Ukraine.
The Government introduced their previous package of sanctions against the Belarusian regime almost one year ago. It included a range of financial and trade measures, and our trade with Belarus has subsequently dwindled. However, Belarus has continued to support the Russian invasion of Ukraine. It allowed Russian forces to use its territory as the launch pad for the illegal invasion of Ukraine. It trained Russian soldiers, supplied materiel and continues to provide logistical support to Russia.
Mr Lukashenko’s cronies continue to spread Mr Putin’s poisonous propaganda and disinformation, and there is evidence to suggest that Belarus could be providing a route to circumvent the unprecedented suite of targeted sanctions that we and our allies have imposed on Russia. I know that that has been a cause of specific concern for all Members of your Lordships’ House. We condemn the actions taken by Mr Lukashenko and his regime in support of Mr Putin’s and Russia’s illegal war on Ukraine. In response, we are absolutely determined to scale up our sanctions package against Belarus. The measures in this latest package seek to block circumvention routes and broaden our designation criteria, while adding new powers to constrain propagandists.
I will take each aspect of the package in turn. The instrument contains new trade sanctions, including a ban on UK exports to Belarus of banknotes and on a wide a range of machinery, as well as chemicals that could be used in the production of chemical and biological weapons. It will prohibit the export of precursor chemicals that could be used in the manufacture of chemical and biological weapons. This instrument also bans the import of Belarusian cement, wood, rubber and gold. This will help to further clamp down on revenue streams for the regime.
These new trade sanctions on cement, rubber, wood and machinery will align us with previous EU sanctions and, in the case of precursor chemicals and gold, they go further. The noble Lord, Lord Purvis, has often focused on this issue, so I thought I would share that with noble Lords. At this juncture, as we have said before, while we are moving in a co-ordinated fashion, there may be occasions when we are ahead of our allies or our allies are ahead of us, but the alignment continues to work well.
The measures also include further financial sanctions to prevent Belarus using money markets or transferable securities instruments. Again, noble Lords have raised this issue regularly. Belarus has sought to use such instruments to raise revenue. Thus, by taking these measures, we will be constraining its ability to support Mr Putin’s invasion.
Another key aspect of this amendment is the broader range of designation criteria, which is extremely important. It will allow us to sanction a wider range of the regimes’ facilitators, including government aides, advisers and Ministers. Where appropriate, it will also enable us to target family members of individuals already designated to prevent them benefiting from asset transfers designed to circumnavigate the bite, effect and impact of UK asset freezes.
This instrument also provides the UK Government with powers to prevent designated Belarusian media organisations spreading propaganda in the UK, including over the internet. These measures provide powers to restrict the reach of Russian and Belarusian disinformation, and go some way further to reduce the impact of the disgusting practice of posting forced confessions online.
These strategic and targeted measures will sit alongside the wide-ranging sanctions that we have already imposed on more than 100 individuals and entities for their role in the violent oppression of Belarusian civil society, opposition groups and the media. I know that this point has been raised by the noble Lord, Lord Collins, among others. We are targeting individuals including Mr Lukashenko and key members of his regime.
To conclude, as noble Lords recognise, the instrument we are debating today is part of our broader efforts to target Mr Lukashenko’s Belarusian regime for its continued support of Russia’s illegal actions in Ukraine. It is important to be clear that the UK Government have no issue with the people of Belarus. They deserve leadership that does not oppress them or ignore the interest of the Belarusian people in preference for or in support of President Putin.
We reserve the right to introduce further measures in co-ordination with our international partners. Again, I am grateful for the strong support that we have received from noble Lords, particularly the Front Benches. Should Mr Lukashenko’s regime continue to prop up Mr Putin’s illegal war in Ukraine, we will seek to act further. I beg to move.
Lord Purvis of Tweed (LD)
My Lords, I am grateful to the Minister for introducing these regulations. He knows of the Liberal Democrat support for these sanctions, which has been consistent and wholehearted. He is absolutely right that the direct focus of these measures should be the regime supporting this illegal conflict, not the people of Belarus.
I am grateful for officials’ work on the very comprehensive impact assessment. Perhaps other ministries could learn from the thoroughness with which the impact assessment was put together, so I commend the officials for that. It is incredibly important that impact assessments are there and are clear, because these measures mean nothing unless they can be enforced. What level of enforcement is now anticipated?
I read the Hansard of the House of Commons’ coverage on this measure and the new financial sanctions. A question was put to the Minister’s counterpart on the resources, capacity and ability of the Office of Financial Sanctions Implementation to enforce these measures properly. If I may say so, this issue has been consistently raised by the noble Lord, Lord Collins, in previous debates on these issues. The Minister there said that the Government’s view was that £20 million had been used as penalties for Russian sanctions but there has been little information. I would be grateful if the Minister here could clarify what the impact has been already. The benefit of co-ordination, and the area of focus, has to be on ensuring that UK-based law and consultancy firms are not being used to circumvent these measures.
I am grateful to the Minister for referencing the issue that I have raised on a number of occasions: working with our allies on gold. I will return to that point in a moment.
These measures now have a heightened sense of importance, given the very recent developments. If it is the case that the Wagner Group is now effectively based in Belarus but will still operate via Moscow in many of the countries, as we are seeing, this means that these measures will be even more important.
Before I close, I want to ask the Minister about discussions with our allies. He has heard me referencing the UAE before when it comes to financial relationships. My understanding is that the Wagner operations are now likely to be based out of Minsk, although there is uncertainty about the location of Mr Prigozhin. Let us take that as a fairly reasonable assumption that the operations will still be in place.
The Minister knows about my interest in Sudan. My understanding is that the Kush project, a gold project in Sudan that has been part of the source of the Rapid Support Forces there, has been a joint project between Russians and Emiratis where the Wagner Group has been operating under contract. That has provided—the concern is that it continues to do so—a revenue stream for one of the warring parties in Sudan. My understanding is that the Kush project and investments are, in effect, still being banked through the UAE.
When it comes to restrictions on transferable securities or money market instruments, I would be grateful if the Minister could be clear that this is on the radar of the FCDO in our discussions with our friends in the UAE. These measures will not be effective at directing targeted measures towards the Belarus officials—and now, the Wagner Group—if they are still able to operate with impunity, in effect, in crisis areas such as Sudan. I know that the Minister will not be able to respond to me in detail today so I would be happy for him to write to me with specific regard to the Kush for Exploration and Production Company.
The Minister knows my view on the proscription of Wagner. I will not ask him about that because I know what he will say in response but, now that Belarus is at the eye of the internal issues in Russia and given the impact in Africa, these points will be of heightened importance. I would be grateful if the Minister could respond to them. In the generality, breadth and widening of the scope, he knows of our support.
Lord Collins of Highbury (Lab)
My Lords, I, too, welcome the Minister’s introduction to these regulations. Like the noble Lord, Lord Purvis, I reiterate our continued support for the Government’s efforts to bring this war to an end. I repeat the sentiments that we expressed during the debate on the Statements made on Monday. I certainly welcome the Minister’s response on alignment and co-ordination; these are vital elements to the success of any sanctions regime. We cannot act alone.
I make just one small point: the SLSC drew attention to these regulations because it was
“surprised to learn that—16 months into the conflict—the FCDO is only now prohibiting the export of precursor materials for chemical and biological weapons to a conduit country known to”
supply these things to the Putin regime. I would appreciate some sort of response on that particular point.
The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)
My Lords, a Division has been called. I understand that there are to be two Divisions in quick succession, so I propose that we reconvene 10 minutes after the second Division starts, or sooner if we are all back.
Lord Collins of Highbury (Lab)
My Lords, I was mid-flow. I was making the point about the need for strong enforcement and investigation, primarily to act as a deterrent to make sanctions more effective. My honourable friend Stephen Doughty raised this issue in the other place. He said that, according to records on the OFSI’s website, no financial penalties appear to have been issued since September 2022. In response, the Minister, Anne-Marie Trevelyan, said that she would write about the effective implementation. As the noble Lord, Lord Purvis, mentioned, she said that the
“OFSI has issued £20 million in fines so far”.—[Official Report, Commons, Third Delegated Legislation Committee, 26/6/23; col. 6.]
I am not quite sure what period she meant. She indicated that she would write to my honourable friend but I would like the Minister to respond with the details not only in his response tonight but on an ongoing basis. Parliamentarians should not only be informed but use the information about enforcement in a much more public way to ensure that it is seen that we take the sanctions seriously and that we are pursuing and implementing them, thereby ensuring that the information acts as a proper deterrent. I hope that we can address this issue. That concludes my comments; I look forward to the Minister’s response.
Lord Ahmad of Wimbledon (Con)
My Lords, I am grateful to the noble Lords, Lord Collins and Lord Purvis. I note that the noble Lord, Lord Purvis, informed me and the noble Lord, Lord Collins, that he is unable to join us as he is speaking on the next group of amendments in the Chamber. That said, I thank both noble Lords once again for their strong support for the Government’s position. I am sure that they would both acknowledge that we are constructively taking on the suggestions and practical proposals put forward in these debates to further strengthen what we are doing.
With the noble Lord’s indulgence, I will mention briefly the situation regarding Yevgeny Prigozhin, as his whereabouts and so on were raised. I am sure that noble Lords have followed the news that Mr Lukashenko has confirmed that the head of the Wagner Group has arrived in Belarus. Mr Lukashenko has also echoed comments made by Mr Putin that Wagner mercenaries should come to Belarus under security guarantees offered by him and Mr Putin. We have seen no indications that any Wagner mercenaries have so far relocated to Belarus but the prospect of their doing so cannot be ruled out. We are working closely with key NATO allies. As President Duda of Poland and the NATO Secretary-General, Jens Stoltenberg, have stated, the presence of Wagner mercenaries in Belarus is an extremely worrying development. Of course, I will keep noble Lords informed about that, but I thought it appropriate to mention it right from the start.
I will seek to answer most, if not all, of the questions raised. I take on board the final point raised by the noble Lord, Lord Collins, about transparency and ensuring that not just we in the Chamber but the public are assured that the actions we are taking are resulting in direct sanctions against those who seek either to act against the sanctions or to circumvent them. This instrument widens the scope of what we will be able to do going forward. Specific provisions in the sanctions proposal that we put forward will allow us to take further action. The broadening element of the sanctions will certainly allow us to act more quickly and with greater agility. As I said in my opening remarks, it will also allow us to act to take on board not only the principal individuals but those who may be associated, either by family or business, with those in Russia and Belarus who are subject to these sanctions.
To take some of the questions, the noble Lord, Lord Purvis, asked about resourcing and staffing. The Office of Financial Sanctions Implementation has doubled in size this financial year and continues to grow to meet the challenges of the sanctions introduced. The recruitment of new permanent staff continues following the Chancellor’s announcement in March about doubling that department’s size. In its annual report, released on 10 November 2022, OFSI said that it is scaling up to over 100 full-time employees by the end of 2022, accelerating and enhancing the ambitious transformation programme. If there are more up-to-date figures during the course of this year, we will, of course, update.
The noble Lord, Lord Collins, rightly asked about the export ban on goods and technology related to chemical and biological weapons. Of course, we continue to review all our sanctions, which are designed to evolve over time to maintain effectiveness and apply increasing pressure. The export of goods and technology related to chemical and biological weapons that is now in place is designed to replicate measures that we have already taken against Russia. This will ensure that we prevent the possibility of such routes being circumvented via Belarus in the event that Russia tries to exploit any potential avenues. I take the noble Lord’s point about the importance of acting with greater agility and dynamism. That is why I go back to the broad nature of the sanctions provisions in terms of the structure that we have proposed.
On the issue of circumvention, the noble Lord, Lord Purvis, asked about a particular entity. I can share with noble Lords that we are engaging with third countries to close down routes that Belarus—and Russia, for that matter—could potentially use to circumvent our sanctions. The noble Lord may be aware that I was in the UAE recently. Of course, Russia’s illegal invasion of Ukraine and the issue of sanctions were discussed. Noble Lords may be aware that, on 31 March, the Central Bank of the United Arab Emirates announced that it would cancel MTS Bank’s Abu Dhabi licence, taking into account the sanction risk associated with the bank after its designation by the UK and the US. These latest measures on Belarus are also designed to close down potential avenues for circumvention. I mention that because it is a practical example of how countries are taking action more broadly.
The issue of Wagner in Africa was also raised. We are aware of the US Treasury’s announcement on Wagner Group sanctions on 27 June. We have repeatedly highlighted Wagner’s destabilising role in Mali and other parts of Africa. However, we need to look at this and scrutinise it closely; it is an evolving situation, and the events over the weekend demonstrably showed how quickly things can change on the ground. We are analysing the impact of the events of last weekend.
The noble Lord, Lord Collins, raised the issue of media freedom, freedom of expression and unintended consequences. Of course, the UK is committed to international law, upholding freedom of speech and open, transparent and independent media. We refuse to use information in the same callous way as those in Russia and Belarus. We shall continue to hold ourselves to the highest standards, and we have demonstrated this leadership. I take on board the noble Lord’s point about ensuring that there are no unintended consequences but, as we keep these sanctions under review, we will ensure that in any such cases, if they are brought to our attention, any unintended consequences of these sanctions are put right.
There was a broader issue of how we respond to those who perhaps feel that the sanctions provide limited assistance on the humanitarian front and on food security. We continue to make the point that there are humanitarian provisions in all the sanctions, including on the issues of food security. To be clear, and for the record, the challenges that the UN-designed Black Sea grain initiative faces and the limitations that we see are not down to the sanctions. It is Russia that continues to limit the number of vessels that are taken out. Recently, when I was in Turkey, that was a key point of our focus and our exchange with key colleagues.
The noble Lord, Lord Collins, raised the issue of human rights and international law, which I have covered. The disinformation issue will be ever evolving, and we need to remain vigilant to how information is used, or how disinformation is utilised by those in Belarus and Russia.
The noble Lord, Lord Collins, also raised potash. This SI has no impact on potash production, but the import of Belarusian potash has been prohibited since August 2021. That is not the cause of the increased cost of food since Mr Putin’s invasion. I have already covered the points that the noble Lord raised on chemical weapons.
We are always looking at how we can strengthen the resourcing and effectiveness of our enforcement. On 13 March, my right honourable friend the Prime Minister announced a new economic deterrence initiative to boost our diplomatic and economic tools to respond to hostile acts by current and future aggressors. With funding of up to £50 million over two years, the EDI will improve sanctions implementation, as well as transparency and enforcement. The noble Lord, Lord Collins, raised that important point.
To conclude, I am again thankful to noble Lords for their participation, but I am particularly grateful to the noble Lords, Lord Collins and Lord Purvis, for their strong support and that of their respective parties for the Government’s actions. That yet again sends a united message, in this instance to Belarus and to Mr Lukashenko directly, that we will act together and in unity.
It is firmly in the interests of the UK and our allies to continue supporting Ukraine in the face of Russia’s assault and to impose a real cost on Mr Putin and his supporters, including other countries, for his flagrant attack on the international rules-based order. This enhanced package of sanctions will restrict Mr Lukashenko’s ability to support Mr Putin’s war and any efforts to circumvent the unprecedented package of international sanctions already imposed on Russia. We are grateful for the solidarity across Parliament for the actions that we have taken in response to the invasion to date. I assure the Committee that we will continue to work co-operatively and to update the House accordingly.