The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)
I beg to move,
That the Sanctions (EU Exit) (Miscellaneous Amendments and Revocations) Regulations 2024 (SI, 2024, No. 643), dated 14 May, a copy of which was laid before this House on 15 May, be approved.
In recent years, the UK has transformed its use of sanctions. We have deployed sanctions in innovative and impactful ways, including in our response to Russia’s invasion of Ukraine. We have taken a rigorous approach, carefully targeted to deter and disrupt malign behaviour, and to demonstrate our defence of international norms. This statutory instrument covers several measures that will strengthen our sanctions regimes across the board and allow us to continue the work already being implemented across Government. I will run through each measure in turn.
First, in October 2023 the Government added a new type of sanction, the director disqualification sanctions, to the Sanctions and Anti-Money Laundering Act 2018. This instrument uses that power to amend the UK’s autonomous sanctions regimes, which will mean that the Government can apply it to individuals designated under these regimes. It will be an offence for a designated person subject to this new measure to act as a director of a company or to take part in the management, formation or promotion of a company. This will further prevent those sanctioned from deriving benefit from the UK economy. It is an important addition to the UK sanctions toolkit. This instrument provides Ministers with the flexibility to apply the new measure on a case-by-case basis. The Government will ensure that the measure is targeted and operates alongside the UK’s full suite of sanction powers.
This instrument also enables the Government to issue licences to persons to allow them to undertake activity that is otherwise prohibited. The Foreign, Commonwealth and Development Office has been working closely with the Department for Business and Trade, Companies House and the Insolvency Service on the implementation of this measure.
The SI will also clarify the sanctions enforcement remit of His Majesty’s Revenue and Customs. HMRC has well-established responsibilities for enforcing trade sanctions in its capacity as the UK customs authority. In recent years, however, the scope of trade sanctions has evolved beyond import and export prohibitions, to include matters that are outside HMRC’s customs remit such as sanctions on stand-alone services.
Last December, the Government announced the decision to establish the Office of Trade Sanctions Implementation, within the Department for Business and Trade, in order to enforce these new types of measures under the civil law. Once it starts operating, OTSI will also be able to refer serious offences to HMRC for criminal enforcement consideration. HMRC will continue to have both civil and criminal enforcement responsibility for sanctions within its customs remit. This legislation is needed to clarify the sanctions measures for which HMRC is solely responsible for enforcing and those which it will investigate on referral from OTSI or another civil enforcement organisation.
Alicia Kearns (Rutland and Melton) (Con)
The sanctioning of the shadow fleet is an issue of great importance to the Foreign Affairs Committee, so I thank the Government for introducing this really important legislation. May I also thank you, Mr Speaker, for your support of the Foreign Affairs Committee during this Parliament, and put on the record my thanks to an incredible Committee that it has been an incredible honour to chair? I thank in particular my Clerk, Chris Shaw, who is truly incredible, as well as the rest of the Committee, who have been wonderful. On behalf of the Committee, I also thank the Government for all they have done on Ukraine, showing the leadership that means that Ukraine is still standing and fighting.
Will my right hon. Friend the Minister confirm that this is not just about tackling money and profits going into the Russian coffers, but about violations of maritime law, and that is why today’s sanctions are so very important and why the Government are showing yet again that we will always stand by Ukraine?
Anne-Marie Trevelyan
I thank my hon. Friend for her intervention and, indeed, for her very kind words towards those who do a huge amount of work behind the scenes to enable us to bring forward a rolling level of sanctions legislation, which has continued to degrade Putin’s ability to fund his war. We believe that sanctions across the piece have taken some £400 billion out of his capabilities. It is a continuum, and today’s legislation continues that. She is absolutely right. The sanctions will continue to be tools that help us in many ways to keep ahead of those who wish us harm and who wish to support Putin in his illegal war in Ukraine, and to continue to hunt them down and to restrict their capacity.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister and I have worked on various things over the years. Those of us in all parties who are passionate about sanctions are still extremely worried about certain significant people in this country. A recent article in The Times suggested that a hereditary peer in the House of Lords is a main channel of Russian money helping certain political factions not only in this country but in the United States. Is it not about time that we did something about the upper House, which seems to have a small group of pro-Putin Members?
Anne-Marie Trevelyan
The hon. Gentleman has, as he says, been an incredible champion and supporter of all the work we have been doing cross-party to keep ahead of the sanctions. I know it is frustrating, but as I always say, people should pass evidence of any sort about individuals they consider are supportive of or enabling Putin, his regime or any military activity to the teams in the FCDO, which look day in, day out at being able to bring forward a package of evidence that would withstand judicial review. We stand ready. I will never comment on what we are taking in and what might come next, but the teams are working flat out to look at the evidence wherever they can. That is a continuum. I say that not only to Members of this House but more widely to those out on the frontline or working with businesses; where they see areas in which they believe that is happening, they should bring the information to us.
Mr Sheerman
Will the Minister accept some evidence I have about the Earl of Oxford and Asquith that I think should be urgently considered by all of us careful and worried about sanctions?
Anne-Marie Trevelyan
If the hon. Gentleman would like to write to me later today, I will make sure that the team looks at the information as soon as possible.
Mr Speaker
Order. I know it is the final day for the hon. Member for Huddersfield (Mr Sheerman), but we still have rules in this House about being critical of Members of another House. Could he still use that caution, even on his last day in the House?
Anne-Marie Trevelyan
Thank you, Mr Speaker.
This legislation is needed to clarify the sanction measures for which HMRC is solely responsible for enforcing on those it would investigate on referral from OTSI. It will therefore establish a consistent approach to the enforcement of trade sanctions. It will facilitate HMRC and OTSI working in close partnership so that they can robustly enforce all trade sanctions against Russia and other target countries using civil and criminal powers.
On the financial sanctions side, the statutory instrument also includes new obligations for persons designated under the Belarus regime to report any assets they own, hold or control in the UK or worldwide as a UK person to the relevant authorities. The measure is another step in improving the transparency of assets owned, held or controlled in the UK by designated persons and will strengthen the ability of HM Treasury’s Office of Financial Sanctions Implementation—OFSI—to implement and enforce UK financial sanctions.
Importantly, the measure will act as a dual verification by enabling the comparison of disclosures by designated persons against existing reporting requirements that bite on firms such as financial institutions. Under the new requirement, the Government will be able to penalise those who make deliberate attempts to conceal assets to escape the effects of sanctions. An equivalent reporting obligation was placed on designated persons under the Russia regime in December 2023. The extension of this requirement to Belarus ensures alignment between the Russia and Belarus regimes, which is particularly vital given the frequent overlap of the Belarus and Russia sanctions regimes and the co-operation between the two states in relation to Russia’s invasion of Ukraine.
We have also included several sanctions on Belarus on the export of so-called battlefield goods, which include goods such as electronic equipment, integrated circuits and firearms and aerospace technology. These new measures prohibit the import of Belarusian aluminium into the UK—both the metal itself and aluminium products. Aluminium products are a sector of strategic importance to Belarus and have been its top export to the UK. Although the UK nexus with the Belarusian economy is limited, the signalling impact of our sanctions on Belarus is, and will remain, important. We keep these sanctions under constant review and reserve the right to introduce further measures so that the Lukashenko regime continues to feel the consequences of its lack of respect for human rights and its support for Putin’s war.
Finally, we are also revoking the Burundi sanctions regime. That will remove an empty regime from the statute books. The decision in 2019 not to transpose into UK law designations under the original 2015 EU sanctions regime reflected the improved political situation in Burundi. We do not have the same level of concern about the widespread political violence in Burundi that led to the original decision to impose the regime, so we have made no designations under it. As we set out in the recent UK sanctions strategy, the Government keep their regimes under review and respond to changing circumstances. We are committed to lifting a regime out of a specific measure or revoking a designation when the original objective is no longer served by its continuance.
To conclude, sanctions continue to play an important part in the UK, which continues to build on its already impressive sanctions capability. In the years since the landmark Sanctions and Anti-Money Laundering Act 2018, our approach to sanctions has evolved considerably to respond to the changes in the world. We will continue to work on sanctions to meet any new challenges. I commend the regulations to the House.